Posts Categorized: General
Legislation passed last week which makes unpaid family and domestic violence leave part of the National Employment Standards.
The National Employment Standards are issued by Fair Work Australia. The set out the minimum entitlements to be provided by all employers.
There are 10 such standards with unpaid family and domestic violence leave now being grouped with personal./carer’s leave and compassionate leave.
If you would like to know more, of to
If you like to work with an accountant who will keep you abreast of such changes then speak to us.
We can also help you setting up your payroll to be compliant with Single Touch Payroll from July 2019.
The ATO is getting serious about unpaid employee SG super.
Legislation passed last week means employers can be forced to attend educational courses and even be jailed. The ATO will also have the power to issue what are called Director Penalty Notices (DPNS). DPNs make unpaid SG super a personal liability of a director.
The government is greatly concerned about the amount of unpaid SG super. It has now given the ATO the weaponry to address non and under compliance. And from July with the expansion of Single Touch Payroll to all employers, the ATO will know which employers to track down.
Speak to us if you need help with your payroll.
Australians now living overseas – beware! Legislation has been put before Parliament that will mean that an Australian living overseas who sells their former Australian family home will pay tax on the entire gain!
This will equate to tax in the hundreds of thousands of dollars!
Even though some of the backlog of legislation before the Senate was passed last week, the bill covering this has yet to be passed. I believe Parliament ceases sitting this week. One could expect that political games will continue and it may be some time before this is passed (if it is indeed it is ever passed).
Separate tax laws apply to non-residents. Non residency is not determined by your passport or visa therein. It is determined by tax law. Generally speaking, someone living outside Australia for more than two years is presumed to have become a non-resident of Australia for income tax purposes. Many other factors are taken into account which are beyond the scope of this blog.
This became more important following the 2012 Federal Budget when non-residents ceased to be entitled to claim the 50% capital gains tax discount.
The proposed law to take effect from July 2019 will fully tax the capital gain on a former family home located in Australia. It will not matter how long the property was used as a home (remembering that one’s home is exempt from capital gains tax). That seems most unfair as per the following example.
Bob & Sally bought a family home in 2005 for $500,000. They live in it for 12 years until moving to take up a 2 year position in London. They enjoy it so much they decide to stay and buy a home in London. To do so, they have to sell their former Melbourne home. They sell it for $1,200,000 in 2020. Under existing law, they would pay no tax as their home was initially their principal residence and the gain thereafter is also disregarded under a six-year absence rule. Under the proposed new law, they would pay tax on the full gain of $700,000. Furthermore, there is no tax free threshold for non-residents so they would pay tax from the first dollar at 32.5% and thereafter at progressively higher marginal tax rates. We are talking tax in the hundreds of thousands of dollars.
In order not to pay tax, Bob and Sally would have to either:-
- Sell it before July 2019.
- Sell it upon their return to Australia (which may not be possible if they need to release equity to finance the new London home).
The legislation is yet to be passed by the Senate. It is not law. In my view this is not acceptable particularly with July not being that far away. All we can continue to do is monitor the situation and continue to raise it with clients as we meet with them.
In the meantime, we welcome any question you have.
We also encourage of you to think of any family, neighbour or friend who may be affected by this.
And don’t start me on the other tax changes stuck in Parliament!
Who will get your super? Unfortunately, that is a question that many fail to address.
Having a will does not resolve this issue. A will dictates what happens to your personal assets. As super is held in trust, your will cannot dictate where your super will go.
In order to set out to whom you would like your super to go, you need to make what is called a death benefit nomination. There are three kinds of death benefit nominations. Each type has its merits and disadvantages. The best one for you depends on your position and what you would like to happen.
What is best for you is often complex, particularly when there are self managed super funds and trusts (where the issue of on-going control is important). Furthermore the tax considerations can be a major factor in determining the best way to leave what assets to what people. This is all best discussed with a financial planner and skilled estate planning lawyer. Please ask us for a referral.
Cash flow. If you want to get paid faster make it easier for your customers.
Provide your customers with a link on an invoice to pay via a payment gateway.
There are many of them such as Paypal, Square and Stripe. Ask us which is the best solution one for you.
Will these solutions cost you money – yes the will. But that cost will be covered by giving you the use of sales money earlier and avoid lost time from chasing payment. And don’t start me on bad debts – that will be a future blog.
Travel expenses area tax auditor’s delight. So what do you need to do to claim everything you are entitled to claim? The basics are:-
- One must keep written or scanned evidence of all expenses when away from home for more than one night.
- If one is travelling overseas or away for more than six nights within Australia, then a travel diary must be keep. Note the word must; it is not an optional requirement. No diary, no claim.
- Travel diaries can be bought at most newsagents. The simplest things to say is fill in each column to each row, but it is worth noting that one must record:- – the nature of the activity. – the day and time that the business activity commenced. – how long the business activity lasted – the name of the place where you engaged in the business activity.
- Collect as many business cards and brochures as you can. Photos are also great proof of what you did.
What if the trip is partly private and how might costs be split?
These are my views as the ATO provides surprising little clarity on this matter:-
- If one goes for a conference to say Europe, then such a long haul means that it is unreasonable to expect one to fly in the day before and then spend say four days sitting in a darkened room. Arriving say two days early does not in my view change the purpose of the trip. Consequently, the cost of the whole flight remains fully deductible.
- In my view, if one stays on for a day and/or it coincides with a weekend, the trip remains fully deductible.
- The costs incurred on the work/conference days are deductible such as accommodation and food (but not excessive alcohol).
- Sightseeing trips are not deductible.
- What if one attends a week long conference but enjoys a week’s holiday beforehand or afterwards? Clearly the holiday is not deductible. However, it also raises a question as to whether the whole air fare can be claimed. Unless there is some compelling counter argument, the air fare would need to be apportioned on a proportional days basis.
- What if one’s partner comes along to the conference or business trip. One method is to only claim half of the accommodation costs. Another method which I subscribe to is to find out the single rate and claim that – as that is what would have been incurred but not for the partner. In some cases, it is the same rate. Make sure you keep the evidence of the alternative room rate.
A common problem is obtaining receipts in some countries.
Thankfully, the ATO provides relief to this problem. The ATO allows employers to pay their employees (which can includes the directors of a company) a daily travel allowance. The ATO annually sets out daily rates that employers can pay employees to cover their daily travel costs of food, travel and other incidental expenses. There are rates for Australia (which include accommodation) and overseas (which do not include accommodation costs as they must be fully substantiated). Please ask us if you would like a copy of the current year rates. There are differing rates for different areas with higher rates applying to higher costs centres and levels of salary. Moreover, an employee is exempt from substantiation if they do not claim more than the allowance.
As it is an allowance, it must be treated as such in your payroll system, be reported within W1 on the next BAS and shown as an allowance on the end of year PAYG Payment Summary. Please ask us if you would like help in setting this up correctly.
For further information on reasonable travel allowances, please search on our past blogs.
Please remember that as it is an allowance, this method can’t be used by those running a business in their own name or by partners in a partnership.
Not sure how much long service leave an employee is entitled to? That’s a common question as the rules are quite complex, particularly when an employee changes their hours of work over the entitlement period. Thankfully, the government department Business Victoria has a long service leave calculator which you can use.
You can go to http://www.business.vic.gov.au/calculatelongserviceleave and work through a series of questions so have your employment records to hand.
You also need to mindful that the governing legislation was replaced on 1st November 2018. At that time the Long Service Leave Act 2018 came into effect. This Act has a number of significant changes that all employers need to be aware of. For more detail, please refer to our November 2018 edition of Tips & Traps (that being our monthly client newsletter). Please don’t hesitate to contact us if you would like a copy forwarded to you.
We welcome your contacting us should you require any guidance or assistance in respect of this or any other employment matter.
WorkCover requires that the If you are injured at work poster in each workplace.
You can download the poster at https://tinyurl.com/ychzvxdw
If you want to get paid quicker by your customers make it easy for them. One way to do so is to provide credit card facilities. Yes, you may be charged merchant fees but that is usually cheaper than the costs incurred in carrying your debtors.
Call us if you would like help with this.
You can apply for a Tax File Number by:-
- Completing an online form and then booking an appointment at Australia Post. The appointment must be held within 30 days of completing the form. You must take the completed form and proof of identity documents with you to that meeting.
- Department of Human Services customers can apply in person.
- You can also order an application form and mail it to the ATO.
Our clients have tended to prefer the Australia Post option. A Tax File Number (TFN) should issue within 28 days. You can access the Australia Post TFN application form here – https://identityservice.auspost.com.au/ato/landing
You can apply at any age for a TFN.
Common reasons for young people to apply are:-
- Required for part time work.
- To be able to register for a university course (and the HELP system).
- Notifying bank of your own TFN rather than your parents’. Banks will withhold tax at 47% where interest is more than $120 and a child is over 16. The limit is $420 where a child is under 16.
In reality, it’s never too early to apply for a TFN.
A TFN is a most sensitive personal identifier. Extreme care should be taken to protect it. If you believe your TFN has been stolen, you should report the ATO’s Client Identity Support Centre on 1800 467 033 (open between 8.00am and 6.00pm, Monday to Friday).
You may also wish to watch the ATO’s YouTube video on applying for a Tax File Number.