Tax Changes – What’s new?

Tax changes from 1 July 2021

A number of changes apply from 1 July 2021. These include:

  • Medium businesses (aggregated turnover of at least $10 million but less than $50 million) can use the simplified trading stock rules, the GDP-adjusted notional tax method to work out PAYG instalments and the simplified GST accounting method.
  • Single Touch Payroll (STP) reporting:
    • STP applies to small employers (1–19 employees) in relation to closely-held payees (eg family members and directors and shareholders if the employer is a company); and
  • The quarterly reporting concession for micro employers (1–4 employees) only applies to employers who report through a registered tax professional and where exceptional circumstances exist.

Note that STP Phase 2 (requiring employers to provide additional payroll information through STP) begins on 1 January 2022.

  • Amending assessments – the standard time limit for amending assessments is reduced from 4 years to 2 years for medium businesses (applicable for income years commencing on or after 1 July 2021) – this is the same as for small businesses.
  • Superannuation guarantee – the superannuation guarantee charge percentage increased to 10% (it is legislated to gradually increase each year until 1 July 2025 when it becomes 12%). The maximum contribution base for 2021–22 increased to $58,920 (from $57,090).
  • R&D tax offset – changes in how the offset is calculated, an increase in the expenditure threshold from $100 million to $150 million and new clawback rules.
  • Film incentives – once the relevant legislation is passed by Parliament, some of the rules about qualifying Australian production expenditure (QAPE) will change, the producer offset for films that are not feature films released in cinemas will increase to 30% of total QAPE and there will be various threshold and integrity changes across the 3 different offsets (location, producer, Post, Digital and Visual Effects (PDV)).

FBT changes

  • Exemptions – the fringe benefits tax (FBT) exemptions for car parking and work-related electronic devices available to small businesses have been extended to medium businesses (aggregated turnover of at least $10 million but less than $50 million) from 1 April 2021.
  • Retraining – retraining and reskilling benefits provided by an employer to redundant employees to enable them to obtain new employment are exempt from FBT, provided the employer complies with any redundancy obligations under the Fair Work Act 2009. The exemption does not extend to relatives of the employer or, if the employer is a company, shareholders, directors and their relatives. The exemption does not cover tertiary education fees and HELP loan repayments.

Tip!

Contact Southern Business Solutions to find out about any changes that might affect your business.

No GDP adjustment for 2021–22

The GST and PAYG instalment amounts are usually adjusted every year using a formula known as the gross domestic product (GDP) adjustment.

However, the ATO has announced that the GDP adjustment to work out quarterly GST and PAYG instalment amounts for the 2021–22 income year is nil. It was also nil for 2020–21.

Ref: Tax Wise Business October 2021

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