Welcome to our August 2023 newsletter.
We are excited to have celebrated Cascade’s 25th anniversary in July 2023 and we also commence the new financial year 2023-24.
Thank you for your support over those years.
There is alot of content in this newsletter. Please take advantage of the index to see what is of most interest to you.
Karen & Team Cascade
In this issue we look at these topics:
- 2023 Technology and Training Boost
- Scammers Pretending to be ATO
- Where did my Refund go?
- Working from home Claims
- Personal Services Income
- ATO and Compulsory Superannuation
- ATO Debts
- Superannuaiton to 11% for Employees
- ASIC Fees Annual Increase
- Director’s ID
- 2023 and 2024 Tax Rates
- Temporary Full Expensing (Instant Asset Write Off)
- Super – Carry Forward Unused Concessional Contributions
- ATO Audit Activity
- Do you want to improve your office automation
Technology and Training Boost
On 23 June 2023 the Federal Government passed a law providing a Technology Boost of 120% and a Training Boost of 120%. This means if you spent $100 on technology, you will receive an additional $20 tax deduction.
The Technology Boost is for money spent on technology from 7.30pm (AEST), 29 March 2022 and 30 June 2023.
The Training Boost is for money spent on technology from 7.30pm (AEST), 29 March 2022 and 30 June 2024 and spent with an Australian Registered Training Organisation.
If you use QuickBooks Online (QBO), we are using the QBO “Tags to mark eligible technology and training expenditure in the relevant period as one of #TechBoost22 or #TechBoost23 or #TrainBoost22, #TrainBoost23, or #TrainBoost24 as appropriate.
We need you to clarify on expenditure that might not be clear, especially things purchased from Officeworks and other stationers that sell technology products.
If you are aware of buying technology from Officeworks or similar from 29 March 2022 and 30 June 2023 please email us the invoice or attach it to your QBO transaction.
Contact us for more information.
Scammers pretending to be ATO
Please be really vigilant of scams around tax refunds. We have recently seen a BAS amended fraudently and the bank account changed claiming a $40,000 refund!
There are people calling about your refunds, just wanting enough information to impersonate you. If you are contacted by the ATO and you are uncertain if it really is the ATO, things you can do include:
- Ask them to contact your tax agent (us)
- Ask them for a reference number and then call a listed ATO number
- Tell them to email you with the email they have on file (might be yours or ours)
- Do not give out your tax file number or date of birth
- Tell them you are scared this is a scammer and HANG UP.
Remember if you are uncertain if it is the ATO then it probably isn’t.
Contact us for more information.
Where did my Refund go?
Low and Middle Income Tax Offset – Where did my refund go?
Unfortunately a tax refund only occurs when we have paid more tax than we needed to. Teh tax tables are set up so if we earn exactly the same amout of money all year we should have paid the correct tax and not have a refund due or payment owing.
An exception to this was the Low and Middle Income Tax Offset (LMITO) which ended on 30 June 2022 and will not be applied to the 2023 year.
This offset was a reduction to the amount of tax payable by up to $1,500 (depending on taxable income amounts) and applied to taxable income up to $126,000. This applied from 1 July 2018 to 30 June 2022.
This may come as a shock to some taxpayers when they are not automatically receiving a refund in the 2023 year or that their refund may be less than they expect.
Separately to this, there is still the Low Income Tax Offset (LITO) that is applied to any taxpayers earning less than $66,667. It is an offset of a maximum of $700 that is applied to your income when you have lodged for the 2023 year. The amount you receive will depend on how much your taxable income is.
Please talk to us if you have any questions about your claims for the 2023 year.
Working from Home
The ATO has indicated that the Working from Home deductions will be strictly reviewed in tax returns for the 2023 year.
For the 2023 year, there is a Fixed Rate method claim of $0.67 per work hour (available from 1 July 2022). If you don’t use the Fixed Rate method, the other claim method available is the actual costs method.
From 1 July 2023, the fixed rate method has been increased, the type of expenses it covers changed and removing the requirement to have a home office set aside for work.
Record Keeping for Fixed Rate method
- Record of number of actual hours worked (timesheet, roster, diary or similar)
- One record for each of the additional running expenses that the rate per work includes
E.g. one quarterly bill for electricity, one receipt for stationery etc
The Fixed rate does not include
- depreciating assets that decline in value over time
- occupancy expenses (such as mortgage interest or rent)
- cleaning expenses
Note that if you previously were using the shortcut method, this is not available for the 2023 year forward.
Contact us for assistance
Personal Services Income
The rules around Personal Services Income have changed. If you are a professional running a business but you are the only person producing income, you MIGHT be subject to Personal Services Income (PSI) rules for the first time.
The impact of this rule is you might not be able to leave money in a company, or distribtute to family from a trust – that is you might have to pay tax on all earnings in your own name. (….and that could hurt!)
There isn’t alot of clarity around this situation at present.
We are talking to those who might be affected. Please call us if this sounds like your situaiton.
ATO and Compulsory Super Contributions
The deadline for the lodgement and payment of employee superannuaiton has been the 28th day of each new quarter for a long time. However until recently this rule has not been enforced.
Unfortunately, in the last 12 months, the ATO has been actively enforcing it.
BEWARE! The ATO has issued many notices for late payment of superannuation.
The problem with the issue of these notices are many.
- Â The deductivility of the superannuation is lost
- Â Nasty forms need to be filled in – one for each staff member per quarter, which attract a fee of $25 per form.
- Interest is charged on the amount that seems impossible to get remitted.
Contact us for more information.
ATO Debts
If you have tax debts we encourage you to keep up regular payments, if you are able to, even if they are small.
The ATO likes to see regular payments.
We have some clients aware of their tax debts, making regular payments, but the ATO hasn’t yet asked for a payment plan.
When the ATO does call asking for a payment plan, if you have been paying a consistent amount of the last three months or more, it make is much easier to convince the ATO officer to approve that plan with out the additional fuss of their “capacity to pay” paperwork.
Super Guarantee to 11% for Employees
As of 1 July 2023, the Superannuation Guarantee rate is increasing to 11%.
This means that for any wages paid from 1 July 2023, the super accrued will be 11% of the Gross pay.
If you are paying your staff the same gross pay in 2023-24 as in 2022-23, your Single Touch Payroll (STP) compliant software will automatically calculate 11% Superannuation on all pays where the payment date is 1 July 2023 or later.
For employees that have Salary packages that include superannuation, if nothing else changes, this will mean their net take home pay will be decreased. We have contacted most clients who are using salary packaging already.
Contact us for more information.
ASIC Fees Annual Increase
ASIC fees are indexed each year in line with the Consumer Price Index (CPI).
From 1 July 2023, some ASIC fees may change based on an increase in the CPI.
The list of updated fees from ASIC website providing an overview of some of the common fees that have changee from 1 July 2023 can be found at https://asic.gov.au/fees/.
Director’s ID
If you are a Director, by now you should have applied for an received your Director’s ID from the Australian Business Registry Services (ABRS).
If you haven’t, you want to take action now!
A Director ID is a unique identifier that a director will apply for once and keep forever – which will help prevent the use of false or fraudulent director identities. All Directors of companies in Australia need to apply for and keep their Director’s ID safe.
As of 30 November 2022, Directors without a Directors ID could result in a maximum penalty of $16,500 in Criminal charged or $1,375,000 in Civil charges. Those are both BIG reasons to ensure your ID is up to date and current!
If you are a new Director, or looking to be, you need to apply prior to being appointed as a Director.
For information on applying, please see information at
https://asic.gov.au/for-business/running-a-company/company-officeholder-duties/director-identification-number/
2023 and 2024 Tax Rates
The individual tax rates for 2023 and 2024 are the same for both years and are listed below.
Each year the HECS brackets change. This means if you have peopel with HECS debts who didn’t get a rise on 1 July 2023 their HECS may have decreased and their take home pay is a bit higher.
If you pay bonuses to qualified staff who have debts from their days of studying, be careful to take account of the impact of the change in HECS bracket – they don’t just apply to the bonus, the rates apply across their whole income. Click here to see a worked example.
The tax rates for a company turning over less than $5 million per annum remains at 25%.
Temporary Full Expensing (Instant Asset Write Off)
The ATO Temporary Full Expensing measures to assist Small Business remains current to 30 June 2023.
These temporary rules mean that you can immediately deduct the business portion of an asset’s costs for assets that you start to hold and first use from 6 October 2020 up to 30 June 2023. These are not added to your small business pool and there is no threshold applying to the cost of the asset.
You cannot deduct the business portion of an asset’s cost where the asset is excluded from the simplified depreciation rules. The general temporary full expensing rules may apply to these assets.
Contact us for more information relevant to your situaiton.
Superannuation – Carry Forward Unused Concessional Contributions
From the 2019-20 year, the ATO has brought in ‘carry-forward’ rules which allow you to make extra concessional contributions, above that year’s general contributions cap, without having to pay the excess contributions tax.
This arrangement involves using concessional cap amounts from previous years that were not used to their full extent. Unused cap amounts are available for a maximum of five years and will expire after this.
From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year is $25,000. From 1 July 2021, the concessional contributions cap is $27,500.
You can view and manage your concessional contributions and carry forward amounts using the ATO myGov website.
Please be careful if making last minute contributions at year end. Ensure your superannuation clearing house will in fact process contributions in the last few days by 30 June, otherwise you might be tying up your cash for no immediate gain.
Superannuaiton can be a very useful tax planning tool for people approaching their superannuation preservation date.
See more at https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Preservation-of-super/
Contact us for more information.
ATO Audit Activity
The ATO are becoming more active around audits.
Please be sure to have accurate records including:
Tax File Number Declarations for recently hired staff. These are now able to be lodged via your payroll software;
Tax invoices for all GST claims where the taxable supply is over $75;
Copies of all bank statements for your business accounts. it is especially important to check you have all copies before closing any any bank accounts;
Some banks only let you go back a few months to download statements. We encourage you to keep abreast of your bank’s rules and download statements regularly.
Do you want to improve your office automation?
How do you know you are truly running a paperless office?
One of our staff was asked to draft a cover letter to return original bank statements to a client. This was the first time in three years we had been given original paper copy bank statements. The staff member scanned the bank statements to file and drafted an email to send to the client!
The only problem was – what to do with the paper bank statements… become re-acquainted with Australia Post!
For more about how we went paperless read here.
If you need help with these or anyother topics please contact our office on 07 3422 1333.
