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A year unlike any we have ever seen… |
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It has been a very tough year for many of our clients (and our team here) having to contend with and overcome the many COVID19 barriers, shutdowns and border crossing headaches. An optimistic view would tell you it will all be over soon, but a more cautious view might say that we are only at the start of continuous and repetitive upheaval to ensure this pandemic is managed to ultimately save lives. Adaptation and knowledge are the keys to existing in this very strange economy, and here at Lidgerwoods Accountants we have gone above and beyond to ensure that all clients have been able to grasp the enormous amount of various government assistance packages available. Our office is currently open by appointment only (and of course subject to Victorian Government changes), we want to assure you that our whole team is upstairs and here to look after you at a moment’s notice when you need us. Our team keeps growing also, and we take great pleasure to introduce you to our Graduate Accountant Jacob Krautz, who joined our firm in January 2021. Jacob has already had a few years experience in public accounting in his home town of Albury and recently had his 2nd wedding celebration with his wife Jenny (due to COVID cancellations).
Some important articles and taxation updates are attached to this newsletter that we recommend you take a few moments to read, and we look forward to seeing you in the new tax year. |
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The Team at Lidgerwoods SOPHIE, MARC, SHARON, LOUISE, DAVID, DARCY, JACOB & KYLIE |
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Victorian Circuit Breaker Shutdown (27th May 2021 onwards)
A new Business Costs Assistance Program is available for those clients who were forced to close in the most recent Victorian state-wide Circuit Breaker shutdown from Thursday 27th May 2021. Applications are open until Thursday 24th June 2021, so please ensure you go to the link below to ensure you do not miss out.
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Big superannuation changes from 1 July 2021
The super guarantee rate will rise from 9.5% to 10% on 1 July 2021, so businesses with employees will need to ensure their payroll and accounting systems are updated to incorporate the increase to the super rate. Editor: Note that the first wage payment after 1st July 2021 needs to include SG at this new rate – irrespective that some of the work was performed prior to the end of the year. The ATO has confirmed that, from 1 July 2021, the superannuation concessional and non-concessional contribution caps will be indexed. The new caps for the 2021/22 year will be:
The total superannuation balance and transfer balance cap will also increase from $1.6 to $1.7 million, effective from 1 July 2021. Editor: This sets out the maximum deductible superannuation contributions that an individual taxpayer can make in the 2021/22 year.
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Family assistance payments - have you lodged your return?
Services Australia needs such individuals' income details to balance payments for Child Care Subsidy and Family Tax Benefit. If tax return lodgment is not made by 30 June 2021:
Editor: If you still have not lodged your 2019/20 income tax return with us, and you receive the above Centrelink benefits, you need to contact our office immediately, as it may still be possible for us to get your return lodged.
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The ATO has reminded individuals receiving Child Care Subsidy and Family Tax Benefit payments from Services Australia that they and their partners must lodge their 2019/20 Individual tax returns by 30 June 2021. Lodgement deferrals with the ATO do not alter this requirement.
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New ATO data-matching programs - Big Brother Is watching!
The ATO has advised that it will engage in TWO new data matching programs dealing with property transactions, as outlined below:
The ATO has also announced it will engage in the following data-matching programs:
Editor: You really cannot assume that you hide from the ATO with the abundance of digital transaction data at their disposal. Rental owners, tenants, car owners, and those using online sales platforms like Ebay, Gumtree, Air BnB etc are all in the ATO’s reach.
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Cryptocurrency under the microscope this tax time
The ATO is concerned that many taxpayers believe their cryptocurrency gains are tax-free, or only taxable when the holdings are cashed back into Australian dollars. ATO data analysis shows a dramatic increase in trading since the beginning of 2020, and has estimated that there are over 600,000 taxpayers that have invested in crypto-assets in recent years. This year, the ATO will be writing to around 100,000 taxpayers with cryptocurrency assets explaining their tax obligations and urging them to review their previously lodged returns. The ATO also expects to prompt almost 300,000 taxpayers as they lodge their 2021 tax return to report their cryptocurrency capital gains or losses. Gains from cryptocurrency are similar to gains from other investments, such as shares. CGT also applies to the disposal of non-fungible tokens ('NFTs'). The ATO matches data from cryptocurrency designated service providers to individuals’ tax returns, helping it to ensure investors are paying the right amount of tax. “The best tip to nail your cryptocurrency gains and losses is to keep accurate records including dates of transactions, the value in Australian dollars at the time of the transactions, what the transactions were for, and who the other party was, even if it’s just their wallet address,” Assistant Commissioner Tim Loh said. Businesses or sole traders that are paid cryptocurrency for goods or services will have these payments taxed as income based on the value of the cryptocurrency in Australian dollars. Holding a cryptocurrency for at least 12 months as an investment may mean the holder is entitled to a CGT discount if they have made a capital gain. |
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New succession planning guide for family businesses
The Australian Small Business and Family Enterprise Ombudsman, in conjunction with Family Business Australia, has released a new online guide to succession planning — the “Introductory Guide to Family Business Succession Planning” — which provides a step-by-step guide to passing the family business on to the next generation. A recent report revealing that 54% of family businesses have no documented succession plan in place and no retirement plan for the current CEO. The easy-to-read guide offers tips on how to handle tense conversations that can arise between family members throughout the transition phase. The 21 page guide is free and available on both the Family Business Australia and the ASBFEO’s websites, or contact our office and we can send you the link to this. Editor: Our general observation of our business clients is that despite the importance of this topic, many of our clients have not taken the time to consider the future of their business or the transfer of assets or property to the next generation. Feel free to contact our office to arrange an appointment to discuss this very important matter. |
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Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. |
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Lastly we welcome your feedback. If you found this E-Newsletter very useful (or not?), 'The Team' at Lidgerwoods Accountants |