The new financial year has arrived and here’s a few things to be immediately aware of:
For Individuals:
- Tax Time 2020 – the ATO have indicated that they will start full processing of 2019–20 tax returns on 5 July 2020 and expect to start paying refunds from 16 July 2020. They aim to finalise the majority of electronically-lodged current year tax returns within 12 business days of receipt.
- Shortcut method for home office ceases – you can claim a deduction of 80 cents for each hour you work from home from 1 March to 30 September 2020. The ATO may extend this, subject to work patterns returning to normal in FY21.
- Cents per kilometre rate – the cents per kilometre deduction rate changes to 72 cents per kilometre from 1 July 2020, up from 68 cents per kilometre in FY20.
For Businesses:
- Cash flow boost payments – all cash flow boosts are tax free (non-assessable non-exempt income).
JobKeeper payment – all JobKeeper payments are assessable income of the business that is eligible to receive the payments. - Benchmark interest rates – the 2020 ATO benchmark interest rate has changed to 5.37% (https://www.ato.gov.au/Rates/Division-7A—benchmark-interest-rate/).
- Company tax rates – company tax rates for base rate entities are changing to 26% from 27.5% in the 2021 financial year (https://www.ato.gov.au/rates/changes-to-company-tax-rates/). This change has franking implications which should be considered when reviewing/considering your FY20 dividend decisions.
- TPAR reporting – Businesses in the building and construction, cleaning, courier, road freight, IT, and security, investigation or surveillance industries must lodge a taxable payments annual report (TPAR) by 28 August 2020. The report includes the total payments made to contractors.
- STP closely held employee exemption – The ATO has announced that the STP exemption for entities with closely held employees (e.g., family members, directors or shareholders of a company, and beneficiaries of a trust) has been extended from 1 July 2020 to 1 July 2021.
- Superannuation Guarantee Amnesty – a superannuation guarantee amnesty was introduced on 6 March 2020. Employers participating in the amnesty need to apply by 7 September 2020.
- Instant asset write-off – the increased instant asset write-off limit of $150,000 expires on 31 December 2020.
All Taxpayers:
- HomeBuilder Grant – The building contract must be signed between 4 June 2020 and 31 December 2020. The Government has announced grants of $25,000 to encourage people to build a new home or substantially renovate their existing home.
- Family home no longer tax exempt for foreign residents – for homeowners after 9 May 2017, the transitional rules expire on 30 June 2020 relating to selling your home CGT free.
- If you have any concerns or queries regarding these actions, please get in touch with us directly.