 Yes but No!
The Current Law says - No an Uber is NOT a Taxi ATO position on ride-sourcing and the FBT taxi travel exemption We recently confirmed our existing view that the taxi travel exemption from FBT does not extend to ride-sourcing vehicles like Uber. Ride-sourcing vehicles do not meet this taxi travel exemption even though the Federal Court in Uber BV v Commissioner of Taxation [2017] FCA 110 confirmed that use of a ride-sourcing vehicle counts as ‘taxi travel’ for GST purposes. This is because, for FBT purposes, the taxi travel exemption is only available to trips in a ‘taxi’, which the FBT law defines as a ‘motor vehicle that is licensed to operate as a taxi’. Ride-sourcing vehicles do not have such a license. For more information, read the ATO’s FBT Guide for Employers. Impact of this position on FBT and the use of ride-sourcing vehicles The taxi travel exemption most commonly arises when an employer provides their employee the use of a taxi for a private purpose (such as a trip home from work when an employee is unwell). If an employer instead offers the use of a ride-sourcing vehicle for these purposes, they may incur a liability for FBT. However, if an employer pays for their employee to use a ride-sourcing vehicle for work purposes, such as transport between two workplaces, they will not have an FBT liability if the expenditure would be deductible by the employee. Further, if an employer pays for an employee’s travel in a ride-source vehicle only once or twice a year on an ad hoc basis, and the value of the benefit is less than $300, then such travel may be exempt from FBT as a minor benefit. New Law as proposed to Parliament says Yes Treasury has released an exposure draft of a Miscellaneous Amendments Bill for community feedback by 27 September 2019. The exposure draft proposes to make amendments to the Fringe Benefits Tax Assessment Act 1986 in relation to the FBT taxi travel exemption. According to the draft explanatory memorandum, these amendments propose to replace references to a ‘taxi’ with ‘a car used for taxi travel (other than a limousine)’. It notes that this change is ‘a result of ride sharing providers entering into the market, making it difficult to administer the current meaning of ‘licensed to operate as a taxi’ The term ‘taxi travel’ is proposed to be defined as having the same meaning as in the GST legislation. So what do we do now? Current law says you must record uber like trips from work to home separately from taxi trips because the FBT treatment is different. The consultation on the proposed law change concludes 27 September and will then be considered by Parliament. Boox are always here to help with your questions. Contact us for more information email: [email protected]
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Currency (Restrictions on the Use of Cash) Bill 2019
The community has been given opportunity to engage in conjecture and comment in regard to a very important piece of legislation. The bill addresses cash handling and payment rules, specifically whether high value payments are able to be made in cash. The new bill proposes a number of penalties for accepting payment in excess of $10,000 in cash. While the call for consultation ended on the 12th of August you are still able to ask questions via the provided email address. Quick FactsRationale: The introduction of an economy-wide cash payment limit is a recommendation from the Black Economy Taskforce and sends a strong signal to the community that it is not acceptable to avoid tax and other obligations by paying with cash. Start date: 1 January 2020 and for certain AUSTRAC reporting entities from 1 January 2021. What transactions are covered by the cash payment limit? The limit applies to all cash transactions equal to or in excess of $10,000, except for those that meet the conditions specified in the draft Currency (Restrictions on the Use of Cash—Excepted Transactions) Instrument 2019. What are examples of exempt transactions? All cash deposits and withdrawals from your bank account with an authorised deposit-taking institution (ADI), exchanging foreign currency and all consumer to consumer transactions such as selling a second-hand car but excluding real property transactions. Are there any new reporting requirements? This will not impose additional reporting requirements on businesses and consumers. What happens if you break the limit? From 1 January 2020 it will be a criminal offence to make or accept a payment from businesses that includes $10,000 or more of cash. It is also offence to make or accept a cash donation equal to or in excess of $10,000. The maximum penalty is up to two years imprisonment and/or 120 penalty units ($25,200). How does the cash payment limit apply to payment plans? The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time. The total cash payments made towards the final price paid must not equal to or exceed $10,000. The remainder of the payments must be made electronically or by cheque. Email your questions to [email protected]  Single Touch Payroll (STP) has certainly given bookkeepers and their clients a lot to think about, and we all can appreciate that the ATO has taken a measured and considered approach to its implementation. But we all know that this approach was going to change once businesses were given sufficient time to prepare for the STP implementation phase. Going forward the expectation of the ATO will quite rightly shift to an oversight model that acknowledges the complex nature of STP implementation for small business but also assigns appropriate penalties for those who don't comply with the new reporting requirements.
The ATO have informally advised that they aren't looking to directly pursue and impose penalties for small and closely held entities for the next 12 months to allow them time to settle into the new reporting regime. However, ICB strongly recommends that all small businesses are reporting by the current 30th September 2019 deadline. Small and closely held entities not reporting by the current deadline may benefit from an exemption term upon application and thus avoid the risk of attracting penalties, noting that this term will be ending on the 30 June 2021. Concessions for larger employers no longer apply. The ATO penalty documentation now lists that failure to lodge STP reports is a failure to lodge event. A failure to lodge penalty is calculated at a rate of $210 dollars per 28 day interval of lateness or part thereof. This is capped at 5 penalty units. Companies with turnover between $1-20 million will see this penalty multiplied by two ($420). Large companies with turnover in excess of $20 million will see their penalty multiplied by 500 ($105,000). These recent changes to the ATO's penalty documentation are available for your review at the link provided below. The ATO penalty documentation, per the ATO website indicates that each penalty event will result in a $210 penalty assignment, while the cap levels were outlined by Acting Director Amanda Lehmann at a recent ATO presentation. Ms Lehmann noted that only a minute number of letters have been sent to large firms neither lodging or applying for deferral. Clearly it's in everyone's best interests, to ensure STP compliance. If you do need to apply for STP lodgement deferrals, please contact us.  The TPAR informs the ATO about payments that are made to contractors for providing services. Industries required to report TPAR for 2019 are listed in the below table. Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts. The ATO uses this information to identify contractors who haven't met their tax obligations. The Taxable Payments Annual Reporting scheme for contractors applies to the industries as per below:  What Has to be Reported?
A TPAR report requires the business to outline:
ICB feels that most of this information is already captured in the day-to-day bookkeeping processes in the accounting file. It may just mean that clients/bookkeepers need to be more diligent in capturing ABNs for suppliers and flagging those suppliers or employees (if a voluntary agreement is in place) that are reportable and assigning the payments into a separate account on the chart of accounts. Who Can Report? Tax Agents and BAS Agents can advise, prepare, and lodge the Taxable Payments Annual Report. Business owners can also prepare and lodge the report. The bookkeeper can assist the owner to prepare the report but may not lodge the report directly. Reconcile TPAR to Subcontractor's Expense Account Recommend comparing the total value of subcontractor’s expense to the TPAR report. You may find a small difference which may be a result of
Prepare and Lodge TPAR The form must be lodged either electronically or via the ATO paper form.To lodge the Taxable Payments Annual Report using electronic transfer, you need to create an electronic annual report data file using accounting software. Note: You cannot lodge the following media forms: spreadsheets, CD ROM, DVD, USB, floppy or zip disk. Electronic Lodgement Options
TPAR Lodgement Due Date TPAR lodgement date is 28 August each year. Paper FormIf you want to lodge a paper form, you must complete and send the Taxable Payments Annual Report to the ATO. Note: You must use this form; you cannot create your own form. TPAR – Nil Report For the 2019 lodgement year you are required to lodge Nil report if in:
If you need to amend a Taxable Payments Annual Report, please contact us to assist you in the process.  On 30 May 2019 the Fair Work Commission announced that as of the first full pay period in July, the minimum wages in modern awards would increase by 3% (and so would the Federal minimum wage for award-free employees).
But does this mean that employers have to increase the wages of all employees by 3%? The simple answer is no. The minimum rates set out in modern awards are exactly that: minimum rates of pay. If you are already paying above the award then there is generally no obligation to increase wages just because the minimum wage has increased (unless the new minimum wage will now be greater than the rate you are paying). Employers who pay “above the award” rates of pay in order to meet all the entitlements that arise under an award should ensure that the rate of pay is still sufficient to cover all entitlements that might arise under the award (e.g. overtime, allowances, etc.) now that the minimum rates have increased. Employers should also make sure that employment contracts clearly state that the employee's wage or salary covers all entitlements that arise under the award – to avoid an employee being entitled to an above the award rate of pay plus payment for overtime, allowances, etc. Employers covered by an enterprise agreement should remember that the Fair Work Act 2009 states that if the base rate of pay in an enterprise agreement is overtaken by the base rate of pay in a modern award that would otherwise apply to the employee, then the employer must pay the award base rate of pay, rather than the rate stated in the enterprise agreement. NB this obligation to match the award rate only arises in relation to base rates of pay. There is no obligation for the overtime or penalty rates in an enterprise agreement to “keep up” with the award rate of pay (unless the enterprise agreement has specifically provided for this). National Minimum Wage IncreaseThe Fair Work Commission has handed down its decision to increase the national minimum adult wage by 3%. This increase will be applicable from the first full pay period commencing on or after 1 July 2019. The new adult National Minimum Wage will be $740.80 per week or $19.49 per hour. This constitutes an increase of $21.60 per week to the weekly rate. No changes take effect until the first full pay period on or after 1 July 2019. However, all employers should refer to the appropriate awards covering their employees. To find out what is required to update your software, please call us.  Superannuation
Compliance New legislation to amend laws relating to Super and PAYG withholding compliance have become effective from 1st April 2019:
Employment Termination Payment Cap (ETP) Employment termination payment (ETP) is a lump sum payment rather than a wage payment made as a result of termination. From 1st July 2019 the ETP cap threshold for taxing the lump sum payment for both life and death benefits will increase to $210,000 and the Whole of income cap remains at $180,000 Redundancy Threshold (Lump Sum D) From 1st July 2019 redundancy tax free threshold Increases to $10,638 + $5,320 for each year of service Tax Rates PAYG Withholding Tables Legislation for changes to income tax thresholds including following offsets:
New low- and middle-income tax offsets apply for 2018–19 through and including years to 2021–2022 Australian resident employees (and certain trustees) that do not exceed a taxable income of $125,333 are entitled to the new low and middle tax offset. This is in addition to the existing low-income tax offset. It is calculated during the preparation of an income tax return. Calculated as follows. If taxable income:
A new set of repayment thresholds for 2019/2020 From 1 July 2019, the new minimum HELP repayment threshold will be when taxable income is $45,881 or above, with a 1% repayment rate, with a further 17 thresholds and repayment rates, up to a top threshold of $134,573 at which 10% of income is repayable. Source: Department of Education and Training
New South Wales payroll tax threshold to increase on 01 July 2019 to $900,000 annually.
The current motor vehicle GST limit is $57,581 (GST $5,234). No changes advised at this time. Living Away from Home Allowance (LAFHA) 2020 Living Away from Home Allowance (LAFHA) is an allowance to compensate an employee who is required to live away from their usual place of residence to do their job. This allowance compensates their additional non-deductible expenses. The LAFHA allowance will increase for 2019/2020 financial year for reasonable food and drink within Australia. Children are those aged under 12 at the beginning of the year. Australian and Overseas LAFHA figures are available on the ATO website Instant Asset Write off The instant asset write off for income tax purposes has been extended to 30th June 2020 and now includes businesses up to $50 million turnover. The threshold that can be claimed is: All business up to $50 million turnover:
 There are caps on the amount you can contribute to your super each financial year to be taxed at lower rates. If you contribute over these caps, you may have to pay extra tax. The cap amount and how much extra tax you have to pay may depend on your age, which financial year your contributions relate to, and whether the contributions are:
Concessional contributions cap Concessional contributions include:
 Excess concessional contributions from 2013–14 onwards are included as taxable income, taxed at the marginal tax rate plus an excess concessional contributions charge. For 2012–13 and earlier years, excess concessional contributions were taxed at 46.5% (15% levied in the super fund, with an additional 31.5% payable). Unused concessional cap carry forward From 1 July 2018 if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts. The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year. Unused amounts are available for a maximum of five years, and after this period will expire.  Note: This Table assumes no indexing of general cap.
General concessional contributions cap From 1 July 2017 the general concessional contributions cap is $25,000 and is indexed in line with average weekly ordinary time earnings (AWOTE), in increments of $2,500 (rounded down). From the 2017–18 financial year, the general concessional contributions cap is not calculated based on age. The thresholds currently sit at $25,000 for all age levels, but it important to remember that the current threshold have only been in place in recent times. Please also remember to review your unused concessional cap carry forward thresholds.  For employers
What do I need to do? Single Touch Payroll reporting will take effect from 1 July 2019. All necessary payroll information, such as wages & salaries, (PAYG) withholding and super information, will be reported to the ATO when you pay your employees. If you have existing payroll or accounting software, it should offer updated ‘Single Touch Payroll’ reporting. However, if it’s not an option speak to your software provider or Boox for when their product will be ready. What does it mean?
What you need to do
For employees Single Touch Payroll (STP) is a tax and super information reporting change that all employers must adhere to by 1 July 2019. The new ‘real-time’ reporting method via STP will send employee tax and super information direct to the ATO each time you are paid. This change will have little effect on employees directly. However, there are a few changes to be aware of. What does this mean for you? Year-to-date tax and super information will be available to you through myGov.
Payment summaries will be available in myGov
You can check if your super has been paid.
Boox the Bookkeeping Experts are specialists in all bookkeeping fields and are available to help you understand and implement these changes. Contact us to help you make the transition.  What This Resource is AboutWhen ATO officers are reviewing claims for home office running expenses and electronic device expenses, there is a need to establish that expenditure has been incurred, and the extent of deductibility. This summary of the ATO practice statement concerns acceptable verification approaches for:
In effect, a taxpayer can claim a deduction for the ‘additional’ expenses they incur, because they can establish that they incur these additional expenses as a result of their income-producing activities. Heating, cooling and lighting expenses are only available where the taxpayer exclusively uses these services while they work from home. This means, for example, that a taxpayer working on their laptop whilst sitting on their couch next to their partner who is watching TV will have no additional expenditure on heating, cooling or lighting, but they may have some computer, phone or internet expenses which are work related. Evidencing Expenditure (Incurred)Invoices in the name of the home owner or service recipient represent evidence that an expense has been incurred. An expense in the name of one person can be apportioned to others where the circumstances are relevant. For example, this can include family circumstances such as a husband and wife, or where two unrelated parties share accommodation and both contribute to the cost of expenses jointly. Where invoices are not available, corroborating evidence may be accepted to demonstrate the expense has been incurred. The level of evidence required to establish that an expense has been incurred is less than that required to substantiate the expense. This means bank and credit card statements may be acceptable to establish that a taxpayer has incurred an expense. For example, a bank statement in the taxpayer's name clearly showing a payment to a gas provider will be acceptable evidence to establish that a gas expense has been incurred. Extent of DeductibilityEvidence is required to demonstrate how the taxpayer has calculated their deduction based on a proportion of the total expense incurred. In apportioning the expense, taxpayers need to factor in the extent to which:
Taxpayers can prove their deductible (work) use proportion by:
Special Rules for Home Office Running ExpensesTaxpayers can calculate their home office running expenses by:
This method incorporates all of the items that a taxpayer can claim as a home office running expense including lighting, heating, cooling, cleaning costs, and decline in value of home office items such as furniture and furnishings in the area used for work. Example 1: home office running expensesBetty is an employee accountant working for a city-based firm that expects her to complete a specified amount of work each day. In order to achieve this, Betty has elected to take some of her work home at night so that she can spend more time with her family. Betty spends an average of two hours per night Monday to Friday working in her home office. Betty has two options for calculating her home office running expenses. She can calculate the proportion of actual home office running expenses that are work-related or use the rate of 52 cents per hour. Betty opts to use the rate of 52 cents per hour and keeps a record showing she worked at home for 10 hours per week for 48 weeks in the year. Her deduction is calculated as: ItemCalculationDeduction Amount Running expenses52c per hour for 10 hours per week for 48 weeks$249.60 Special Rules for Device Usage ExpensesTaxpayers can calculate their device usage expenses by:
Considering Ben's usage is more than incidental he decides to calculate his actual expenses incurred using the ‘time basis’ method. Ben has determined his time using the internet for work over a representative four-week period as 96 hours (24 hours per week). However, to determine his time using the internet for non-work purposes Ben considers all of the private devices that use the internet connection. This includes his:
Ben's deduction is calculated as: ItemCalculationDeduction Amount Internet expenses40% of monthly expenses ($60) for 11 months (taking into account Ben's four weeks annual leave)$264.00 Example 3: internet expenses – apportion for other usersFollowing on from Example 2, assume Ben's wife also uses the internet connection for a similar period of time – that is, 144 hours over a representative four-week period. In this situation, the internet connection is used for a total of 384 hours in a four-week period, of which 96 hours, or 25%, is Ben's work-related portion. Ben's deduction is calculated as: ItemCalculationDeduction Amount Internet expenses25% of monthly expenses ($60) for 11 months (taking into account Ben's four weeks annual leave)$165.00 Apportioning Bundled ExpensesTelephony, internet and related services products are often combined into one product, being ‘bundled’ in various ways. Taxpayers may use such components in different ways, for example, private use for one component but work-related use for another. Accordingly, the cost of ‘bundled’ services may need to be apportioned discretely. Cost components can include elements such as internet or voice service, device purchase cost, or other periodic or specific services or purchases. In order to appropriately match work-related use to particular costs, an apportion¬ment of the cost of any bundled components can be separated as follows:
 Fair Work best practice guides aim to help small businesses and employees with a range of workplace issues. By adopting best practice initiatives, employers and employees can achieve happier, fairer and more productive workplaces.
Each guide has a checklist to help achieve best practice. In this edition, we feature the best practice guide on Work and Family. Working at best practiceBest practice employers foster flexibility to achieve a better balance between work and family responsibilities for all employees. From reduced absenteeism to improved productivity and job satisfaction, there are significant benefits for employees and employers in providing flexibilities for work and family balance. Work and family flexibilities ensure employers and employees balance work and family commitments by using employment arrangements that help employees manage family and lifestyle commitments while taking into account business needs. The benefits of work and family flexibilities can be achieved in all workplaces, regardless of the size of the business, by developing and implementing family-friendly workplace policies. This best practice guide explains:
This guide illustrates best practice when it comes to achieving family-friendly workplaces. Click here to access the guide. |
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