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On 1 July 2017, changes to the tax offset for spouse superannuation came into effect with an increase in the spouse income threshold from $10,800 to $37,000.

Taxpayers are eligible to claim the maximum tax offset of $540 if:

> they contribute $3,000 to a spouses eligible super fund, and

> the spouses assessable income plus total reportable fringe benefits plus reportable employer super contributions is less than $37,000.

ATO DATA MATCHING

The ATO uses data matching as a powerful administrative and law enforcement tool.

Information from a variety of third-party sources is compiled electronically, validated, analysed and used for a range of education and compliance activities.

It allows the ATO to detect people and businesses operating outside the tax system, detect fraud against the Commonwealth, identify innocent omissions by taxpayers and recover debt.

Over 600 million transactions are collected annually from a range of sources, including:

> Bank, financial institutions and investment bodies

> Employers

> State and Territory motor vehicle registering bodies

> State and Territory title offices and revenue agencies

> Government agencies

> AUSTRAC and Australia's international treaty partners

> Online selling platforms

> Sharing economy facilitators

> Stock exchanges and share registries

> Businesses in the building and construction industry

> Health insurers

EMPLOYEE v CONTRACTOR

We are frequently asked "What is the difference between an employee and a contractor?" An employee works in the business and is part of the business. A contractor is running their own business.

The ATO takes six main factors into account to determine whether a worker is an employee or contractor for tax and superannuation purposes:

• Ability to subcontract/delegate

• Basis of payment (eg hourly rate, commission or fixed quote)

• Provision of equipment and tools

• Commercial risk

• Control over the work (what, where, how and when the work is performed)

• Independence

The ATO has a decision tool to assist in determining if a worker is an employee or a contractor: https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/

ATO ANNOUNCES FOCUS AREAS FOR 2018

The ATO has recently announced its focus areas for the financial year ended 30 June 2018.

These include:

• Substantiation of work related expenses such as home office, mobile phones, internet and tools

• Motor vehicles: private use calculations, the need to have a valid logbook and how kilometres are calculated if using the c/km claim method

• Uniforms and protective clothing: must be occupation specific, protective, registered or compulsory

• Cash economy and businesses that have low use of merchant banking facilities, such as beauty salons, cafes and restaurants

• Employers who are not meeting their employee Superannuation Guarantee obligations

SINGLE TOUCH PAYROLL IS HERE

Single Touch Payroll will be mandatory for employers with 20 or more employees (substantial employer) from 1 July 2018 and for ALL employers from 1 July 2019.

Employee numbers are determined based on payroll on 1 April 2018 and include full-time employees, part-time employees, casual employees who worked any time during March 2018, employees who are on leave (paid or unpaid) and seasonal employees.

Employee numbers are based on head count and not on full-time equivalents. Employers who are located in a rural area with no reliable internet connection or who are substantial employers for only a short period of the year (eg due to shearing or harvesting activities) may apply for an exemption from Single Touch Payroll reporting.

Employers will be required to report salary or wages, PAYG withholding and superannuation information directly to the ATO at the same time that payment is made to their employees. Employers who report through Single Touch Payroll will not be required to provide employees with Payment Summaries at the end of the year.

For more information go to  

www.ato.gov.au/about-ato/about-us/in-detail/strategic-direction/streamlined-reportingwith-single-touch-payroll/

 

 

AWARD CHANGES

Effective 12 December 2017, the Fair Work Commission (FWC) varied certain overtime rates and minimum shift entitlements for casual and part-time employees in several awards.

The decision introduces overtime rates for casual employees in many of these awards and changes how part-time hours can be worked in others. The changes are different for each award, so they affect employers and employees differently depending on the award they're covered by.

These changes apply from the first full pay period on or after 1 January 2018, and affect the following awards:

  • Fast Food Award
  • Hair and Beauty Award
  • Hospitality Award
  • Passenger Vehicle Award
  • Pastoral Award
  • Rail Award
  • Registered Clubs Award
  • Restaurant Award
  • Retail Award
  • Social and Community Services Award
  • Wine Award.

For more information go to: https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/changes-to-casual-part-time-entitlements-in-some-awards

From 1 January 2018 eligible small businesses (generally with less than $2million turnover) in NSW will not be required to pay duty on certain types of insurance, including:

• Occupational indemnity insurance (or professional indemnity) – covering liability arising out of the provision of professional or other services (other than medical indemnity insurance)

• Product and public liability insurance – insurance covering liability for personal injury or property damage occurring in connection with, or arising out of the products or services of, a business.

• Commercial vehicle insurance – for a motor vehicle used primarily for business purposes

The insured is required to lodge a small business declaration with their insurer at the time that the contract of insurance is effected or renewed.

Crop and livestock insurance is also exempt from duty from 1 January 2018 for all primary producers.

From 1 July 2017, travel expenses relating to inspecting, maintaining, or collecting rent for a residential rental property cannot be claimed as deductions by investors.

$20,000 INSTANT ASSET WRITE-OFF

The instant asset write-off threshold of $20,000 ends on 30 June 2018, and will revert to $1,000 from 1 July 2018.

Until 30 June 2018, the business portion of assets that cost less than $20,000, can be immediately claimed as a tax deduction for businesses with a turnover less than $10 million. Assets that cost $20,000 or more can't be immediately deducted, but are deducted over time using the general small business pool.

ATO BUSINESS PORTAL

The ATO's Business Portal provides secure access to a range of tax and superannuation services with one logon, including:

• access the Small Business Superannuation Clearing House to prepare, lodge and pay employee superannuation

• prepare, lodge and revise Business Activity Statements (BAS)

• view your ATO statement of account and payment options

• view your reports for Single Touch Payroll

• request a refund or transfer of funds between ATO accounts

• update your business registration details

• register for goods and services tax (GST) and PAYG withholding (PAYGW)

• request a ruling or lodge an objection

• communicate with the ATO through a secure mailbox.

For more information on how to register for the Business Portal, go to www.ato.gov.au/Business/Business-Portal/Getting-started/.