October 2022
Banking business income to a private account
The ATO has stated that it has “no concerns” with business owners banking their business takings or other sales in private accounts, but that this may become an issue when this income isn’t reported.
Therefore, the ATO notes that a good way to avoid this problem is to establish a separate business bank account and only deposit sales and other business income into this account, as this can help with record keeping and monitoring the business’s cash flow.
The ATO uses many tools to identify income earned and to check if it matches income reported, and reminds taxpayers that business income includes all sales, whether they’re cash or electronic (for example, internet sales), and they must all be reported on the business’s tax return (as well as any earnings for services the business provides).
Editor: If you are unsure about what income you need to declare, feel free to contact our office.
‘Talking tax’ with new workers
The ATO is reminding employers that have taken on new employees that those employees can complete a TFN declaration through ATO online services, and that this is an easy way for them to provide both their employer and the ATO with the information needed.
If a new employee has a myGov account linked to the ATO, they can:
- access ATO online services;
- go to the ‘Employment’ menu; and
- select ‘New employment’ and complete the form.
This sends the TFN declaration details straight to the ATO, so the employer doesn’t have to.
Employees will need their employer’s ABN to complete the form and, once they’ve submitted it, they need to print it and give their employer the summary of their tax details so the employer can input the data into their system.
If an employer’s payroll software can link to the online commencement forms, it will automatically receive any new employees’ information from the ATO, saving them time spent otherwise entering the information manually.
Employers can also use the New employment form to collect a range of information contained in other forms, and employees can use it to authorise variations to the amount to be withheld from their pay for tax or the Medicare levy, or to advise of their choice of super fund.
They can also use it to update their tax circumstances with their employer; for example, if their residency status has changed or they are claiming the tax-free threshold from a different employer.
However, employers can continue to use their current processes when preferred, including providing a paper TFN declaration where employees can’t create a myGov account or don’t have access to the internet.
How the myGov update affects taxpayers
Clients using myGov will see that it has recently been updated with a new look and more features.
When signed in to myGov, clients might receive notifications through ‘Payments and claims’ from other government services, such as Centrelink.
However, the ATO has stated that it will not communicate using this feature. Instead, the ATO will continue to send messages to the myGov Inbox, and to tax agents on behalf of their clients, if that’s their communication preference.
Therefore, clients don’t need to do anything different, and can still:
- find myGov at the same website address (i.e., my.gov.au);
- sign in using their current sign-in details; and
- have access to all their linked services, including the ATO.
Input tax credits denied due to lodging BASs late
The AAT has held that a partnership’s entitlement to $16,361 of input tax credits claimed for the quarterly periods of 1 July 2012 to 31 March 2017 had ceased by the time the associated BASs were lodged with the ATO on 21 June 2021, and therefore the ATO did not need to pay the taxpayer a refund.
The operation of the GST Act means that, unless an extension of time to lodge a BAS has been granted prior to the expiry of 4 years after the day on which it was required to be given to the ATO, the entitlement to input tax credits immediately ceases.
The ATO has no discretion to get around this.
Valuing fund assets for an SMSF’s annual return
Editor: The ATO has provided the following reminder and general advice for SMSF trustees regarding their obligations to value the assets annually.
One of many responsibilities trustees have when managing an SMSF is valuing the fund’s assets at market value.
This must be done every income year, so the ATO knows the SMSF has complied with super laws.
The market value of an asset is the amount someone could be reasonably expected to pay if the asset was for sale.
Each year, the asset valuations will be reviewed by the fund’s approved SMSF auditor as part of the annual audit prior to lodgment of the SMSF’s annual return (‘SAR’). The auditor will check that assets have been valued correctly, and assess and document whether the basis for the valuation is appropriate given the nature of the asset.
Trustees are reminded to get their valuations done before they go to the auditor, as this will streamline the process and avoid delays. It is also the trustees’ responsibility to provide objective and supportable evidence to the auditor for the valuation of the fund’s assets, including all relevant documents requested by the auditor.
Failure to do so could result in a delay in auditing the fund and potential late lodgment of the fund’s annual return (and could also result in a contravention if the auditor believes mistakes have been made).
The ATO says trustees should “start researching now” to find who can value the fund’s assets and what type of evidence is needed to support the valuation, as this can take time. In some instances, the law requires valuations to be undertaken by a qualified, independent valuer.
Super guarantee contribution due date for September 2022 quarter
The due date for employers to make super guarantee contributions for their employees for the September 2022 quarter is 28 October 2022.
Varying PAYG instalments
The ATO is reminding taxpayers that they can vary their pay as you go (‘PAYG’) instalments if they think the amount they pay now will be more or less than their expected tax liability for the year, by lodging a variation through myGov or Online services for business.
Instalments for those who are PAYG instalment amount payers have been increased by the gross domestic product (‘GDP’) adjustment factor of 2% for the 2022/23 income year.
Due Dates – October 2022
Information for registered agents about preparing and lodging tax statements and returns due in October
2022.
21 October
- Pay annual PAYG instalment notice (Form N). Lodge only if you vary the instalment amount or use
the rate method to calculate the instalment. - Lodge and pay quarter 1, 2022–23 PAYG instalment activity statement for head companies of
consolidated groups. - Lodge and pay September 2022 monthly business activity statement.
28 October
- Lodge and pay quarter 1, 2022–23 activity statement if electing to receive and lodge by paper and
not an active STP reporter. Pay quarter 1, 2022–23 instalment notice (form R, S, or T). Lodge the
notice only if you vary the instalment amount. - Make super guarantee contributions for quarter 1, 2022–23 to funds by this date.
Employers who do not pay minimum super contributions for quarter 1 by this date must pay
the super guarantee charge and lodge a Superannuation guarantee charge statement by
28 November 2022.
Note: The super guarantee charge is not tax deductible.
Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee
withheld amounts from payments to beneficiaries during the 2021–22 income year.
31 October
- Final date to add new clients to your client list to ensure their 2022 tax return is covered by the
lodgement program.
Note: The lodgement program is a concession to registered agents. We can ask for documents to be lodged earlier than the lodgement program due dates.
- Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June
2022.
Note: This means all prior year returns must be lodged, not just the immediate prior year.
If all outstanding prior year returns have been lodged by 31 October 2022, the lodgement program
due dates will apply to the 2022 tax return.
- SMSFs in this category must lodge their complete Self-managed superannuation fund annual
return by this date. - Lodge and pay Self-managed superannuation fund annual return for (taxable and non-taxable) new
registrant SMSF if we have advised the SMSF that the first-year return has a 31 October 2022 due
date. - Lodge tax return for all entities prosecuted for non-lodgement of prior year returns and advised of a
lodgement due date of 31 October 2022: - Some prosecuted clients may have a different lodgement due date – refer to the letter you
received for the applicable due date. - Payment (if required) for individuals and trusts in this category is due as advised in their notice
of assessment. - Payment (if required) for companies and super funds in this category is due on 1 December
2022.
SMSFs in this category must lodge their complete Self-managed superannuation fund annual return by
this date.
- Lodge Annual investment income report (AIIR).
- Lodge Departing Australia superannuation payments (DASP) annual report.
- Lodge Franking account tax return when both the:
- return is a disclosure only (no amount payable)
- taxpayer is a 30 June balancer.
- Lodge PAYG withholding annual report no ABN withholding (NAT 3448).
- Lodge PAYG withholding from interest, dividend and royalty payments paid to non-residents –
annual report (NAT 7187). This report advises amounts withheld from payments to foreign residents
for: - interest and unfranked dividend payments that are not reported on an Annual investment
income report (AIIR)- Lodge PAYG withholding annual report – payments to foreign residents (NAT 12413). This report
advises amounts withheld from payments to foreign residents for: - entertainment and sports activities
- construction and related activities
- arranging casino gaming junket activities.
- Lodge lost members report for the period 1 January – 30 June 2022.
- Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 1,
2022–23.
- Lodge PAYG withholding annual report – payments to foreign residents (NAT 12413). This report