Question:
More businesses collapse as ATO applies the pressure
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 the three months to 30 September, creditor-initiated Court liquidations were up by nearly 34% and receivership appointments up by 13%. Very high numbers of director-initiated corporate insolvencies were also the result of pressure from the ATO or the banks.
Appointments of receivers were also substantially higher – by as much as 52% in WA.
The continuing malaise in the Australian economy following the Global Financial Crisis and unrelenting pressure from the ATO and banks is resulting in the failure of many businesses throughout the country.
There are incipient signs of improving conditions. These include:
- The RBA interest rate cut of 0.25%;
- A 6.3% increase in the Westpac consumer sentiment survey;
- A 2.2% increase in commitments for owner occupied housing; and
- Small, seasonally adjusted, increases in retail sales during July, August and September.
These are small shoots which will need lots of care and watering. We can but hope that state and Federal Governments and the RBA are up to the task!
