Changes to STP reporting from 1 July 2021

There are changes to Single Touch Payroll (STP) reporting for small employers with closely held payees and to quarterly reporting for micro employers from 1 July 2021.

A closely held (related) payee: is someone who is directly related to the business, company or trust that pays them, such as:

  • family members of a family business
  • directors or shareholders of a company
  • beneficiaries of a trust.

From 1 July 2021, employers must report any closely held payees through STP. You can choose to report these payees each pay day, monthly or quarterly.

Ways to report your closely held payees

From 1 July 2021, you can report payments to closely held payees through STP in any of the following ways:

  • Report actual payments on or before the date of payment – whenever you make a payment to a closely held payee, report the information on or before each pay event.
  • Report actual payments quarterly – report your actual payments to closely held payees quarterly. Each quarter, when your activity statement is due, report all payments made in that quarter.
  • Report a reasonable estimate quarterly – report amounts equal to or greater than a percentage of gross payments and tax withheld from the previous year, across each quarter.

A micro employer: is someone with one to four employees.

From 1 July 2021, STP quarterly reporting concessions for micro employers will only be available to those who meet certain eligibility requirements. These now include the need for exceptional circumstances to exist.

To be eligible for this quarterly reporting concession, you must meet all of the following:

  • be a micro employer on the day you apply (based on employee headcount)
  • lodge your activity statements electronically through a registered tax or BAS agent
  • have a non-computerised payroll. This could include running your payroll manually and keeping records on a spreadsheet or paper
  • all amounts owing to the ATO are either not yet due or subject to a payment plan
  • all lodgment obligations are either not yet due or subject to a deferral
  • for applications for a period commencing after 1 July 2021, you must also meet the guidelines for exceptional circumstances.

Exceptional circumstances

The following circumstances may be considered exceptional when considering an application for the quarterly reporting concession from 1 July 2021:

  • Seasonal or intermittent workers – for micro employers who generally have either no or between one and four employees for most of the year and then increase their workforce for less than three months of a financial year.
  • No or unreliable internet connection – ATO would consider the following:
    • an inability to connect to the internet
    • a connection that consistently requires multiple attempts
    • consistent dropouts or disconnections
    • exceedingly slow data transfer.

Note: employers with no or intermittent internet connection may also apply for an:

  • exemption via your registered tax or BAS agent
  • operational deferral – allowing up to an additional three days to lodge.

Employers can apply for this concession through the online deferral tool from 1 July 2021.

Employers who haven't started reporting through STP and don't have a deferral or exemption need to start reporting now.

If you would like any further information or assistance in regards to Single Touch Payroll, please feel free to contact us on 1300 885 761.

ATO on the hunt for unreported TPAR businesses

What is TPAR?

If you are running a business providing building construction services, cleaning services or courier services, you will need to lodge a Taxable payments annual report (TPAR) by 28 August each year. Penalties may apply for not lodging your annual report by the due date.

The TPAR contains information about payments to contractors that businesses in these industries must report to the ATO.

With the previous 28 August deadline now well overdue, the ATO has confirmed that more than 60,000 businesses have yet to lodge their TPAR, with failure-to-lodge penalties looming.

ATO assistant commissioner Peter Holt has urged business owners to lodge immediately, noting that the taxable payments reporting system (TPRS) aims to create a level playing field for contractors.

You will need to lodge TPAR if you:

  • are a business in the building and construction industry and have made payments to contractors for building and constructions services, or
  • provide cleaning services and made payments to contractors for cleaning services, or
  • provide courier services and made payments to contractors for courier services, or
  • provide road freight services and made payments to contractors for road freight services, or
  • provide information technology (IT) services and made payments to contractors for IT services, or
  • provide security, investigation or surveillance services and made payments to contractors for those services, or
  • provide mixed services (i.e. one or more of the services listed above).

Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders, companies, partnerships or trusts.

The detail that you need to report about each contractor can be found on the invoice you should have received from them, and includes:

  • Australian business number (ABN), if known,
  • Name and Address and
  • The gross amount you paid to them for the financial year (including any GST).

The Taxable payments report can be lodged online or by completing a paper form.  If you are unable to lodge online, you can order the TPAR paper form from the ATO publications ordering service.

If you would like any further information or assistance with lodging your taxable payments annual report please contact us on 1300 885 761.

Primary producers registration concessions

If you are a primary producer, you can apply for a concession on vehicle registrations.

Registration concessions

  • Light vehicles (up to 4.5 tonnes GVM)
    • Cars and station wagons – private rate of vehicle tax
    • Trucks and trailers – 55% business rate of vehicle tax
    • Tractors – 55% of business rate of vehicle tax
  • Heavy vehicles (over 4.5 tonnes GVM)
    • Applicable registration charge or vehicle tax, whichever is lower.

Primary producer vehicle requirements

The vehicle must be a motor vehicle, owned by the primary producer, incorporated body or rural co-operative.

While on road and road-related areas, the vehicle must be principally used for:

  • carting primary products that the primary producer has produced
  • carting goods of any kind for use in the primary producer's business or in the primary producer's household
  • purposes connected with the clearing of land that the primary producer proposes to use for primary production.

Primary producer vehicles are not:

  • used for let (leased)
  • used for hire (rented)
  • used to receive a fee or reward (including a fee or reward from another primary producer).

How to apply

To apply for a concession you must provide a Declaration of Eligibility for a Registration Concession when you:

You must also provide a declaration signed by a registered tax agent or accountant, stating the applicant is a primary producer as defined by the Motor Vehicles Taxation Act 1988.  This is to prove your eligibility for the concession. If you cannot provide the document, the vehicle cannot be registered for the primary producer concession.

Your registration may be suspended or cancelled if you do not supply the above document when requested.

You must also notify Roads and Maritime Services within 14 days if you no longer qualify for a primary producer concession. You should visit a service centre to do this.

For more information about this concession, visit the Roads and Maritime Services website (rms.nsw.gov.au), or contact us on 1300 885 761.

Claiming motor vehicle expenses

Make sure you use the correct calculation method. Different rules apply depending on your business structure and the type of vehicle you are claiming for:

Types of vehicles:

Cars (for income tax purposes) are defined as motor vehicles (including four-wheel drives) designed to carry both:

  • a load less than one tonne
  • fewer than nine passengers.

Other vehicles include:

  • motorcycles
  • vehicles designed to carry either 
    • one tonne or more (such as a utility truck or panel van)
    • nine passengers or more (such as a minivan).

Company or trust

You must use the actual costs method to work out motor vehicle expenses, regardless of the type of motor vehicle. This applies to both cars and other vehicles.

Sole trader or partnership

There are two ways you can claim the business usage of your car. For other vehicles, you must use the actual costs method.  These are:

  1. The cents per kilometre method, or
  2. The Logbook method.

Cents per kilometre method

Under this method you can claim a maximum of 5,000 business kilometres per vehicle per year, provided the distance was actually travelled. However you cannot make a separate claim for depreciation or any operating costs.

For 2019-20 years, the cents per kilometre method is set at 68 cents per kilometre, however it has been increased to 72 cents per kilometre for 2020-21.

Logbook method

Under this method you need to have retained documentary evidence of your running costs, and to keep a logbook for a minimum 12 week period.  Each logbook must contain the following information:

  • The beginning and end dates of the logbook period, plus the car's odometer readings at these dates
  • The total number of kilometres the car travelled during the logbook period
  • The odometer readings at the start and end of each income year you use this method
  • The business-use percentage for the logbook period
  • The make, model, engine capacity and registration number of the car
  • For each business journey, record the:-
    • Start and end dates and odometer readings for the journey
    • Kilometres travelled
    • Reason for the journey

The allowable claim is calculated as follows:

  1. Divide the distance travelled for business by the total distance travelled;
  2. Multiply by 100 to provide the business use percentage;
  3. Determine your total expenses, including depreciation, for the income year. You must retain documentary evidence of your running costs;
  4. Multiply the total expenses by your percentage to find the total amount you can claim.

When you commence using the logbook method, it is important to keep a logbook during the income tax year for at least 12 continuous weeks, and that 12 weeks period needs to be representative of your travel throughout the year. The business use percentage calculated using the logbook method can be used for up to five years, or until your business use varies by more than 10%, whichever comes first. More information regarding the log book method can be found here.

Dawson & Partners App

Our Dawson & Partners App provides an automatic mileage tracking tool that can assist you with the logbook method. This tool will record your mileage at the press of a button. Just simply tap on the start button and the App starts tracking your journey. Once you have finished your journey, hit stop then give it a name. All data is now automatically synced in the cloud, so you can record your journeys and track/submit your expenses with ease.

If you haven't downloaded our free App, please head to the Apple or Android store on your device and search for MyAccountants and enter the code DAWSON to start benefiting from this technology today.

Alternatively, you can download the App using the links below:

Click here to download on Android

Click here to download on Apple

Please contact us on 1300 885 761 for more information regarding motor vehicle expense claims.

Fuel tax credits rates indexation March 2021 BAS

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

  • Be registered for GST
  • Use the fuel for an eligible activity including but not limited to:
    • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
    • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 1 February 2021 to 30 June 2021 are as follows:

  • Increase from 16.5 to 16.9 cents per litre for liquid fuels used in a heavy vehicle on public roads;
  • Increase from 42.3 to 42.7 cents per litre for liquid fuels in all other business uses;
  • Increase from 18.16 to 18.305 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
  • Increase from 13.8 to 13.9 cents per litre for liquefied petroleum gas (LPG) ; and
  • Increase from 29.0 to 29.3 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for March quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter

Period

Payment due date

1

1 July – 30 September

28 October

2

1 October – 31 December

28 January

3

1 January – 31 March

28 April

4

1 April – 30 June

28 July

 

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

 

Next date for payment:

Period: 1 October 2020 – 31 December 2020

Payment due date: 28 January 2021

 

 

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

Update - ATO Scam Alerts

The Australian Taxation Office (ATO) is urging all Australians to keep their personal information secure and to report any suspicious activity immediately.

Latest scam alerts:-

Email scam: scammers are sending fake ATO emails about JobKeeper and backing business investment claims. The fake emails say ATO is investigating your claims. They ask you to provide valuable personal information, including copies of your driver's licence and Medicare card. Do not provide the information requested, and delete the email straight away.

Text message scam: scammers are sending scam text messages asking you to verify your myGov details with a link to log on to your myGov account. Don't click any links and don't provide the information requested.

Phone scam: scammers are contacting people by using technology to make it look like the calls originate from a legitimate ATO phone number and leaving voicemail messages threatening the recipients with arrest due to an unknown tax debt or suspected tax evasion. Do not return the call.

Tips on How to spot an ATO scam

The ATO will not:

  • be abusive or offensive to you
  • threaten you with immediate arrest
  • ask you to transfer money into an account with a BSB that is not held with the Reserve bank of Australia
  • request payment via unusual methods such as iTunes gift cards, bitcoin or other prepaid cards
  • stay on the phone with you while you go to the bank, post office or shops to make a payment
  • request personal security information such as your TFN or your bank details via email or SMS or social media sites
  • ask you for money up front in order to receive a refund or other payment
  • refuse to allow you to speak with a trusted advisor or your regular tax agent
  • present a phone number on caller ID
  • direct you to download files from the internet.

The ATO will:

  • provide you with a range of options for paying debts, which are all set out on the ATO website at ato.gov.au/howtopay
  • contact you by phone:
    • if you are in doubt about the authenticity of a call claiming to be from the ATO, you can call the ATO on 1800 008 540 to verify.  You will generally be aware of any debt before it is due for payment, but you can check with us first if required.
  • send emails and SMS asking you to take specific action such as:
    • provide additional information required to process a BAS or tax return lodged
    • provide additional information regarding an application that has been made
    • verify changes to an account
  • send general notifications and reminders via SMS or email
  • send promotional and informational SMS and emails.

More detail regarding ATO scam alerts can be found here.

If you have any concerns regarding correspondence from the ATO please contact us on 1300 885 761 or contact the ATO directly on 1800 008 540.

Younger Australians will be offered new incentives to fill a growing jobs gap in the regions as part of a budget package that aims to boost farm production to $100 billion within a decade.

To support the agricultural sector and young Australians affected by the economic impact of the coronavirus pandemic, the Government temporarily introduced a new pathway for achieving independence for the purposes of Youth Allowance (student) and ABSTUDY. It will allow young people who choose to work on farms, faster access to Youth Allowance and ABSTUDY.

The new measures seek to encourage young people to take farming jobs when the industry cannot recruit enough foreign workers during the pandemic

Under the new criteria, a person can be considered independent if they meet both the following:

  • earn $15,000 through employment in an agricultural industry between 30 November 2020 to 31 December 2021
  • have combined parental income under the parental income threshold of $160,000 per year plus $10,000 for each additional child.

This change is subject to the passage of legislation.

For more information about this measure, visit the Department of Social Services website (dss.gov.au), or contact us on 1300 885 761.

2020/21 Federal Budget Highlights

The Federal Treasurer, Josh Frydenberg, handed down the 2020/21 Federal Budget on Tuesday 6 October 2020.

The key changes that may impact you are set out below:

1.       Personal income tax

The changes that were due to apply from 1 July 2022 will now apply from 1 July 2020, comprising:

  • increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000;
  • increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000;
  • increasing the maximum Low Income Tax Offset (LITO) from $445 to $700.

2.       Businesses

  • From 1 July 2020, eligible businesses with an aggregated annual turnover of at least $10 million and less than $50 million will be able to immediately deduct certain start-up expenses and certain prepaid expenditure;
  • From 1 April 2021, eligible businesses will be exempt from FBT on car parking and multiple work-related portable electronic devices, such as phones or laptops, provided to employees;
  • Uncapped immediate write-off for depreciable assets
    • Businesses with an aggregated annual turnover of less than $5 billion will be able to claim an immediate deduction for the full (uncapped) cost of an eligible depreciable asset, in the year the asset is first used or is installed ready for use:
      • The asset was acquired from 7:30pm AEDT on 6 October 2020.
      • The asset was first used or installed ready for use by 30 June 2022.
      • The asset is a new depreciable asset or is the cost of an improvement to an existing eligible asset, unless the business has annual turnover less than $50 million, in which case the asset can be second hand.
    • As is currently legislated, businesses with aggregated annual turnover between $50 million and $500 million can still deduct the cost of eligible second-hand assets costing less than $150,000 that are purchased from 2 April 2019 and first used or installed ready for use between 12 March 2020 and 31 December 2020 under the enhanced instant asset write-off. The Government has announced that it will extend the period by 6 months, until 30 June 2021.
    • Small businesses (with aggregated annual turnover of less than $10 million) can deduct the balance of their simplified depreciation pool at the end of the income year while full expensing applies (i.e., up to 30 June 2022).
  • Introduction of a JobMaker Hiring Credit for each additional employee hired aged 16 to 29 years old ($200/week) or 30 to 35 years old ($100/week).

3.       Superannuation

From 1 July 2021, your existing superannuation account will follow you to avoid the creation of a new account when you change employment.

Please feel free to contact us on 1300 885 761 if you have any questions or would like further information in regards to any of the above changes.

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter

Period

Payment due date

1

1 July – 30 September

28 October

2

1 October – 31 December

28 January

3

1 January – 31 March

28 April

4

1 April – 30 June

28 July

 

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

Next date for payment:

Period: 1 July 2020 – 30 September 2020

Payment due date: 28 October 2020

 

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.