Hiring employees for the festive season As the festive season approaches, employers that hire new employees to help with their business should remember the following when it comes to their employer tax and super obligations: Employers should make sure they are withholding the right amount of tax from payments they make to their employees and other payees, especially as this will help their employees meet their end-of-year tax liabilities; Employers must pay super guarantee (currently at 11.5%) to all eligible employee's super funds in full and on time to avoid paying the super guarantee charge; and If employers are still not reporting through single touch payroll ('STP') and they do not have an approved exemption, deferral or concession in place, they should start reporting now. If they have just started a business or recently employed staff, they will need to report through STP from their first payday. Lodging and paying business activity statements The ATO is reminding taxpayers that it is important to lodge BASs and pay in full and on time to avoid penalties and interest charges. The BAS for the first quarter of 2024/25 is generally due on 28 October, but taxpayers will receive an extra: four weeks if they lodge through a registered tax or BAS agent; or two weeks if they lodge online. The cost of managing tax affairs is tax deductible for taxpayers, and a registered agent's help will allow them to focus on running their business. Deductions for financial advice fees The ATO has provided guidance about when an individual not carrying on an investment business may be entitled to a deduction for fees paid for financial advice. An individual is entitled to a deduction for fees for financial advice to the extent that the loss or outgoing is incurred in gaining or producing assessable income, unless the loss or outgoing is of a capital, private or domestic nature. Fees for financial advice an individual incurs may also be deductible to the extent that the advice relates to managing their 'tax affairs' (e.g., fees for advice in relation to salary sacrifice arrangements). However, fees for financial advice on a proposed investment prior to the acquisition of an asset, or about how to invest additional funds to grow an investment portfolio, will not be deductible. The individual must also have sufficient evidence of the expenditure to claim the expense as a deduction, such as a properly itemised invoice.  ATO's notice of government payments data-matching program The ATO will acquire government payments data from government entities which administer government programs for the 2024 to 2026 income years, matching data on government payments made to service providers against ATO records, including service provider identification details and payment transaction details. The ATO estimates that records relating to approximately 60,000 service providers will be obtained each financial year, including approximately 9,000 individuals, with the remainder consisting of companies, partnerships, trusts and government entities. FBT on plug-in hybrid electric vehicles From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under fringe benefits tax law and will not be eligible for the electric car FBT exemption. However, an employer can continue to apply the electric car exemption if: use of the PHEV was exempt from FBT before 1 April 2025; and they have a financially binding commitment to continue providing private use of the vehicle to an employee or their associate on and after 1 April 2025 (note that any optional extension of the agreement is not considered binding). If there is a change to a pre-existing commitment on or after 1 April 2025, the FBT exemption for the PHEV will no longer apply from the date of that new commitment. An employer is not entitled to an exemption from FBT after 1 April 2025 if there was no binding financial commitment to provide the car to a particular employee in place before then. Eligibility for compassionate release of superannuation The ATO has been responsible for the administration of the early release of superannuation on compassionate grounds since 1 July 2018. It will only approve a release of superannuation on compassionate grounds if the applicant meets all the conditions set out in the regulations, including that the applicant has no other means to pay the expenses. The five main grounds of eligibility are: medical treatment or transport (i.e., to treat a life-threatening illness or injury, or alleviate acute or chronic pain or mental illness) for the applicant or their dependant; accommodating a disability for the applicant or their dependant; palliative care for a terminal illness for the applicant or their dependant; funeral expenses for a dependant of the applicant; or preventing foreclosure or forced sale of the applicant's home. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

Avoid a tax time shock Individual taxpayers can take the following steps to ensure the correct amount of tax is being put aside throughout the year: Let your employer know if you have a student loan, such as a HECS or HELP debt Check you are only claiming the tax-free threshold from one employer Consider whether the Medicare Levy Surcharge may affect you this financial year Check your income tier is correct for your private health insurance rebate Consider voluntarily entering PAYG instalments and pre-paying tax throughout the year to avoid a large tax bill at tax time for investment or business income Reminder of September Quarter Superannuation Guarantee Employers are reminded that employee super contributions for the 1 July 2024 to 30 September 2024 quarter must be received by the relevant super funds by 28 October 2024 in order to avoid being liable to pay the SG charge. myGovId changing its name to myID The digital identity app 'myGovID' will soon be changing its name to 'myID'. While the name is changing, the login and security will not change. Taxpayers who have already set up their myGovID and use it to access government online services will not need to do anything when the app changes to myID. They will still have: The same details — there is no need to set up a new myID. Your login details and identity strength remain the same Continued use — once available your existing app should automatically update to myID or they can manually update it from the APP Store or Google Play Access to services — You can still use the app to securely access government online services. The new name aims to reduce the confusion between myGovID and myGov. ATO security safeguards for victims of fraud recently enhanced Where a taxpayer has been the victim of identity, tax or super fraud, the ATO may apply security safeguards to their account to prevent further harm. This may require the impacted taxpayer to contact the ATO each time they need to access their information and cause inconvenience for the taxpayer as well as their tax agents. The ATO has recently enhanced processes to improve ongoing access to ATO online services. Impacted taxpayers must contact the ATO for initial access and then set a Strong online access strength. To set a Strong online access strength, taxpayers need to: Set up your myGovID to a Strong identity strength using their Australian passport; Connect your myGovID to their myGov account; Sign in to myGov with your myGovID; and Go to ATO online services. Once set, taxpayers no longer need to contact the ATO every time they access their information. Impacted taxpayers must continue to use their Strong myGovID whenever they access ATO online services, or account access will be restricted to maintain ongoing protection of client information. Valuing fund assets for SMSFs One of the many responsibilities SMSF trustees have every income year is valuing their fund's assets at market value. The market value of an asset is the amount that a willing buyer and seller would agree to in an arm's-length transaction. These valuations will be used when preparing the fund's accounts, statements and SMSF annual return. Asset valuations will be reviewed by an approved SMSF auditor as part of the annual audit prior to lodgment of the SAR. The auditor will check that assets have been valued correctly and assess and document whether the basis for the valuations is appropriate given the nature of the asset. The auditor is not responsible for valuing fund assets. Taxpayers should ensure that they have their valuations done before going to the auditor. It is the responsibility of the SMSF trustee to provide objective and supportable evidence to their auditor for the valuation of the fund's assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of their annual return or a contravention if mistakes have been made. SMSF trustees should start researching now to find what type of evidence they need to support the valuation as this can take time. For some asset types valuations must be undertaken by a qualified independent valuer. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.

Pre filling information is now updated With millions of pieces of information now pre-filled, including information from banks, employers, government agencies and private health insurers, the ATO has given the 'green light' to lodge your tax returns. The ATO reminds taxpayers that the rules regarding how and when you can claim a deduction can change, including in relation to car expenses and working from home costs. Therefore, you should not just 'copy and paste' your deductions from last year, and speak with our accountants for your claims. The ATO notes that taxpayers using a registered tax agent normally have the extended due dates. Business self-review checklist: GST classification of products GST classification errors can lead to significant under-reporting of GST for some taxpayers. The ATO recently issued guidance for small to medium businesses on self-reviewing GST classification of food and health products. The use of this guide is not mandatory, although the ATO encourages small to medium businesses to regularly self-review the GST classification of supplies, and adopt better practice processes and controls as listed in the accompanying checklist. The checklist provides practical, step-by-step guidance for entities to: self-review the GST classification of their supplies (products they import, purchase as stock or produce for sale); and assess the robustness of their business systems, processes and controls that directly impact their GST classification systems. Small business food retailers with turnover of $2 million or less may use one of the 'GST simplified accounting methods' to account for GST instead. Receiving payments or assets from foreign trusts Additional tax liabilities may arise when money or assets of a foreign trust are paid to a taxpayer or applied for their benefit, and they are a beneficiary of the foreign trust. These can include: loans to them by the trustee directly or indirectly through another entity; amounts paid by the trustee to a third party on their behalf; amounts that are described as gifts from family members, but are sourced from the trust; and distributions paid to them or trust assets transferred to them by the trustee. Taxpayers who receive money from a foreign trust may need to ask further questions to determine whether the amount must be included in their assessable income, including: whether they are a beneficiary of the foreign trust; where the foreign trust obtained the money; and why the money was paid to them, e.g., is it a payment for services, a gift, a distribution or a loan. Record keeping for work-related expenses Taxpayers need to consider what work-related expenses they will be looking to claim in the new financial year, and what records they will need to substantiate those deductions. Records can be kept as a paper version, an electronic copy, or a 'true and clear' photo of an original record. Working from home deductions Taxpayers can use two different methods to calculate their working from home deductions, and they each have different requirements: With the fixed rate method, taxpayers will need a record of the actual number of hours they worked from home for the whole financial year, and at least one record for each of the additional running expenses they incurred that the rate includes (e.g., an electricity bill). To use the actual cost method, taxpayers must also keep records for any additional running expenses they incurred, and the depreciating assets they bought and used while working from home, and show how they apportioned work-related use for their expenses and depreciating assets. Please contact our office if you need any assistance with your record keeping requirements, such as logbook requirements for car expenses. Tax incentives for early stage investors The ATO is reminding investors who purchased new shares in a qualifying 'early stage innovation company that they may be eligible for tax incentives. These tax incentives provide eligible investors who purchase new shares in an ESIC with: a non-refundable carry forward tax offset equal to 20% of the amount paid for their eligible investments – this is capped at a maximum tax offset amount of $200,000 for the investor and their affiliates combined in each income year; and modified capital gains tax ('CGT') treatment, under which capital gains on qualifying shares that are continuously held for at least 12 months and less than 10 years may be disregarded – capital losses on shares held less than 10 years must be disregarded. The maximum tax offset cap of $200,000 does not limit the shares that qualify for the modified CGT treatment. The information provided in this Newsletter is general in nature and if you have any queries or require further information or assistance with the above, please contact our office.