SMSFs must report certain events that affect any member’s transfer balance account (‘TBA’) quarterly using transfer balance account reporting (‘TBAR’).  These events must be reported even if the member’s total superannuation balance is less than $1 million.

SMSF trustees must report and lodge within 28 days after the end of the quarter in which the event occurs, although they are not required to lodge if no TBA event occurred during the quarter.

For example, if an SMSF had a TBA event in the quarter ending 31 March 2024, the trustee of the SMSF must lodge a TBAR by 28 April 2024.

If an SMSF does not lodge a TBAR by the required date, the member’s TBA may be adversely affected.  The member may need to commute any amounts in excess of their transfer balance cap and pay more in excess transfer balance tax.

Editor: If you need assistance in relation to any of these issues, please contact our office.

Taxpayers who have been working from home this financial year, and who consequently incurred work-related expenses, have two ways to calculate their work from home deduction:

• the actual cost method; or
• the fixed rate method.

Using the fixed rate method, taxpayers can claim a rate of 67 cents per hour worked at home.

This amount covers additional running expenses, including electricity and gas, phone and internet usage, stationery, and computer consumables.  A deduction for these costs cannot be claimed elsewhere in their tax return, although taxpayers can separately claim any depreciating assets, such as office furniture or technology.

Taxpayers need to have the right records, and the record-keeping requirements differ for the fixed rate method and the actual cost method.

Editor: If you need more information regarding making these claims, please contact our office.

The big news story for those contributing to super is that the contribution caps are set to increase from the 2025 income year.

• The concessional contribution cap will increase from $27,500 to $30,000.
• This ‘CC’ cap is broadly applicable to employer super guarantee contributions, personal deductible contributions and salary sacrificed contributions.
• The non-concessional contribution cap will increase from $110,000 to $120,000.
• This ‘NCC’ cap is generally applicable to personal non-deductible contributions.

The increase in the NCC cap also means that the maximum available under the three-year bring forward provisions will increase from $330,000 to $360,000.  This is provided that the ‘bring forward’ is triggered on or after 1 July 2024.

The ‘total superannuation balance’ threshold for being able to make  non-concessional contributions (and the pension general transfer balance cap) will remain at $1.9 million.

Businesses that pay contractors to provide certain services may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.

From 22 March, the ATO will apply penalties to businesses that:

• have not lodged their TPAR from 2023 or previous income years;
• have received three reminder letters about their overdue TPAR.

Taxpayers that do not need to lodge a TPAR can submit a ‘non-lodgment advice form’.  Taxpayers that no longer pay contractors can also use this form to indicate that they will not need to lodge a TPAR in the future.

The ATO has recently issued a reminder that small business owners may be eligible for concessions on the amount of tax they ultimately pay.

This depends on their business structure, their industry and their aggregated annual turnover.

For example, small business owners who have an aggregated annual turnover of less than:

•       $2 million can access the small business CGT concessions;
•       $5 million can access the small business income tax offset; and
•       $10 million can access the small business restructure roll-over.

The ATO expects small business owners to check their eligibility each year before they apply for any of these concessions.

Furthermore, taxpayers generally need to keep records for five years to prove any claims they make.

Editor: We are always on the look-out for what tax concessions may be of use to our clients based on their individual circumstances.  These small business concessions in particular, can be very beneficial when applicable. 

The ATO has advised employers that ‘FBT time’ is just around the corner, and they need to stay on top of their fringe benefits tax (FBT) obligations.

Employers need to ensure they have attended to the following matters this FBT time:

• Identify if they have an FBT liability regarding fringe benefits they have provided to their employees or their associates between 1 April 2023 and 31 March 2024.
• Identify if they have an FBT liability as they will need to lodge an FBT return and pay the amount due by 21 May.
• Identify if they are currently registered for FBT and let the ATO know if they do not need to lodge an FBT return (Editor: by asking us to lodge an FBT non-lodgment notice) to prevent the ATO seeking a return from them at a later date.
• Employers should also remember that when the new FBT year starts on 1 April, they can choose to use existing records instead of travel diaries and declarations for some fringe benefits.

Furthermore, the ATO has released PCG 2024/2 which provides a short cut method to help work out the cost of charging electric vehicles (‘EV’) at an employee’s home for FBT purposes.

Eligible employers can choose to use either the EV home charging rate of 4.2 cents per kilometre or the actual cost.

Ultimately, all employers need to make sure they understand their FBT obligations and the records they need to keep to avoid an FBT liability.

Despite previous assurances, and after much speculation, the Government has announced tweaks to the ‘Stage 3’ tax cuts that will apply from 1 July 2024.

More particularly, the Government proposes to:

• reduce the 19% tax rate to 16%;
• reduce the 32.5% tax rate to 30% for incomes between $45,000 and a new $135,000 threshold;
• increase the threshold at which the 37% tax rate applies from $120,000 to $135,000;
• increase the threshold at which the 45% tax rate applies from $180,000 to $190,000; and
• The Medicare levy low-income thresholds for the 2024 income year will also be increased.

The AAT recently held that the sale of land by a taxpayer was subject to GST, as it was a supply made in the course of an enterprise being carried on by the taxpayer.

The taxpayer purchased a single parcel of land in 2013 for $1.6 million, and he subsequently took steps for the land to be subdivided and rezoned.  He then sold the land in 2021 for $4.25 million before the subdivision was completed.

The ATO advised the taxpayer that the sale of the land was subject to GST as a taxable supply under the GST Act.

The taxpayer objected to the GST assessment on the following grounds:

•       the sale of the property was not made by him in the course of his enterprise; and
•       as the property was the taxpayer’s residential premises, it was an input taxed supply, so no GST should apply anyway.

However, the AAT agreed with the ATO that the sale of the property was subject to GST as a supply made in the course of the taxpayer’s enterprise.

The AAT first noted that the sale of the property was not an input taxed supply of residential premises because the buildings on the property were uninhabitable, and so the property did not meet the definition of ‘residential premises’ in the GST Act.

The AAT also held that the taxpayer’s development works were in “the form of a business”, even if he was not in the business of being a property developer.  Relevant factors included the scale of the operations that the taxpayer was involved in (including rezoning and subdividing the property), as well as the amount of capital invested by him in the purchase of the property and development works.

The taxpayer’s “series of activities” throughout his ownership of the property therefore amounted to the carrying on of an enterprise, and the taxpayer was liable to pay GST on the sale of the property.

The Administrative Appeals Tribunal (‘AAT’) recently held that a taxpayer should not be allowed deductions for various work-related expenses, largely because the substantiation requirements had not been satisfied.

The taxpayer, a real estate salesperson, claimed tax deductions for the 2018 to 2020 income years, during which time he derived income from his employment with a real estate company.

However, the ATO disallowed the taxpayer’s claims for various work-related expenses, including car expenses, and gifts and donations.

The AAT agreed with the ATO, and held that the expenses claimed were not deductible and that the taxpayer had failed to substantiate his claims.

The taxpayer had claimed deductions for car expenses using the logbook method, but the AAT noted that the car was owned by a company and was not leased to the taxpayer.  Therefore, the car was not ‘held’ by the taxpayer, as required by the logbook method.  The taxpayer’s logbook also lacked “sufficient specificity” for this method.

While the taxpayer produced credit card statements and telephone tax invoices (in relation to credit card interest and telephone expenses), it was not clear from these documents whether the costs claimed related to work expenses.

The taxpayer sought to rely on bank transaction statements in relation to other expenses, but they were considered to be insufficient, as it was unclear from these statements what the relevant expense was, how the expense was incurred in earning the taxpayer’s assessable income, and any apportionment between business and personal use.

There were also no receipts or tax invoices for any of the claimed donations.

The ATO recently issued a ruling which explains when an individual is an ’employee’ of an entity for pay as you go (‘PAYG’) withholding purposes.

A useful approach for establishing whether or not a worker is an employee of an engaging entity is to consider whether the worker is working in the business of the engaging entity, based on the construction of the terms of the relevant contract. Importantly, the fact that a worker may be conducting their own business, including having an ABN, is not determinative.

Editor: If you need help with this important issue, please contact our office.