Business Tax

The NSW Government’s Economic Recovery Strategy includes funding to stimulate economic activity in cities and regions with a strong focus on rebuilding and supporting businesses, helping the hip pocket and boosting jobs.

The Premier and Treasurer also revealed that as part of the package, households of school-aged children in 2021, will receive $250 in vouchers to stimulate spending and economic activity in early 2022.

The NSW Government’s Economic Recovery Strategy includes:

• $500 million to restore consumer and business confidence, including the expansion of Dine & Discover and Stay & Rediscover accommodation vouchers;
• $250 million to support jobs and skills, including help for job seekers to retrain or upskill;
• $212.2 million to boost vital sectors, including additional funding for the performing arts
sector, an Alfresco Restart Package, and support to bring cities back to life;
• $200 million to boost regional NSW, including  support for events, facilities and local
infrastructure, and housing; and
• $75 million to boost communities across the state, including support for tourism, events,
sport and recreation.

New workplace determinations and enterprise agreements made on or after 1 January 2021 must offer employees the right to choose the superannuation fund to which you pay their compulsory superannuation contributions.

Once a new determination or agreement is in place, your organisation must offer choice of superannuation fund to existing employees who request to choose their superannuation fund and all new employees.

From 1 November 2021, if you have new employees start, you may have an extra step to take to comply with choice of fund rules if they do not choose a superannuation fund. You may now need to request their ‘stapled superannuation fund’ details from the ATO, and, if the employee has one, pay superannuation to that fund.

As an employer, you must select a default nominated superannuation fund that you will pay your employee’s superannuation into if they haven’t chosen a fund and do not have a stapled superannuation fund.

The ATO has released information about how they rate the effectiveness of your Top 500 group’s tax
governance and what you can expect when you engage with them.

The ATO information can be found on the ATO website under How we assess tax governance for the Top 500 privately owned groups. The ATO has seven principles of tax effective governance including: accountable management and oversight, recognise tax risks, seek advice, integrity in reporting, professional and productive working relationship, timely lodgments and payments, and ethical and responsible behaviour.

Over the coming weeks, the ATO be writing to businesses that have outstanding activity statements from March to September 2020.

It is important that your clients bring their lodgments up to date, so they receive any cash flow boost credits they are entitled to.

Single Touch Payroll (STP), also known as STP Phase 2, is expanding from 1 January 2022.

While the mandatory start date is 1 January 2022, the ATO’s approach to STP Phase 2 will be flexible,
reasonable and pragmatic.

If the payroll solution you use is ready by 1 January 2022, you should start Phase 2 reporting if you can.
However, you’ll be considered to be reporting on time if you start Phase 2 before 1 March 2022. You will not need to apply for more time.

If your digital service provider needs more time to update their solutions to offer STP Phase 2 reporting, they can apply for a deferral which will cover you. Your provider will let you know if they have a deferral. Again, you will not need to apply for more time.

The Treasurer, the Hon Josh Frydenberg MP, has announced that the temporary COVID-19 Disaster Payment will begin to transition once a State or Territory reaches 70% full vaccination of its population (16 years and older) in line with the movement into Phase B of the National Plan agreed to at National Cabinet.

Once a State or Territory reaches 70% full vaccination, the automatic renewal of the temporary payment will end, and individuals will have to reapply each week that a Commonwealth Hotspot remains in place to confirm their eligibility.

Tax does not need to be paid on some COVID-19 payments from the Government to support businesses. These payments will be non-assessable non-exempt (NANE) income for tax purposes if
they are received under an eligible grant or support program and the eligibility criteria are met.

A list of NSW eligible grants and support programs that may not be taxed (if you meet the eligibility
criteria) is:

• 2021 COVID-19 business grant
• 2021 COVID-19 JobSaver payment
• 2021 COVID-19 micro-business grant
• NSW Performing Arts COVID Support Package.

The ATO has noticed some errors with claims for the loss carry back (LCB) refundable tax offset.

To prevent errors and ensure your LCB claim is processed as quickly as possible, it is essential that you accurately complete all of the required LCB labels.

In your company tax return, this includes:

• the LCB labels in item 13
• the opening and closing franking account balance labels in item 8
• the Refundable tax offsets label (Label E) in the calculation statement, where you add the LCB tax offset amount from label 13S (if you don’t complete this label you won’t receive any refund owing from your LCB claim).

The ATO has released Tax Determination TD 2021/8 on the values that will be accepted of taking goods for own use.

Some values include $4,640 for licensed restaurants and cafes (the highest) and $920 for butchers (the lowest).

The fourth claim period for JobMaker Hiring Credit payments is now open.

If your business is eligible:

• Register – use ATO online services, Online services for business or a registered tax or BAS agent;
• Nominate your additional eligible employees – run payroll events through your Single Touch Payroll-enabled software;
• Claim – use ATO online services, Online services for business, or a registered tax or BAS agent. Eligible businesses can claim the JobMaker Hiring Credit for up to a year for each additional eligible employee hired between 7 October 2020 and 6 October 2021. More information can be found here.

The High Court has rejected the taxpayer’s special leave application to appeal the decision of the Full Federal Court in Mussalli v Commissioner of Taxation [2021] FCAFC 71. In that case, the Full Federal Court found that payments described as ‘prepaid rent’ by a McDonald’s franchisee were capital in nature and therefore not deductible.

The case has previously covered in Tax tips, traps and updates.