Newsletter - March 2021

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Cents & Sensibility | Tax News | Views | Clues 

 

29 March

Fringe Benefits Tax (FBT) Update – Rebecca Chan

 

With the end of the 2021 fringe benefits tax (FBT) year upon us, if you, as an employer, provided fringe benefits to your employees or their associates between 1 April 2020 to 31 March 2021, you may incur FBT and be required to lodge an FBT return. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.

 

A fringe benefit can include a benefit by way of a payment, reimbursement, or provision of property. Common fringe benefits include the provision of motor vehicles, entertainment by way of food, drinks or recreation and certain reimbursements.

 

Due to the impacts of the COVID-19 pandemic, many employers transitioned to working from home (WFH) arrangements during the 2021 FBT year with the provision of electronic devices and other office equipment to their employees. Although the provision of these items may be exempt, the circumstances around their provision need to be considered on a case-by- case basis for FBT exposure.

 

Where we have identified FBT implications for you or your business, we will forward an FBT pack to you for completion and to request the relevant information for the preparation of an FBT return where necessary.

Changes to STP reporting concessions from 1 July 2021

 

Small employers (19 or fewer employees) are currently exempt from reporting ‘closely held’ payees through Single Touch Payroll ('STP'). Also, a quarterly STP reporting option applies to micro employers (four or fewer employees). These concessions will end on 30 June 2021.

 

The STP reporting changes that apply for these employers from 1 July 2021 are outlined below.

 

Closely held payees (small employers)
From 1 July 2021, small employers must report payments made to closely held payees through STP using any of the options below. Other employees must continue to be reported by each pay day.

 

A ‘closely held payee’ is an individual who is directly related to the entity from which they receive payments. For example, this could include family members of a family business, directors or shareholders of a company and beneficiaries of a trust.

 

Payments to such payees can be reported via STP (from 1 July 2021) using any of the following options:

  1. Report actual payments on or before the date of payment.
  2. Report actual payments quarterly on or before the due date for the employer’s quarterly activity statements.
  3. Report a reasonable estimate quarterly on or before the due date for the employer’s quarterly activity statements. Note that consequences may apply for employers that under-estimate amounts reported for closely held payees.

 

Small employers with only closely held payees have up until the due date of the payee’s tax return to make a finalisation declaration. Employers will need to speak with these payees about when their individual income tax return is due.

 

Micro employers
From 1 July 2021, the quarterly reporting concession will only be considered for eligible micro employers experiencing ‘exceptional circumstances.’

 

Common examples of when the ATO would generally consider it to be fair and reasonable to grant a deferral due to exceptional or unforeseen circumstances include natural disasters, other disasters or events, serious illness, or death.

 

Additionally, ‘exceptional circumstances’ for access to the STP quarterly reporting concession from 1 July 2021 may include where a micro employer has:

  • seasonal or intermittent workers; or
  • no or unreliable internet connection.

 

The ATO says it will consider any other unique circumstances on a case-by-case basis.
It should be noted that registered agents must apply for this concession and lodge STP reports, quarterly, on behalf of their eligible micro employer clients.

 

The STP reports are due the same day as the employer’s quarterly activity statements.
If an employer prefers to report monthly, the STP reports must be lodged on or before the 21st day of the following month.

 

Finalisation declarations will need to be submitted by 14 July each year.

 

Editor: Please contact our office if you require more information or assistance with these STP reporting options.

Super Contribution Caps Set to Increase – Ali Roshan

  

New concessional and non-concessional contribution caps are set to increase for the 2021/2022 financial year.
These are outlined below.

 

Concessional cap (2021-22)

 

$27,500 pa

 

Non-concessional cap (2021-22)

 

$110,000 pa

 

Maximum contribution under bring-forward rule

 

$330,000

  

Currently, if your total super balance is $1.6m, you would not be eligible to make further non-concessional contributions. However, the non-concessional cap limit is increasing due to indexation of the transfer balance cap to $1.7m. Therefore, going forward once your total super balance on 30 June 2021 is $1.7m then from 1 July 2021 you will no longer be eligible to make a non-concessional contribution.

 

If you would like our assistance with this, please do not hesitate to contact our office.

 

Ali Roshan is an Authorised Representative (ASIC No. 000378611) of Lifespan Financial Planning
ABN 23 005 921 735 AFSL Number 229892

 

No Advice Warning / General Advice 

 

The purpose of this article is to provide general information only and the contents of this website do not purport to provide personal financial advice. knp Solutions strongly recommends that investors consult a financial adviser prior to making any investment decision.

 

The contents of this knp Solutions article does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions.

 

The information is selective and may not be complete or accurate for your purposes and should not be construed as a recommendation to invest in any particular product, investment, or security. The information provided on this website is given in good faith and is believed to be accurate at the time of compilation.

Super Contribution Caps Set to Increase – Ali Roshan

  

New concessional and non-concessional contribution caps are set to increase for the 2021/2022 financial year.
These are outlined below.

 

Concessional cap (2021-22)

 

$27,500 pa

 

Non-concessional cap (2021-22)

 

$110,000 pa

 

Maximum contribution under

bring-forward rule

 

$330,000

 

Currently, if your total super balance is $1.6m, you would not be eligible to make further non-concessional contributions. However, the non-concessional cap limit is increasing due to indexation of the transfer balance cap to $1.7m. Therefore, going forward once your total super balance on 30 June 2021 is $1.7m then from 1 July 2021 you will no longer be eligible to make a non-concessional contribution.

 

If you would like our assistance with this, please do not hesitate to contact our office.

 

Ali Roshan is an Authorised Representative (ASIC No. 000378611) of Lifespan Financial Planning
ABN 23 005 921 735 AFSL Number 229892

 

No Advice Warning / General Advice 

 

The purpose of this article is to provide general information only and the contents of this website do not purport to provide personal financial advice. knp Solutions strongly recommends that investors consult a financial adviser prior to making any investment decision.

 

The contents of this knp Solutions article does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions.

 

The information is selective and may not be complete or accurate for your purposes and should not be construed as a recommendation to invest in any particular product, investment, or security. The information provided on this website is given in good faith and is believed to be accurate at the time of compilation.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.‚Äč