February 2014 Update
Car expense rates per km – 2013/14
The car expense rates per kilometre have been set for the 2013/14 year (and they have been increased for the first time since 2008/09).
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Tax help for people affected by bushfires
The ATO has assured people directly affected by bushfires that their refunds will be fast tracked and that they will have additional time to lodge income tax returns and activity statements.
The ATO can also provide more time for people to pay tax debts and can help reconstruct tax records where documents have been destroyed.
People donating up to $10 to ‘bucket appeals’ and other disaster relief funds this financial year will be able to claim a tax deduction without a receipt.
Data Matching Programs
The Government has announced that it will request and collect information for the purposes of the following data matching programs.
Credit and Debit Card Data Matching Program
The ATO will request and collect data relating to credit and debit card sales of approximately 900,000 businesses for the periods from 1 July 2012 to 30 June 2014 from major banks and other financial institutions, including American Express and Diners Club Australia.
This data will be electronically matched with certain sections of ATO data holdings to help provide a more level playing field for those businesses which meet their obligations by identifying those who may not, for potential corrective action.
Injured Worker Data Matching Program
The Comcare Chief Executive Officer has announced that Comcare will request and collect from the ATO details of approximately 4,500 individuals who are currently receiving, or have received, incapacity payments in relation to a Comcare workers’ compensation claim for any period during the financial years 2009/10 through 2011/12.
Comcare will collect information reported by
individuals to the ATO for each relevant financial year and utilise this
information to ensure injured workers have received and continue to receive the
correct level of entitlements from Comcare.
The importance of BDBNs
Two recent court cases dealing with self-managed superannuation funds (SMSFs) have highlighted the importance of making, and recognising, Binding Death Benefit Nominations (BDBNs).
Editor: A member of a superannuation fund may generally make a ‘BDBN’ which, if valid, requires the trustee of the fund to pay out their death benefits (i.e., after they die) exactly as set out in the BDBN.
In the first case, a member of an SMSF expressed a desire in her Will that her superannuation benefits be left to her children (and specifically not to her husband).
However, she did not make a BDBN, and the Supreme Court of Western Australia held that the preference in her Will did not affect the rights or duties of the trustee of the fund under the fund’s trust deed. Consequently, the remaining trustee (i.e., the husband) had no obligation to appoint the deceased’s executor as a trustee of the fund, and was also entitled to distribute the death benefits at his discretion, contrary to the direction in the deceased’s Will.
In the second case, the deceased member of an SMSF had executed a BDBN in favour of his two children, but the trustees (basically the deceased’s spouse and her son from a previous relationship) had wrongly believed that the BDBN was invalid and so had ignored it.
Nonetheless, the Supreme Court of Victoria held that the BDBN was valid and binding on the trustees of the SMSF, and ordered that both the current trustee of the fund and the deceased’s spouse personally were liable to make payment of the full amount of the deceased’s benefits as at the date of death, plus an interest component and costs, to the nominated beneficiaries under the BDBN.
Reminder: Lodging SMSF returns
To help prepare for lodgement, the ATO is reminding those with SMSFs that their fund’s audit report needs to be completed before their SMSF annual return can be lodged.
This is especially important for new registrants (i.e., those SMSFs registered in the 2012/13 year), as their 2013 SMSF annual return is due on 28 February 2014.
Note that newly registered funds that did not have assets set aside for the benefit of their members and did not commence operating in their first year of registration may request a ‘return not necessary’ for their first year only.
However, funds that were set up in the 2012 year that have not yet set aside assets for the benefit of members, and have not operated, must have their registration cancelled.
ATO compliance: Taxable payments annual reports
The ATO has advised that it is phoning some businesses in the building and construction industry to:
- test the levels of understanding of the new reporting requirements for businesses in that industry; and
- help those businesses to comply with their taxable payments annual reporting obligations.
They have also been contacting them to:
- ensure lodged reports are correct and complete;
- follow up with businesses that have not yet lodged a report (where ATO records indicate they should have); and
- follow up with businesses who have advised that they are not required to report (where ATO records indicate they have a reporting requirement).
Small Business Super Clearing House Reform
The Government has announced that the ATO will take over the running of the Small Business Superannuation Clearing House, a free online service that helps small businesses with 19 or fewer employees meet their superannuation guarantee obligations by allowing employers to pay superannuation contributions in one transaction to a single location (currently administered by Medicare) to reduce red tape and compliance costs.
According to the Government, the ATO is best placed to increase the take up rate of the Clearing House, as they have access to data on who is eligible for this free service, and employers will be able to remit their compulsory superannuation payments directly to the ATO (which will then distribute contributions to individual accounts).
This move will be followed
by an extensive consultation process so the Government can better understand
superannuation compliance cost concerns and develop further options to reduce
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