Super guarantee amnesty ends on 7 September 2020
The SG Amnesty provides a one-off amnesty for employers to make a voluntary disclosure of unpaid superannuation contributions relating to the period from 1 July 1992 to 31 March 2018.
The introduction of the Amnesty combined with the implementation of Single Touch Payroll (STP) provides a strong incentive for employers to voluntary disclose unpaid super contributions. Under STP reporting, the ATO has access to near real-time payroll data to assess employers' compliance with SG obligations and will no doubt use this information to take action against employers who are not complying with their obligations.
The Amnesty only applies to underpayments that have not been previously disclosed to the ATO and were made before any notification of an audit or review having commenced.
The ATO must receive the application by 11.59pm on 7 September 2020.
Access to lower company tax rate
The tax rate for businesses structured as companies with turnovers of less than $50M has decreased to 26% (down from 27.5%) from 1 July 2020 and will further decrease to 25% from 1 July 2021.
This lower tax rate applies for companies with aggregated turnover of up to $50 million, as long as they satisfy the “passive income test” – i.e. where rent, interest, dividend income, royalties and capital gains are 80% or less of the company’s total income.
Changes to genuine redundancy payments
Genuine redundancy and early retirement scheme payments are tax free up to a limit based on the employee's years of service. The rules around these payments have changed.
The age at which employees can access concessional tax treatment for genuine redundancy and early retirement scheme payments has been extended from the age-based limit of 65 years to age-pension age.
The change applies to employee termination payments (ETPs) made to employees who were dismissed or retired on or after 1 July 2019.
Claiming tax deductions for business travel expenses
As a business owner, the general rule is that you can claim deductions for expenses if you or your employees are travelling for business purposes. A travel diary is:
- compulsory for sole traders and partners in a partnership for domestic and overseas travel of 6 nights or more in a row.
- highly recommended for companies and trusts.
The ATO on its website has details of expenses you can claim (e.g. airfares), expenses you can’t claim (e.g. souvenirs), how expenses may be claimed (e.g. travel allowances), when travel diaries must be kept and what records must be kept.
Paying reasonable travel allowances to employees
The ATO has issued Tax Determination TD 2020/5 which sets out the reasonable allowances for the 2020/21 year for meals, domestic and overseas travel paid to employees, company directors or office holders.
The reasonable allowance for overtime meals is $31.95, while the reasonable allowances for domestic and overseas travel is set out in various tables in the Determination.
Where the amount paid falls within the relevant reasonable allowance, the person is not required to substantiate the expenses. However, the ATO still requires some written records be kept to show the allowance was expended.
Note any expenditure on accommodation overseas must be fully substantiated.
FBT taxi travel expenses exemption
Any benefit arising from taxi travel by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee's place of work.
In addition to licenced taxi travel, the exemption from 1 April 2019 has been extended to travel provided to employees in vehicles involving the transport of passengers for a fare (other than in a limousine), such as ride-sourcing travel (e.g. Uber).
A benefit arising from taxi travel by an employee is also an exempt benefit if both of the following apply:
- the travel is a result of sickness of, or injury to, the employee
- the whole or a part of the journey is directly between any of the following
- the employee's place of work
- the employee's place of residence
- any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.
Claiming a tax deduction for personal super contributions
The tax rules require taxpayers to give a notice of intent to claim a deduction to their super fund on or before whichever of the following days occurs earliest:
- the day the taxpayer lodges their tax return for the year in which the contributions were made.
- the last day of the income year after the income year in which the contributions were made.
The taxpayer must also receive an acknowledgment from their super fund.
Failure to comply with these eligibility rules may result in the tax deduction being disallowed upon a review by the ATO.
