Question:
Board of Taxation report on reducing red tape
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
In January, the Board of Taxation released its report on removing taxation impediments to the success and growth of small business. This had been provided to the Government in August 2014 and the Government’s responses were attached.
Those which were favoured by the Government and are in process included:
- Provision of guidance to applicants for an ABN as to how to show that they are intending to carry on a business and therefore eligible for an ABN.
- That the Tax Office review its employee contractor tool enabling business people to make the right decision.
- That the Tax Office should keep working on its online decision tool to help people understand the Personal Services Income (PSI) rules.
- The PSI decision tool should clarify what the result means and should provide some safe harbour protection.
- That the quarterly reporting obligations for small business should be simplified.
The Government has indicated that the following recommendations would be considered during preparation of the Tax White Paper.
- That the “minor and infrequent” FBT threshold be increased from $300 to $500.
- That the FBT year which currently ends on 31 March should be aligned with the income tax year.
- That the small business entity annual turnover threshold be increased to at least $3m and that the feasibility of an increase to $5m be investigated.
The Government has announced that the following recommendations will be implemented from 1 July 2016.
- That the superannuation guarantee charge be calculated on the basis of Ordinary Time Earnings (OTE) rather than salary and wages.
- That the superannuation guarantee (SG) Charge be simplified and the severity be reduced.
The following recommendations were not supported by the Government:
- That the SG Charge and any employer contributions used to offset the SG Charge should be tax deductible.
- That superannuation obligations be assessed against a quarterly threshold of $1,350 as an alternative to the current monthly threshold of $450.
WTB 2015/58
Andrew and Tony Lovett
11 February 2015
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