Over 600,000 Australians who have invested in cryptocurrency will be under the spotlight from the ATO as it extends its data-matching program to 2023.
The ATO’s cryptocurrency data-matching program, , will now scrutinise cryptocurrency transactions and account information from designated service providers for a further three financial years to 2022–23.
The data obtained will identify the buyers and sellers of Crypto assets, with the Tax Office expecting records relating to 400,000 to 600,000 individuals to be obtained each year.
Data items collected by the ATO will include identification details including names, addresses and phone numbers as well as transaction details such as bank accounts, transaction dates and coin type.
According to the ATO, the data will uncover individuals who have failed to report a disposal of cryptocurrency and the appropriate capital gain or loss in their income tax return.
Data collected under the program will be retained for seven years to enable the ATO to cross-reference taxpayer records retrospectively.
Crypto interest has exploded over the past year, with popular currency bitcoin reaching highs of over $80,000 in mid-April. Even dogecoin, a cryptocurrency that started as an internet meme, saw its value spike by 12,000% in May.
The extension of the cryptocurrency data-matching program was registered by the ATO and comes as the ATO prepares to communicate with over 100,000 taxpayers, ahead of tax time to warn them about their cryptocurrency tax obligations.
While it appears that cryptocurrency operates in an anonymous digital world, it can be closely tracked where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer.
If you have bought or sold any Crypto currency and need help in recording or declaring to the ATO, please contact our office – (08) 8431 1644.
At Henson Lloyd Accountants we have an experienced Bookkeeping team dedicated to providing our clients with Monthly / Quarterly Bookkeeping: including but not limited to BAS Preparation, Accounts Payable, Accounts Receivable, Payroll, Data Entry, Bank Reconciliation, and Monthly / EOY reporting.
As the Financial Year comes to an end, there are a number of Payroll Finalisation actions which must be completed to comply with legislation – including RevenueSA, ATO and Return to Work SA (RTWSA).
Our team is experienced in all facets of End of Year reporting and can assist you with any or all of the following:
Single Touch Payroll (STP)
From 1 July 2021 there is no longer an exemption for small employers and closely held employee relationships. All payrolls will need to be reported to the ATO on a regular basis. From 1 January 2022 this is further expanded and more detailed information will be required to be reported.
Single Touch Payroll (STP), is an Australian Government initiative to reduce employers’ reporting burdens to other government agencies. It has also encouraged employers to utilise an STP enabled software for the preparation of their payroll to allow this reporting to occur efficiently.
If you are not already reporting payroll, we are happy to assist you to find the right solution for your business.
For those of you who are already reporting but are looking for assistance with payroll preparation and/or compliance, we are happy to help.
RTWSA (Workcover) and Payroll Tax
There are many factors to consider to ensure you pay the correct premium for your Workcover, and pay the correct amount of Payroll Tax. While Wages and Salaries for all employees including Superannuation and other benefits must be included when reporting, as with most things, there are exceptions. This can be tricky to navigate and we are here to assist you. To ensure you are reporting correctly and effectively covered, please contact us to discuss how we can assist.
PAYG Payment Summaries
Under pay as you go (PAYG) withholding, you must prepare PAYG Payment Summaries for each of your employees, workers and other payees. A PAYG Payment Summary, shows the payments you have made to them and the tax amounts that have been withheld from those payments during a financial year. These PAYG Payment Summaries are provided to your employees via their individual MyGov.
If we can be of assistance to you and your business at this busy and sometimes confusing time, please contact us at the office (08) 8431 1644 to discuss how we can help!
The Government intends for the scheduled increase of the super guarantee rate from 9.5% to 10% to still take place on 1 July, 2021.
From 1 July 2021, Australians will be able to put more into their super as the concessional and non-concessional contribution caps and the general transfer balance cap are set to increase due to indexation for the first time since July 2017.
Concessional contributions are contributions that are made into your super fund before tax. They are taxed at a rate of 15% in your super fund. The annual concessional contribution cap will increase from $25,000 to $27,500.
Non-concessional contributions are contributions that are made into your super fund after tax is paid. The annual non‑concessional contribution cap will also increase on 1 July 2021 from $100,000 to $110,000, or a lump sum of $330,000 every three years.
Also there has been an indexed increase in the transfer balance cap from $1,600,000 to $1,700,000. The transfer balance cap is a limit on how much superannuation can be transferred into a tax‑free retirement account.
The Government has announced an extension of the temporary 50% reduction in superannuation minimum drawdown rates for a further year to 30th June 2022.
Should you have any queries or require further information, please contact our office.
Whilst many of us defer lodging our tax, lodging a tax return sooner rather than later may reduce any ongoing quarterly tax instalment payments.
Business owners need to be aware of their specific tax obligations as well as any measures designed to minimise the amount of tax paid.
We encourage businesses to pay particular attention to the following key areas:
• Current Year Super Contributions: Super must be paid by 30 June 2021 to qualify for a tax deduction in the 2020–21 financial year. The superannuation fund must receive these contributions by 30 June. Some clearing houses can take more than a week to submit the payment to the super fund, so it would be advisable to ensure that superannuation is paid by mid-June where possible.
• Increase your Super Contributions: The ATO’s carry-forward rules allow you to make extra concessional contributions above the general concessional contributions cap ($25,000 in 2021) without having to pay extra tax.
Concessional contributions are any of the contributions paid into your super account that receive a concessional (or lower) tax rate. They include employer contributions (compulsory, additional or salary sacrifice payments) and personal contributions. The carry-forward arrangements involve accessing unused concessional cap amounts from previous years.
An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap. 2018/19 was the first financial year you could accrue unused cap amounts and these amounts can be used from 1 July 2019. Unused cap amounts can be carried forward for up to five years before they expire. To use your unused cap amounts, your total super balance at the prior 30 June must be below $500,000.
EXAMPLE: If your concessional contributions in the 2020 financial year totalled $20,000 your are allowed to contribute up to $30,000 of concessional contributions in the 2021 financial year.
• The instant asset write-off: Policies have been expanded again in the last two federal budgets as part of the government’s COVID-19 initiative to encourage business spending. There is now no limit to the amount a small business can write off under this concession. Businesses with aggregated turnover of less than $50 million receive a full write-off for new and second-hand assets.
While the May 2021 federal budget extended the concession all the way up until 30 June 2023, there is still a timing advantage where claims can be made in 2020–21.
• Loss carry-back: Another concession introduced in the October 2020 federal budget and extended for a further 12 months in the May 2021 Budget, this concession allows a company (i.e. not available to partnerships, trusts or individuals) to “carry back” tax losses incurred in any of the 2019–2020, 2020–21, 2021–22 and 2022–23 income years to an earlier year as far back as 2018–19.
A refund could be claimed on lodgement of tax returns from the 2020–2021 year onwards, representing the tax saving that would have arisen if the tax loss had been available to claim in the earlier year.
• Small business CGT concessions: Taxpayers operating a business may be eligible for these concessions on the sale of business assets by a company or on the sale of shares in a company carrying on a business.
The concessions may be available where aggregated turnover is less than $2 million or total net assets (excluding the family home and superannuation fund balances) less than $6 million, although the eligibility rules are quite strict, having been tightened significantly in recent years.
• Income deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June. Income from the payments won’t be taxed until the following financial year.
The above are very important considerations, if you have any questions or require assistance, please do not hesitate to contact us.
Treasurer Josh Frydenberg handed down his third Federal Budget on Tuesday night. It focused on initiatives designed to maintain and grow Australia’s post-pandemic economic recovery.
For more information, visit: NTAA Budget Handout
For more detailed information on all proposals, please refer to the Government’s official Budget website.
To simplify the process of claiming home office expenses amid the COVID-19 pandemic, the ATO introduced a shortcut method under which taxpayers can choose to claim a fixed rate of $0.80 per hour for all their running expenses for the 2020–21 financial year
However, clients claiming the home running expenses need to be cautioned that to utilise the shortcut method, both business owners and employees working from home need to keep a diligent log.
Taxpayers must maintain a logbook of the actual hours worked from home or a diary for a representative four-week period. This amount of use can then be applied over the entire year to determine the full claim.
According to the ATO, taxpayers are able to choose from three methods to calculate their additional running expenses for the allocated period. These include:
The ATO is also reminding people that the three golden rules for deductions still apply. Taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.
Taxpayers can claim a deduction for the additional expenses they incur under the fixed rate and actual cost methods. These include:
Thousands of taxpayers could now retrospectively receive JobKeeper and cash flow boost payments following the ATO’s acceptance of the Full Federal Court’s decision.
Could this apply to you? If you think it might, give us a call.
The ATO has now committed to automatically reviewing decisions where it denied businesses access to JobKeeper and the cash flow boost based on its erroneous interpretation of its discretion to grant further time for a business to hold an ABN or provide notice to the commissioner of assessable income or supplies.
The revelation comes after the Full Federal Court had ruled in March that the ATO’s use of the discretion was narrower than intended.
A sole trader has been granted access to JobKeeper after the Full Federal Court unanimously ruled that the ATO had erred in its decision not to grant the business more time to establish its eligibility.
The JobKeeper test case centered around sole trader Jeremy Apted and whether he met an eligibility requirement to hold an ABN on or before 12 March 2020.
Mr Apted, a specialist retail valuer, had held an ABN since 2012 but cancelled it in 2018 as he sought retirement. He resumed work in September 2019 but failed to reactivate his ABN because he mistakenly assumed that he only needed one if he was required to be registered for GST.
When COVID-19 struck, Mr Apted reactivated his ABN and applied for JobKeeper, but was knocked back because he missed the 12 March 2020 deadline, prompting him to reach out to the Australian Business Registrar to successfully backdate his ABN reactivation to 1 July 2019.
Despite the backdated ABN registration, the ATO disallowed Mr Apted’s objection, leading the taxpayer to apply to the Administrative Appeals Tribunal (AAT) for a review.
The tribunal found in favour of Mr Apted, noting that he satisfied all of the eligibility criteria and was “the kind of person who was intended to benefit from the JobKeeper scheme”.
The ATO, however, turned to the Full Federal Court to appeal the AAT decision, arguing that the 12 March 2020 requirement was a point-in-time test and that if the Australian Business Register had been inspected on that date, it would have shown if an entity had an ABN.
The Full Federal Court agreed with the ATO’s view, but ultimately ruled that the commissioner should have exercised his discretion to allow a later date for Mr Apted to hold an ABN and thereby satisfy the eligibility rules for JobKeeper.
While the Tax Office has now confirmed that it has resumed pursuing and enforcing debt recovery, ATO second commissioner Jeremy Hirschhorn has reassured businesses that it will not go too hard too soon.
“We want people to re-engage. It’s a relatively soft engagement. We get that it’s really hard to go from nothing to full payment,” said Mr Hirschhorn at Chartered Accountants Australia and New Zealand’s Practice Power Up Conference on Wednesday.
“We are expecting a lot of payment plans to really try to get businesses gradually back fully into the system.
“But what we don’t want to do is to support companies or businesses all the way through a pandemic and then by dialling debt collection up too quickly, we destroy the very thing that we’ve been trying to support.”
The resumption of debt collection activity comes after the ATO paused its debt, audit and lodgement work at the height of COVID-19, resulting in its debt book growing by $20 billion, according to Mr Hirschhorn.
“We pivoted as an organisation, we turned off some sacred cows in the Tax Office,” he said.
“We turned off debt collection, we turned off lodgement chasing up, we really dialled back almost to no new audit activity, and gave taxpayers the opportunity to say, ‘Do I want to pause my existing compliance activity, continue it or slow it?’, so we really tried to put that in the hands of the taxpayer.”
Mr Hirschhorn said it was necessary for the ATO to now resume its business-as-usual activities, but it remained conscious of struggling businesses amid a recovering economy.
“Where we are now is really saying, look, everybody should be lodging, and the default is that everybody should be paying,” Mr Hirschhorn said.
“We recognise that it is a strange economy still, because some businesses are absolutely going gangbusters, and other businesses are really still struggling. It’s not just the obvious industries like tourism, but [for example], it’s been a fantastic time for suburban coffee shops, and a terrible time for CBD coffee shops.
“What we’re really saying is, please approach us and we’re going to be very empathetic or reasonable around debt, but we really expect you to lodge.”
Those who were eligible for the grant before its March 31 conclusion (including both the $25,000 & $15,000 grants), will now have 18 months after signing contracts to commence construction.
The Government’s decision responds to unanticipated delays in the construction industry caused by COVID-19 related supply constraints including delays in global supply chains and recent natural disasters.
Please note applications for the HomeBuilder Grant closed at midnight, 14 April 2021.
Read More: HomeBuilder Fact Sheet
The new data-matching program will allow the ATO to verify the identity and residency status of individuals to ensure that they are complying with their registration, lodgement, reporting and payment obligations for tax and superannuation purposes.
The new data-matching program follows a trend of other similar programs, including the ATO’s most recent extension to its motor vehicle data-matching program that aims to identify taxpayers who are purchasing expensive cars that are not proportionate to their reported income.
The Tax Office expects the personal information of approximately 670,000 individuals to be analysed each financial year, with the data to include their full name, date of birth, arrival and departure date, passport information, and residency or visa status.
While the ATO says that data collected through the program will not be used directly to initiate automated compliance activity, it will help it develop risk detection models to help it profile, determine and assess taxpayers and their tax residency status. Taxpayers can still be identified for compliance action through “other methods”.
Where discrepancies or non-compliance is discovered, the ATO will contact individuals by phone, letter or email and provide them with at least 28 days to respond before administrative action is taken.
“For example, where discrepancy matching identifies that a taxpayer may not be reporting all their income, but in fact they’re reporting the income under another entity, the taxpayer will be given the opportunity to clarify the situation,” the ATO said.
Where taxpayers fail to comply with these obligations, after being reminded of them, prosecution action may be instigated in appropriate circumstances.
Records received from Home Affairs will be retained for five years, and builds on the ATO’s visa data-matching program that began more than a decade ago.
Data-matching allows the ATO to cross-reference suitable external data to identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the tax and superannuation systems.