Single Touch Payroll exemptions
Single Touch Payroll has now been legislated to apply to all employers from July 2019. So from 1st July, 2019, all employers must notify the Tax Office of every employees gross pay, tax and super at the time of payment.
Some exemptions and deferrals have been granted.
However, you shouldn’t need them. The main accounting software products offer Single Touch Payroll solutions. Furthermore, there is much preparatory work for which you will need to change and or improve your processes. It is not something bets left to deal with later.
Keep an eye out for future educational and preparatory steps.
STP – now law!
Single Touch Payroll has now been legislated for all employers. From July 2019, even the smallest of employers will have to report wage payments (inc super) to the ATO at the time of payment.
Whilst there will be some extensions, the time to start planning and preparing is now. We can help you with this.
Objecting against a Land Tax assessment
Objecting against a Land Tax assessments with the State Revenue Office issuing their 2019 assessments has become a hot topic of discussion. Many have fallen off their chair (and some unable to get back up) after reading that their 2019bill would increase by 40% or more.
What is Land Tax?
Land Tax is a state tax levied on land value. One’s principal residence (home) and farms are exempt, otherwise the land value is taxed under a progressive tax scale. The first $250,000 is tax free (although that threshold is only $25,000 for trusts). A higher rate applies to vacant holdings.
It is assessed against the registered hold of the land at 31st December. So notices are now being issued for the 2019 year based on who held the land at 31st December 2018. Adjustments are made upon settlement to apportion part of the bill to the new owner.
How is the land value calculated?
The State Revenue Office uses local council valuations of the land value. The State Revenue Office adopts new values every two years.
Why such big jumps in values?
Local council assessments of land values have largely jumped across the board. This can have a disproportionate effect as holding values pass through a progressive rates of 0.5%, 0.8%, 1.3% and even 2.25%.
Can you object?
Yes you can.
How do you object against a Land Tax assessment?
You must do so within 60 days of receiving the assessment. You do so by using a prescribed objection form.
Even if you object, you must still pay the assessed tax by the due date. If you objection is successful you will be refunded the excess portion of the assessment with interest.
What do you need to object?
You need a reasonable basis. To begin with, we suggest speaking to your real estate agent (that said, we would expect though that the State Revenue Office would not accept a real estate agent’s valuation). If the value appears to be excessive, we contend that you will require a valuation from a property valuer.
Implications for commercial and residential property owners
If you are a commercial landlord, you can continue to pass the Land Tax outgoing on to your tenant. If you are the tenant, your outgoings are going to go up.
If you are a residential property owner, you will not be able to on charge the Land Tax to your tenant. It may well be that a lot of large blocks come on to the market or are sub divided.
We welcome the opportunity to discuss your situation and options with you
and to assist you with preparing an objection.
National Employment Standards
It is a compulsory requirement to have issued all employees with the Fair Work Information Statement
That Statement includes the National Employment Standards.
You can access that document at:-
https://www.fairwork.gov.au/employee-entitlements/national-employment-standards
And please remember to:-
- Keep evidential records that you have given the statement to each employee, and
- Give one to yourself!
Loan rejections are on the rise
It has been reported that loan rejections are on the rise. This particularly so for loan renewals where the reported rejection rate jumped to 48% during December.
In fact, we have even heard to pre-approval loans being subsequently withdrawn.
This could prove to be a self feeding phenomenon as some have forecast Melbourne house prices to fall by another 11% through 2019.
What should you do?
- If you are due to renew a loan – start early and tighten up your application.
- If you are seeking a loan, source out alternative solutions. This is where a mortgage broker can prove invaluable. We would be happy to provide a referral.
Family & domestic violence leave
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
https://www.fairwork.gov.au/employee-entitlements/national-employment-standards
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.
Employment – ATO & unpaid super
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.
Australian now living overseas – beware!
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?
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 – get paid quicker
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.