Newsletter - August 2021
Cents & Sensibility | Tax News | Views | Clues
Personal Property Securities Register – Holly Laidlaw
What is the Personal Property Securities Register (PPSR)?
The PPSR is the official government index designed to protect the legal rights of asset owners. Personal property can include cars, company assets, boats, used goods and intellectual property, but not buildings or land.
Purchasers can search the PPSR to confirm that the item they are buying isn’t stolen, is debt free and has no other competing security interests.
Why Register on the PPSR?
- Registering your security interest correctly on the PPSR can protect you and give you extra rights which is important if the person you are buying from or selling to becomes insolvent.
- It gives you more legal protection - A written agreement may not be enough to protect you.
- It helps you get your goods back and gives you priority - If you don’t register on the PPSR and your customer becomes insolvent before they have fully paid you, the property will be lost, and the insolvency practitioner may sell your goods for the benefit of all creditors.
If you don’t register, anyone else who has registered a security interest on the PPSR could be ahead of you in the queue to get their goods or money back if your customer becomes insolvent.
- It means the insolvency practitioner can find you - The insolvency practitioner will search the PPSR to find the secured creditors. If you’ve registered a security interest on the PPSR, the insolvency practitioner will be able to include you on the priority list for repayment. So, it’s important to keep your contact details up to date.
Withholding Employee Payments – Jaimie Ruberto
As an employer, are you meeting all your ATO obligations for withholding payments?
If you operate a business. employing people, it is likely that sometimes you will withhold amounts from payments to employees and provide these details to the ATO.
Employee Payments Requiring Amounts to be Withheld
First, employees must complete a Tax file number declaration. In some cases, they may also need to complete a Withholding declaration. (Link found HERE)
These declarations assist in determining the amount of tax to withhold by indicating whether other factors need to be considered, such as if the employee:
- Is under 18 years old
- Has study and training support loans such as Higher Education Loan Program (HELP), Trade Support Loan (TSL) or Financial Supplement debts
- Is claiming tax offsets.
Other payments to withhold are:
- Allowances (motor vehicle, travel, telephone)
- Long service leaves and holiday pay
- Repayments of an overpayments
- Payments when an employee resigns
- Back payments, commissions, bonuses, tips, and similar payments (please see explanations below)
Back Payments (Including Lump Sums in Arrears)
A back payment is a payment that was meant to have been made in a prior period. For example:
- Your employee’s wages were underpaid due to error or oversight
- An allowance you were due to pay in July was overlooked and payment was made in December.
If you normally process payments in a pay period later than when the work is performed, such as overtime payments paid with a time lag of one pay period, they are not considered back payments. These payments are treated as part of the normal pay cycle when paid and withholding is calculated on total earnings for that period. An overtime payment is only considered a back payment if it was meant to have been made in a prior pay period.
Commissions are typically made as recognition of performance or service and may be calculated as a percentage of the proceeds from a particular transaction or series of transactions.
Bonuses, Tips and Similar Payments
A bonus is usually made to an employee in recognition of performance or services and may be calculated as a percentage of the proceeds from a business transaction. These payments may not necessarily be related to a period of work.
Other one-off payments that do not relate to work performed in a particular period include:
- A once-only payment made to a payee as compensation for a changed work location
- An amount paid as a sign-on bonus to a payee entering a workplace agreement
- Any lump sum allowances
If you have any concerns that your business is not correctly withholding payments made to their employees, please do not hesitate to contact your knp Team Member. We can provide a complete review of your payroll payments and withholding to ensure you are meeting all your ATO obligations.
Reminder of superannuation caps indexation for 2022
From 1 July 2021, the superannuation contributions caps have been indexed for the 2022 income year.
The new concessional contributions cap for the 2022 financial year is now $27,500 (increased from $25,000).
The new non-concessional (i.e., non-deductible) contributions cap for the 2022 financial year is now $110,000 or (where the ‘bring forward’ rules are applicable) $330,000 over three years (increased from $100,000 or $300,000 respectively).
The CGT cap amount for the 2022 financial year is now $1,615,000 (increased from $1,565,000).
Editor: The increase in the concessional contributions cap in particular will require those salary sacrificing additional superannuation to consider if they wish to increase their packaging arrangements so as to maximise the $2,500 increase in the cap.
Ref: ATO website, Key superannuation rates and thresholds: contributions caps, updated 6 July 2021
Division 7A benchmark interest rate for 2022 remains unchanged
The Division 7A benchmark interest rate for the 2022 income year remains unchanged from the 2021 rate of 4.52%.
Ref: ATO website, Division 7A benchmark interest rate, 6 July 2021
Changes to STP reporting from 1 July 2021
Employers should have already been reporting through Single Touch Payroll (‘STP’) unless they only have closely held payees, or they are covered by a deferral or exemption.
From 1 July 2021, there have been changes to STP reporting for small employers with closely held payees and quarterly reporting for micro employers.
More specifically, for employers with closely held payees, employers must now report amounts paid to their closely held payees through STP.
They can choose to report such payments via one of three methods, being:
- actual payments each pay day.
- actual payments quarterly; or
- a reasonable estimate quarterly.
For micro employers reporting quarterly, the STP quarterly reporting concession is only available to micro employers who meet certain eligibility requirements (which now include the need for exceptional circumstances to exist).
Ref: ATO website, Changes to STP reporting from 1 July, 16 July 2021
The Olympics have arrived! Like many of you, the knp team have been getting into the Olympic spirit. Staying socially connected whilst working from home has been so important over the past 18 months. To celebrate the Olympics, we held a virtual Olympics opening ceremony with a medal sweep held.