Tax Updates – June 2021

Increase in Superannuation Rate and Limits

The compulsory employer superannuation payments are increasing from 9.5% to 10% from 1 July 2021. Please ensure you update your payroll software or manual calculations as required.

Additionally, the concessional contributions cap for superannuation contributions increases from $25,000 to $27,500 from 1 July 2021.

Working from Home Deductions

The ATO has extended the temporary COVID-Rate of working from home deductions for employees for the entire period 1 July 2020 to 30 June 2021. The COVID- Shortcut rate allows employees to claim 80 cents for each hour worked from home. If the shortcut method is used, there are no further allowable deductions for working from home.

Employees are required to keep a diary of hours worked from home as substantiation of the deduction. The alternative methods of fixed rate and actual cost method are still available if required.

Temporary Full Expensing of Depreciating Assets

Businesses with turnover of less than $5 billion can temporarily fully expense any eligible new depreciating asset purchased and installed ready for use between 6 October 2020 and 30 June 2022. This full expensing also includes any costs incurred on improvements to existing depreciating assets.

Businesses with turnover of less than $50 million are also able to fully expense the purchase cost of second-hand depreciating assets.

For businesses other than small businesses, a business can opt-out of the temporary full expensing provisions on an asset-by-asset basis.

For business that are eligible for the small business depreciation concessions (turnover of less than $10 million) the full expensing of new and second-hand depreciating is available, along with full expensing of the value of their small business depreciation pool.

Improvements to ATO Online Payments

ATO Online Services has enhanced the payments function as follows:

  • Allows for up to three debit or credit card to be saved to your account
  • Set up a payment plan for automatic direct debits from a card
  • One off payments using a card

ATO Online Services also allows taxpayers to setup their own payment plan when the tax debt is less than $100,000. The portal will provide a suggested up-front amount and payments via instalments, however this can be tailored to your specific business needs.

Car Limit Changes

The depreciation cost limit for motor vehicles will increase on 1 July 2021 to $60,733 from the prior year of $59,136. The luxury car tax threshold has also increased on 1 July 2021 to $69,152 for general cars and $79,659 for fuel efficient vehicles.

Changes to ATO Online Services

The old ATO Business Portal is to be retired at the end of July 2021 with all ATO services now being provided through ATO Online Services. In order to use Online Services, your business is required to have Relationship Access Manager (RAM) and all users need to have a myGovID. If you have not already made the switch, and need assistance with the process, please contact your CIB representative.

Valuations for your Self-Managed Superannuation Fund

All the assets held in a SMSF are required to be revalued at the end of each financial year. This requirement is particularly relevant for funds in pension mode, as the subsequent year minimum pension amount is calculated as a percentage of the prior year members pension balance. For SMSFs which hold real estate, this is a reminder that a new valuation must be obtained each year. The ATO will accept a real estate agent valuation where supporting data is provided to determine the valuation. If the real estate holding is particularly unique, a registered valuers appraisal may be prudent.

Workplace Advice Service

If you have a dispute with an employee and require professional advice on how to resolve the matter, the Fair Work Commission’s Workplace Advice Service is able to offer free legal services to employers and employees.

The Commission partners with law firms, community legal centres and legal aid to assist both parties on working through employment issues such as unfair dismissal, general protection and anti- bullying.

In order to be eligible for the service, your business must have fewer than 15 employees and don’t have:

  • Membership of an employer association
  • In-house staff who specialise in workplace relations and human resources
  • Legal representation

This service aims to reduce the barriers to access simple legal advice, particularly where an application does not have merit.

Fuel Tax Credits

The Fuel Tax Credits system now has the option for a simplified claim if the total claim amount is less than $10,000 each year. To use the simplified rate, all that is required is the distance travelled by eligible vehicles and the amount of eligible diesel acquired for the use in a heavy vehicle during the period.

GIC and SIC Rates

The ATO has published General Interest Charge (GIC) and Shortfall Interest Charge (SIC) rates for the first quarter of the 2021- 22 income year. The GIC annual rate for July – September 2021 is 7.04% and the SIC rate is 3.04%.

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