Some of the things in brief you really do not want to read about but probably should.
The ATO are improving their website design and technical platform
The ATO are working on an improved website design for web address, www.ato.gov.au, which includes a new visual design and technical platform.
Their intent is to make it easier to access the most used content via an intuitive, task-based pathway and is part of an ongoing transformational journey for the site, spanning the next three to five years.
The new design is based on comprehensive user testing of the Individual, Business and Tax Professional segments of the site.
This project will improve the way content is organised on the site and the way it is accessed by all users. Some benefits include:
- A shift to more task-focused information for an easier, more guided user experience
- Intuitive menu options
- An evidence-based approach to prioritising content, based on web analytics, user research and business requirements
- The website will meet Web Content and Accessibility Guidelines (WCAG 2.0), which have been mandated for all government websites
- The website will support both an anonymous view and an authenticated view, making it easier for online transactions.
EFT means a quicker refund
Using electronic funds transfer (EFT) is a secure way to receive refunds and is faster than waiting for a cheque in the mail.
This tax time (from 1 July 2013) the ATO will be paying most refunds electronically. When we are lodging your individual income tax returns through the electronic lodgment service (ELS), we will need to provide to ATO with your financial institution details. Depending on your personal circumstances this could be your trust account or your bank account details.
New commitments to service
The ATO are currently reviewing their service standards to ensure a closer alignment with community expectations and to provide a flexible response to organisational and government strategic directions.
The current service standards, introduced in July 1997 with the implementation of the Taxpayers' Charter, primarily measure the timeliness of service delivery. While the number of service standards has increased and decreased over time to reflect their broader delivery roles, until recently they had not been reviewed in their entirety.
The ATO have liaised with external consultants Boston Consulting Group and ChantLink to analyse what drives peoples' satisfaction and dissatisfaction with the services they expect and receive.
As a result of these findings and further consultations, they have developed a new framework called 'service commitments'.
The service commitments are measures of quality, ease and time - the key issues the community believes are important. The five service commitments and the associated key performance indicators will replace, over time, the existing service standards.
The five service commitments are:
- Helpful and accurate
- Easy to deal with
- Timely
- Keep me informed
- Be professional
The ATO have sought feedback from their external scrutineers and they were supportive of this new approach and the emerging design.
In the coming months, you will start to see more emphasis placed on these service commitments as a way of ensuring that they are meeting your expectations. The ATO will be transitioning to the new service commitments over time and will report on both our current service standards and the new service commitments so that clients can see the changes they are making and so the ATO can monitor their performance against them.
Schoolkids Bonus has replaced the Education Tax Refund
The Schoolkids Bonus has replaced the Education Tax Refund (ETR), making it easier for you to receive assistance for education-related expenses.
The bonus is paid automatically into bank accounts so you no longer have to collect receipts and make a claim via your income tax return. Unlike the ETR, you can choose how you wish to spend the payment to meet your child's education needs, whether it is school books, school fees, uniforms or excursions.
As the ETR has been replaced, it cannot be claimed for this or the previous financial year - however, it can still be claimed for past years.
You are eligible if you receive Family Tax Benefit Part A (or certain income support payments) and have a child in primary or secondary school. Each year you will receive $410 for each primary student and $820 for each secondary student, with half paid in January and half in July.
For more information, including full eligibility criteria, visit www.australia.gov.au/schoolkidsbonus
Changes to private health insurance rebate and Medicare levy surcharge
From 1 July 2012, the private health insurance rebate and Medicare levy surcharge are income tested against new income thresholds.
This year, if you have private health insurance:
- Each adult covered, not just the payer of the policy, will receive an annual tax statement
- If they share a policy, they will be income tested on their share of the policy regardless of who pays the premium
- The amount of private health insurance rebate they are entitled to may change
- If they do not have an appropriate level of private patient hospital cover, the rate of Medicare levy surcharge they are charged may increase.
In order for you to receive your correct entitlement, it is important that income information is provided in the 'income tests' and 'spouse' sections of your tax return.
For more information, refer to http://www.ato.gov.au/individuals/content.aspx?doc=/content/00233246.htm
Business viability assessment tool
If you are concerned about whether your business is viable, you can use the Business viability assessment tool available on the ATO website.
The tool applies a number of tests to evaluate financial performance and position. This helps to differentiate between viable businesses experiencing short-term difficulties and businesses experiencing more fundamental, long-term difficulties.
The ATO recognise the critical role in providing advice to you on the management of your business. By informing you about this tool, potentially non-viable or insolvent taxpayers may be prompted to take action earlier, before their debt position becomes unmanageable and while there is still an opportunity to address any viability issues.
For more information, refer to Business viability assessment tool at http://www.ato.gov.au/corporate/content.aspx?doc=/content/00339314.htm&alias=bvat
Centrelink needs to know if you don't need to lodge a tax return
If you receive the Family Tax Benefit and/or Child Care Benefit and are not required to lodge a tax return, you need to let Centrelink know. You will also need to tell Centrelink your end of year income amount.
Family Tax Benefit and Child Care Benefit customers will not have their payments reconciled or their supplements paid until a tax return is received, or they have advised Centrelink that they are not required to lodge a tax return.
Centrelink customers with estimated income from $0 to $18,200 will be contacted in July and asked to update their details online at www.humanservices.gov.au
Some customers may still be required to lodge a tax return for child support or other purposes.
For more information, visit www.humanservices.gov.au
Consolidating the dependency offsets
In the 2012-13 Budget it was announced that eight dependency tax offsets would be consolidated into a single non-refundable tax offset, effective from 1 July 2012. The draft legislation and explanatory memorandum have been released as an exposure draft for public consultation.
The offsets to be consolidated are:
- Housekeeper
- Housekeeper (with child)
- Child-housekeeper
- Child-housekeeper (with child)
- Invalid spouse
- Carer spouse
- Invalid relative
- Parent/parent-in-law.
The changes mean:
- A new offset T7 Dependent (invalid and carer) will only be available to taxpayers who maintain a dependant who is genuinely unable to work due to carer obligations or a disability. This condition means that taxpayers can no longer claim for a housekeeper or child-housekeeper as part of this new offset.
- Clients eligible for the zone/overseas forces tax offset at T5 will not be eligible to claim the new offset. They may be eligible to claim the offsets that have been consolidated. These offsets are not part of the zone/overseas forces tax offset but will be claimed at T5.
- T1 Dependent spouse tax offset can still be claimed in respect of a spouse who was born on or before 30 June 1952.
To help you prepare and meet obligations under the new legislation, visit www.treasury.gov.au
Cars are still on the ATO FBT radar
In September the ATO announced their plans to review car fringe benefits.
Using third-party data, the ATO have identified employers who may have an unreported fringe benefits tax (FBT) liability. Since August 2012, they have contacted 5,000 employers by letter asking them to review their circumstances and to contact them if they have any questions or want to make voluntary disclosures.
Some outcomes of this review are:
- One employer declared four cars, resulting in a payment of over $35,000 in FBT per year. As the employer came forward voluntarily, there were no penalties.
- Another employer found they needed to lodge three years of FBT returns, resulting in a debt of over $200,000.
- Other employers reviewing their situations are identifying other benefits that should have been reported. One employer reported over $40,000 in expense and meal entertainment benefits.
The ATO plan to contact another 10,000 employers by letter in 2013.
Remember, if you make a car available to your employees for private use, they'll probably have an FBT liability.
Your need to be aware that:
- if a car is garaged at home, it is taken to be available for private use
- travel to and from work is generally considered private use.
For more information, refer to Fringe benefits tax - a guide for employers at - http://www.ato.gov.au/businesses/content.aspx?doc=/content/418.htm&pc=001/003/027/002/001&mnu=44774&mfp=001&st=&cy=
Stop phoenix rising
Last year the ATO received new powers, which provide greater protection for certain employee entitlements. Company directors, especially those engaged in fraudulent phoenix activity, now have an increased level of personal liability for unpaid and unreported superannuation guarantee and pay as you go (PAYG) withholding.
In some instances, directors and their associates will now be liable for PAYG withholding non-compliance tax - a tax equivalent to reducing PAYG credit entitlements when the company has not paid amounts withheld to the ATO. The new legislation took effect on 30 June 2012.
They are also working closely with other government agencies to address fraudulent phoenix activity, including:
- Australian Securities & Investments Commission
- Australian Competition and Consumer Commission
- Australian Crime Commission
- Australian Federal Police
- Clean Energy Regulator
- Department of Education, Employment and Workplace Relations
- Fair Work Building and Construction
- Fair Work Ombudsman
- Department of Sustainability, Environment, Water, Population and Communities
- State and territory revenue offices.
By working together and sharing information, agencies are able to strengthen the impact the government has in deterring, detecting and taking action to address this harmful behaviour.
For information on how we are addressing fraudulent phoenix activity, refer to Tax crime.
http://www.ato.gov.au/corporate/pathway.aspx?sid=42&pc=001/001/054/003&mfp=001&mnu=53137
Protecting the community from promoters of tax avoidance schemes
Additional funding announced in the 2012-13 Mid-year Economic and Fiscal Outlook provides more resources for the ATO to protect the community from domestic promoters of tax avoidance and evasion schemes. Implementation of the new measure, which complements Project Wickenby's offshore focus, will occur over four years from July 2013.
As part of the ATO’s commitment to government, they will conduct a large number of reviews and audits of higher risk promoters. Promoter penalty provisions will be applied where there has been a contravention. These activities will also level the playing field for tax intermediaries who apply good governance practices and provide sound advice to clients.
The ATO are looking at networks of domestic promoters with significant and growing spheres of influence. The promoters appear to be designing, marketing and distributing boutique tax avoidance and evasion arrangements tailored to the specific needs of a number of taxpayers who may be induced into participating in these schemes by higher after-tax returns.
If you have any information relating to the promotion of tax avoidance schemes: call the ATO confidential Tax Planning Schemes hotline on 1800 177 006 between 8.30am and 5.00pm, Monday to Friday or email us on reportataxscheme@ato.gov.au.
SMSF statistics: release of 2010-11 overview
In consultation with industry, the ATO have recently released a new SMSF statistical publication to provide a greater understanding of the status and performance of the SMSF sector, which remains the largest Australian super industry sector with over 30% of the $1.4 trillion total super assets.
Self-managed superannuation funds: A statistical overview 2010-11, released in December 2012, was the third publication in this format produced in response to the government announcement that it will support the Super System Review recommendation that the ATO collect and produce a more comprehensive set of SMSF statistics. These reports update the statistical information published by the Super System Review.
The ATO continue to engage with industry and stakeholders to explore the design of their data collection, with a focus on minimising the reporting requirements placed on SMSFs but still producing meaningful results.
SMSF statistical publications for previous financial years are available on the ATO website at: http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00316375.htm&pc=001/149/030/004/002&mnu=49150&mfp=001/149&st=&cy=
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