Your November business tax roundup: What you need to know

Paul T_headshot_etched_webBy Paul Trimble, Director, Westlawn Business Services
19 November 2014

In our November tax roundup, we review some recent changes and rulings that could affect you in relation to your business. In particular, we look at the revised Superannuation Guarantee rates, preparing for SuperStream, FBT obligations, GST credits and personal services income.

Revised Superannuation Guarantee rates

Following the repeal of the Mining Tax in September this year, the scaled increase in the superannuation guarantee (SG) rate will increase to 9.5% from 1 July 2014, pause at this rate until 30 June 2020, and then rise by 0.5% annually reaching 12% in the 2025-26 income year.

Year Superannuation Guarantee
rate %
From 1 July 2013 9.25
From 1 July 2014 9.50
From 1 July 2015 9.50
From 1 July 2016 9.50
From 1 July 2017 9.50
From 1 July 2018 9.50
From 1 July 2019 9.50
From 1 July 2020 9.50
From 1 July 2021 10.00
From 1 July 2022 10.50
From 1 July 2023 11.00
From 1 July 2024 11.50
From 1 July 2025 12.00

Now time to prepare for SuperStream

If you’re an employer, you need to start preparing for SuperStream now. Your start date will depend on how many employees you have. SuperStream is a new data and payment standard with a set of minimum conditions for the transmission of data and payment information from employers to super funds.

It started on 1 July 2014 with larger employers (20 or more employees) having to implement the new standard by 30 June 2015. Smaller employers (19 or less employees) will have to implement the new standard between 1 July 2015 and 30 June 2016 (unless they want to start to apply it earlier).

You can find more information on Super Stream on the ATO website.

Do you have an FBT lodgement obligation?

If your business is liable to pay FBT for the FBT year or has paid FBT instalments for the year, you will need to ensure you lodge an FBT return for your business. However, if the fringe benefits taxable amount during an FBT year is nil, you will need to lodge a ‘Notice of Non-lodgement’.

Tax tip
Your accountant will be able to tell you what your business’ FBT obligations are. The FBT year runs from 1 April to 31 March, so there is plenty of time to work out your obligations for the 2015 FBT year.

Decision Impact Statement – GST credits

The ATO has published a Decision Impact Statement in relation to the AAT’s decision in North Sydney Developments Pty Ltd and FCT [2014] AATA 363; 2014 ATC 10-365.

The case concerned a taxpayer’s entitlement to input tax credits for acquisitions made more than 4 years previously in the context of a development business operated by the taxpayer. Also concerned was whether adequate notice was given within the 4 year period, and the effect of a lodgement and payment notice issued to the taxpayer.

The AAT found for the taxpayer on the question of adequate notice, finding that the taxpayer’s letter to the Commissioner satisfied the ‘notification’ requirement in the relevant provisions of the Taxation Administration Act 1953. The ATO accepts the decision.

Following this decision, the ATO will review some of its guidance currently on issue concerning the ATO’s ability to recover GST (and other indirect taxes) outside the usual 4 year recovery period.

If you operate a development business, or are planning to do so, contact your Westlawn Business Services Accountant about this case or to find out if there are any implications for your business should the ATO amend some of its published guidance.

Refunding excess GST – GSTR 2014/D4

The ATO has recently released for public consultation draft Goods and Services Tax Ruling GSTR 2014/D4 entitled “Goods and services tax: the meaning of the terms ‘passed on’ and ‘reimburse’ for the purposes of Division 142 of the A New Tax System (Goods and Services Tax) Act 1999“.

Part A of the draft Ruling sets out the Commissioner’s views on when an amount of ‘excess GST’ has been passed on to another entity. Part B of the draft Ruling discusses the circumstances in which the Commissioner considers an amount of ‘excess GST’, which has been passed on to another entity, has been reimbursed to that other entity.

It is important for any business that is registered for GST to know what may amount to ‘excess GST’ and when that excess GST is likely to have been passed on and reimbursed (as discussed in the draft Ruling).

Contact us about what impact this draft Ruling could have on your GST obligations.

Can you have PSI when no services have been provided?

Recently, the ATO issued draft Tax Determination TD 2014/D5 which considers when a personal services entity receives a payment from a service acquirer in relation to a period, whether that payment is personal services income (PSI) even though during the period the service provider is not providing services to the service acquirer until a later time when they might be called upon.

The answer is yes, the payment will still be PSI.

If you run a business and derive personal services income through your business entity, you should become familiar with this Tax Determination. We can help you understand the tax implications for your personal services business, if any, from this Determination.

Government response to the ‘Family Businesses in Australia’ report released

On 7 October 2014, Treasury released the Government’s response to the report of the Parliamentary Joint Committee on Corporations and Financial Services entitled ‘Family Businesses in Australia – different and significant: why they shouldn’t be overlooked’.

The report was tabled in Parliament in March 2013. The report made 21 recommendations on a wide variety of matters relating to Australia’s family businesses, including some recommendations directly affecting the taxation of businesses.

The government has agreed in principle to most of the recommendations of the report, including matters affecting tax laws. You can find the government’s responses on the treasury website.

Though the government has agreed in principle to a lot of the recommendations, it may be some time before any real change is seen. For now, it may be of interest to you as a business owner just to know what recommendations have been made to the government and what changes might occur that could affect your business at some stage in the future.

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Westlawn Business Services Pty Ltd provides this information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers.
Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.