Archer Gowland | Tax Update - March 2019

A brief note below on some taxation matters that may impact your business and some announcements that are not yet law but might be useful for your business planning.

Townsville Floods - ATO Lodgement Concessions

If floods are affecting you or your clients in Townsville and surrounds, the ATO will assist. If your business or your clients live in one of the identified areas.

Automatic deferrals will be progressively applied:

• lodgment and payment of monthly activity statements due 21 February 2019 - deferred to 21 March 2019
• lodgment and payment of quarterly activity statements due 28 February 2019 - deferred to 28 March 2019
• lodgment and payment of income tax returns due 28 February 2019 - deferred to 28 March 2019
• lodgment and payment of fringe benefit tax returns due 28 February 2019 to 28 March 2019.

Annual Vacancy Fee

In December 2017, the Australian Government introduced a vacancy fee for foreign owners of residential dwellings.

Under the legislation, foreign owners of residential dwellings in Australia are required to pay an annual vacancy fee if their dwelling is not residentially occupied or rented out for more than 183 days (six months) in a year. If you're a foreign owner of a residential dwelling you may be liable to pay the vacancy fee.

The vacancy fee return must be lodged by foreign owners of residential dwellings who:

• made a foreign investment application for residential property after 7.30pm AEST on 9 May 2017
• purchased under a New Dwelling Exemption Certificate that a developer applied for after 7:30pm AEST on 9 May 2017.

Foreign owners of vacant land do not have to lodge a vacancy fee return until a dwelling has been constructed on the land. When multiple dwellings are constructed on the land, a vacancy fee return must be lodged for each new dwelling constructed.

You must lodge a return even when the dwelling has been occupied or made available for rent.

If the dwelling is owned by two or more people as joint tenants, you only need to lodge one return.

If you own a share of a dwelling as a tenant in common, you each must lodge a vacancy fee return.

You will need to pay an annual vacancy fee if your dwelling is not residentially occupied or genuinely available on the rental market for more than 183 days during the vacancy year.

The vacancy fee may also apply if the vacancy fee return is not lodged by the due date.

If you can show that for at least 183 days in a vacancy year, your dwelling was incapable of being occupied as a residence you will not be liable to pay the vacancy fee. You must lodge a vacancy fee return to claim this exemption.

A dwelling is considered residentially occupied if, for at least 183 days in a vacancy year, any of the following circumstances are met:

• the owner or a relative of the owner genuinely occupied the dwelling as a residence
• the dwelling was genuinely occupied as a residence subject to lease or license for minimum terms of 30 days
• the dwelling was made genuinely available as a residence on the rental market (with minimum terms of 30 days).

Residential occupancy of at least 183 days does not need to be one continuous block of time.

Residential occupancy can be made up of multiple continuous periods of at least 30 days throughout the vacancy year.

Dwellings made available for short term lease of less than 30 days (including via web based stay sites) are not considered residentially occupied and would be liable for a vacancy fee.

If you believe that the above fee may potentially impact you and you need to lodge a vacancy fee return please contact us on (07) 3002 2699.

Deductions For Paying Employees

The rules for claiming deductions for payments to workers are changing.

From 1 July 2019, you can only claim deductions for payments made to your workers where you have met the pay as you go (PAYG) withholding obligation for that payment.

More specifically, a business will only be able to claim a deduction for the following payments if they comply with the new PAYG withholding rules:

• Salaries, wages, commissions, bonuses or allowances to an employee.
• Directors’ fees.
• Payments made under a labour hire arrangement
• Payments for a supply of service where no ABN has been provided by the contractor.

Where the PAYG withholding rules require an amount to be withheld, you must:

• withhold the amount from the payment before you pay your worker
• report that amount to us.

You won't lose your deduction if you:

• withhold an incorrect amount by mistake – to minimise any penalties you can correct your mistake by lodging a voluntary disclosure in the approved form
• withhold the correct amount but made a mistake when reporting – correct your mistake as soon as possible.

If there is a withholding or reporting requirement and no amount is withheld or reported to us, you will lose your deduction unless you make a voluntary disclosure in the approved form before we let you know we've begun an examination of your affairs.

Single Touch Payroll

Our previous blog touched on the upcoming STP requirements applying from 1 July 2019. For more information, view our Single Touch Payroll article here - blog.agredshaw.com.au

If you have any questions on how the STP system and the new PAYG withholding rules will impact your business please contact us.

Capital Expenditure Write Off

The government has introduced into parliament legislation that will increase the instant asset write-off threshold from $20,000 to $25,000 and extend the initiative for another year from its existing June 2019 end-date to 30 June 2020.

This will enable small businesses across the country with an annual turnover of less than $10 million to claim an immediate deduction for the business-use portion of each depreciating asset costing less than $25,000 from 29 January 2019.

Please note that the above has not yet passed and received royal assent.

Primary Producers - Fodder

You can claim a deduction for the full cost of a fodder storage asset, if you:

• incurred the expense either:
• on or after 19 August 2018
• before 19 August 2018 and it was first used or installed ready for use on or after 19 August 2018
• mainly use it to store fodder
• use it in a primary production business on land in Australia – even if you are only a lessee of the land.

Claim the deduction through your tax return in the year you incurred the expense.

Otherwise, you will continue to depreciate fodder storage assets over three years if you incurred the expense from 7.30pm AEST, 12 May 2015 to 18 August 2018.

Please note that the fodder concessions have received royal assent.

For More Information

For more information on managing your tax commitments, please contact our office on (07) 3002 2699.