ATO Small Business Tips: June 2022
Start the new financial year on the right foot
Be prepared this tax time to start the new financial year on the right foot. Check if there are any concessions you can access before 30 June. For example, you may be eligible for the small business restructure rollover concession so you can save on capital gains tax, or the increased small business income tax offset which is 16 per cent from 2021–22 for unincorporated entities. Find out more at ato.gov.au/concessionsataglance.
The STP reporting exemption for small employers’ closely held payees ended on 30 June 2021. From 1 July 2021, amounts paid to closely held payees must be reported through Single Touch Payroll (STP). Small employers (19 or fewer payees) can choose to report payments to closely held payees on or before the date of payment, actual payments quarterly or a reasonable estimate quarterly. See Small employers – closely held payees.
Single Touch Payroll
Single Touch Payroll (STP) reporting has been expanded – this is known as STP Phase 2.
Resources are available to help employers understand the changes and prepare for STP Phase 2 reporting. These include:
- a factsheet outlining the key changes, and the benefits for employers and their employees of STP Phase 2 reporting
- checklists to help employers and tax and BAS professionals prepare for STP Phase 2 reporting
- detailed employer reporting guidelines which outline the requirements of STP Phase 2 reporting
- recordings of webinars discussing the changes in detail with industry professionals providing practical examples and suggestions to help prepare.
It’s important that employers understand the changes, are preparing to report the additional information and follow their providers’ instructions.
TPAR – check if you need to lodge
As you prepare for the new financial year, check if you need to lodge a Taxable payments annual report (TPAR) this year to report payments to contractors for certain services. Get ready to lodge by 28 August to avoid penalties for failing to lodge on time. If you don’t need to lodge this year, submit a Non-lodgment advice to let us know and avoid unnecessary follow up. See www.ato.gov.au/TPAR for information to help you work out if you need to report and how to lodge.
Pay as you go (PAYG) instalments are regular prepayments of the tax on your business and investment income. If you earn business and investment income over the entry threshold, the ATO may automatically enter you into PAYG instalments. The ATO will let you know when you have entered the PAYG instalment system, what you need to pay and your lodgment dates.
We continue sending out notices advising of our intent to report business debts to credit reporting bureaus. We have also made an additional small number of disclosures. It is encouraging to see the level of engagement from taxpayers who have been contacted.
Check your GST classifications on health products
If you are supplying nutritional supplements, analgesic products, or wound care, you may need to include goods and services tax (GST) in the selling price. To find out more information, visit the respective linked pages.
Debts on hold
From June 2022, the ATO will recommence offsetting any tax refunds or credits to pay off debts previously on hold. Some businesses may find that their tax refund is less than expected. A debt on hold is one we have not taken action to collect and is not visible on your account but can be re-raised if your circumstances change. You can find out more including how to view any debts on hold at http://www.ato.gov.au/debtsonhold. Businesses facing difficulty meeting their obligations are encouraged to contact the ATO or their registered tax professional to discuss help and assistance available.
Removal of the $450 per month threshold for super guarantee eligibility
From 1 July 2022, employees who earn less than $450 in a calendar month (before tax) will now be eligible to receive super guarantee, regardless of how much they are paid. Employees who are under 18 will still need to work more than 30 hours in a week to be eligible for super guarantee, which has not changed. The ATO will update advice and guidance, including their online tools and calculators on 1 July 2022 to account for this change. For more information, visit ato.gov.au/PayingSuper.
Super guarantee rate increase
The super guarantee rate will increase from 10 per cent to 10.5 per cent on 1 July 2022. The rate of 10.5 per cent will need to be applied for all salary and wages paid on and after 1 July 2022, even if some or all of the pay period it relates to is before 1 July 2022. You’ll need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate. The scheduled rate increases and dates can be found at ato.gov.au/SuperRate.
The end of 2022 fringe benefits tax (FBT) time is fast approaching
For self-preparers lodging via paper the due date to lodge and pay your FBT has now passed. This means you have now missed the lodgement date. To avoid penalties you should lodge your FBT return and pay any FBT liability as soon as possible.
If you’re using a tax agent to lodge your FBT return electronically, the due date to lodge and pay is 27 June.
If you think you’ll need an extension, contact your tax agent or phone the ATO on 13 28 66.
For more information, visit 2022 Fringe benefits tax (FBT) return.
CGT exemptions for granny flat arrangements give eligible people the right to occupy a property for life. To be eligible there must be a written agreement in place between the property owner and the elderly or disabled people. Find out more at ato.gov.au/grannyflat
Investments come in many forms, from rental properties, shares, managed investment funds and more recently crypto assets. For capital gains tax (CGT) purposes, you declare capital gains or capital losses in the year a CGT event occurs. Disposals of capital assets are CGT events and include destruction, selling, donating, gifting, swapping and so on.
- claim paper losses (when an asset you still own decreases in value)
- offset capital losses against your other income like salary or wages.
Remember to include your net CGT losses in your tax return in the year they occur, you can carry capital losses forward to offset capital gains you make in the future.
For more detail, visit the ATO website at Using capital losses to reduce capital gains
Cessation of employment removed as taxing point for employee share schemes
The cessation of employment deferred taxing point for employee share schemes (ESS) no longer applies. The removal of the deferred taxing point will only affect ESS interests when an employee ceases employment on or after 1 July 2022. Read more about the removal of this taxing point and how other taxing points under a tax-deferred scheme still apply.
PCG 2017/13 Division 7A – PS LA 2010/4 sub-trust arrangements maturing in or after the 2016-17 income year
The ATO has extended the application of this Guideline to trust entitlements, created on or before 30 June 2022, that are placed on sub-trust arrangements maturing in 2022 and later income years.
Webinars to help you perform better
There are many online services and digital systems that can help you perform your business activities such as marketing, sales, accounting and reporting.
We are offering two webinars to help you brush up on your skills:
■ Digital options for your business: Join this 60-minute session to find out the benefits of digital systems and what systems are available for each area of your business operations.
■ Connecting online with the ATO – Businesses: In this 60-minute session you will learn how to register, lodge and pay online for goods and services tax (GST), pay as you go withholding, pay as you go instalments, and more using Online services for business.
Next step: Register for Key webinar topics for small business