Menu
you are here: Home > News and Events
Welcome to Twomey Talk where you can take advantage of the specialist knowledge of our team & learn their thoughts on various issues that may
impact YOU!

NSW LONG SERVICE LEAVE CORPORATION

Workers must be registered and record the time worked in the relevant industry at the end of each financial year.  Self-employed workers also report details of their assessable income and prescribed costs each year.  Lodgements can now be made for up to 6 prior financial years.

Workers covered by the Building and Construction Industry Long Service Payments Act 1986 are those who carry out construction, reconstruction, renovation, alteration, demolition, maintenance or repairs of or to any of the following: Airfields, aqueducts, breakwaters, bridges, buildings, chimney stacks, cooling towers, docks, drilling rigs, fences, gas holders, works for water supply or storage, harbour/river or water course improvements for the purpose of navigation, jetties, irrigation works, navigational lights/beacons or markers, piers, pile driving, pipelines, railways, roads, sewerage works, silos, swimming pools, transmission of electric power, transmission of wireless or telegraphic communications, tunnels, viaducts and wharves.

It includes structures, fixtures or works for use in, or in conjunction with, any of the above and site preparation. Work is not restricted to onsite work; it also includes some offsite work.

Work carried out in NSW in the contract cleaning industry has been covered since 1 July 2011. The work has to be all or mostly involved in bringing a premises to a clean condition, or keeping it in a clean condition. A premise means the whole or any part of a building, structure or place, whether built on or not. The scheme covers cleaning work performed on commercial and domestic premises and can include a small amount of minor property maintenance. 

Examples of types of cleaning work covered include: mopping, vacuuming, dusting, sweeping, Carpet cleaning, high pressure cleaning of pavers, walkways and buildings, window and gutter cleaning, graffiti removal, swimming pool cleaning (not repair &/or maintenance work), housekeeping.

For more information, go to:  https://www.longservice.nsw.gov.au

New legislation to deny some land owners a tax deduction for the costs of holding vacant land is awaiting Royal Assent.

The new law will deny individuals, self-managed superannuation funds and discretionary trusts a tax deduction for borrowing costs, interest on loans to acquire the land, land taxes, council rates and maintenance costs.

Land is considered vacant if:

  • at the time the expense was incurred, the land did not contain a substantial and permanent structure; or
  • the land did contain a substantial and permanent structure that is residential premises, the premises is not lawfully able to be occupied, or it is not rented out or made available for rent.

The new law will apply where the land is held pending the development of residential property or where land is leased to a lessee who is not conducting a business. This includes land leased to a community club, government organisation, charity or hobby farm, where there is no business activity being undertaken.

Once Royal Asset is obtained, the new legislation will be effective from 1 July 2019 and will apply even if the land was held by the entity before 1 July 2019.

A recent Full Federal Court decision handed down on 21 August 2019 confirmed that all employees (including part-time employees) are entitled to  10 "working days" of personal/carer's leave per year under the Fair Work Act, regardless of how many hours the employees work per day or how many days are worked per week.

The decision will have wide-ranging implications for employers, the overwhelming majority of whom do not presently accrue personal/carer's leave in this manner.

WHAT THIS MEANS FOR EMPLOYERS
Most payroll systems accrue personal/carer's leave on an hourly basis. Rather than expressing an employee's leave entitlement in days or weeks, payroll software tends to record the accrual as an hourly amount (with 7.6 hours often reflecting one day's accrual).

Most payroll systems tend to accrue 76 hours of personal/carer's leave per year for full time employees, and a pro-rata amount for part-time employees.

If your payroll system works in this way, you will need to ensure that:

  • 12 hour shift workers either accrue 120 hours of personal/carer's leave per year (instead of 76) or, alternatively, only have 7.6 hours leave deducted from the personal/carer's leave balance, yet pay the shift worker for the entire shift whenever they are absent from an entire 12 hour shift
  • similar treatment is afforded to other shift workers who work more than 7.6 ordinary hours in a day; and
  • part-time employees accrue a full 10 working days per year (as opposed to a pro-rated amount based on their shorter working week).

WORK CHRISTMAS PARTIES AND GIFTS

The Fringe Benefits Tax and Income Tax rules surrounding work Christmas parties and gifts are complex.

A brief summary of the most commonly encountered scenarios for employers using the actual FBT method is provided below with full details at https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/in-detail/fbt-and-christmas-parties 

           
  Fringe Benefits Tax  Income Tax   GST
 Christmas Party - food drink and entertainment: cost $299 or less per employee  Exempt from FBT  Not tax deductible No GST credit claimable
 Christmas Party - food drink and entertainment: cost  $300 or more per employee  Subject to FBT  Is tax deductible GST credit claimable
 Food drink and entertainment provided to client/supplier  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to employee: $299 or less - not entertainment**  Exempt from FBT  Is tax deductible GST credit claimable
 Gift to employee: $299 or less - entertainment  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to client/supplier - not entertainment  Exempt from FBT  Is tax deductible GST credit claimable

* Entertainment = theatre, movie or sporting event tickets, gym membership, sporting club memberships
** Not entertainment = bottle of wine, Christmas hamper, perfume, flowers, pen

TAX TIME 2019

TAX PLANNING - HOW MUCH TAX WILL YOU PAY IN 2019?

Tax planning offers many opportunities for taxpayers:

- Legally arrange your affairs in a manner to minimise your taxation liabilities
- Control the amount of tax you pay
- Maximise your access to tax rebates
- Plan your cash flow by knowing your taxation liabilities in advance.

Book your tax planning appointment before 30 June 2019 to review your 2019 profit, to estimate your tax payable and to put in place tax minimisation strategies.

Single Touch Payroll requires employers to send tax and superannuation information to the ATO every time they pay their employees and will commence on 1 July 2019 for all employers.

Features of Single Touch Payroll:

- Employers will no longer need to provide their employees with payment summaries for the information they report through Single Touch Payroll.
- Employees will find the information they need to complete their income tax return in ATO online services, accessed through myGov. Employees who choose not to have a myGov account can contact the ATO to get a copy of their payment summary information.
- Employers will no longer need to provide the ATO with a payment summary annual report (PSAR).
- From January 2020, the ATO will pre-fill activity statement labels W1 and W2.
- Employers will be able to offer online commencement forms to new employees, including Tax file number declaration, Superannuation (super) standard choice, Withholding declaration and Medicare levy variation declaration forms that can be sent to the ATO from myGov.

How to report through Single Touch payroll:

  • Report through your existing Single Touch Payroll enabled software
  • Report through a new Single Touch Payroll enabled software.  If you are a micro employer with one to four employees, the ATO has compiled a list of 24 companies that have put forward product proposals to offer low cost (ie less than $10 per month) Single Touch Payroll solutions. The list can be found at www.ato.gov.au/business/single-touch-payroll/in-detail/low-cost-singletouch-payroll-solutions.
  • Ask a third party, such as a registered tax or BAS agent or payroll service provider, to report through Single Touch Payroll on your behalf. If you have four or less employees, Twomeys will be able to report your Single Touch Payroll information quarterly for the first two years, rather than each time you process a pay run.

NB: If you have closely held payees (i.e. the payee is directly related to the entity from which they receive payments, for example family members of a family-owned business), you are exempt from reporting closely held payees for the 201920 financial year.

The instant asset write-off threshold has increased to $30,000, and has been extended to 30 June 2020.

The instant asset write-off now also includes businesses with a turnover from $10 million to less than $50 million. These businesses can claim a deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and first used or installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.

Businesses with a turnover of up to $10 million can also claim a deduction for each asset purchased and first used or installed ready for use, up to the following thresholds:

- $30,000, from 7.30pm (AEDT) on 2 April 2019 until  30 June 2020
- $25,000, from 29 January 2019 until before 7.30pm (AEDT) on 2 April 2019
- $20,000, before 29 January 2019.

NB: The GST exclusive cost of the asset must be less than the above thresholds in order to claim an instant asset write-off.

Heavy vehicles can be used in different activities both on and off public roads. The amount of fuel tax credits you can claim depends on what fuel you use, when you acquired it and if you use it:

  • for travelling on public roads
  • in all other activities, including off public roads, on work sites and to power auxiliary equipment.

You need to do separate calculations for different fuel tax credit rates.

To work out how much fuel was used in the different activities, you can use any apportionment method considered fair and reasonable for your circumstances.
Common methods and measures include where you:

  • add up all the eligible quantities of each fuel type that attract the same fuel tax credit rate
  • subtract any ineligible fuel, such as fuel you used in light vehicles on a public road, from the total fuel acquired
  • determine a reliable percentage of eligible fuel usage for a sample period and apply this over a number of tax periods.

The ATO's simplified method for working out fuel used in vehicles with auxiliary equipment can be found at:
www.ato.gov.au/business/fuel-schemes/in-detail/heavy-vehicles/?page=5#Methodsofworkingoutfuelconsumption_auxil and includes the following:
 

 Vehicle Percentage  Auxiliary equipment
 Concrete truck  30%  Mixing barrel and mechanisms for loading/unloading concrete
 Commercial coach  5%  Air conditioning
 Refrigerated vehicle  10%  Refrigeration unit
 Waste collection  15%

 Bin lifting equipment

The current fuel tax credit rate for heavy vehicles travelling on a public road is 15.8c/litre and for all other uses – including power auxiliary equipment of a heavy vehicle is 41.6c/litre. With such a large difference in the rates, it is important that you identify any non on road use of heavy vehicles and claim it at the appropriate higher rate.


The ATO has announced it will continue its data matching program of share transactions acquired between 20 September 1985 to 30 June 2018.

The objective of the program is to ensure that taxpayers are correctly meeting taxation obligations in relation to share transactions, including registration, lodgement, reporting and payment responsibilities.

In particular, the ATO will continue to acquire details of share transactions from sources such as Computershare, Link Market Services, Australian Securities Exchange, Boardroom and ASIC.

The ATO has enacted legislation to extend the industries required to report payments to contractors under the Taxable Payments Reporting System (TPRS) regime.

Road freight, IT and security investigation or surveillance industries will need to report payments from 1 July 2019.   This is in addition to the cleaning and courier industries which came under the TPRS from 1 July 2018, and the Building and Construction industry which has been required to report payments to contractors since 2012.