Legislation has been passed by parliament on 17 February 2020 that enable the ATO to seek recovery of unpaid GST of a company from its directors. This new law applies from 1 April 2020.

For un-lodged Activity Statements, the ATO can now estimate the entity’s GST and require the amount to be paid within 21 days otherwise the director will become personally liable for the debt.

Recommended Action

Directors should ensure now that they:

Are aware of the GST affairs of their company
Identify any potential risks or exposure
Ensure that the company has adequate controls around its GST accounting and BAS preparation processes
Are aware of any un-lodged Activity Statements
Assess who is the most appropriate person to be the director

If you don’t hold private hospital cover – or are thinking about dropping it – make sure you understand the financial consequences. You could be hit with an extra tax surcharge of up to 1.5% or cost yourself extra premiums in future.

Levies, surcharges and loadings – the terminology around health insurance and tax can be bewildering! But if you don’t hold private hospital cover, you need to understand how this may affect your tax.

The Medicare levy surcharge (MLS) is a tax penalty you must pay if you earn above a certain amount and don’t take out a sufficient level of private hospital cover for you and all of your dependants. It’s designed to give you a financial incentive to insure privately. The MLS is applied by the ATO at tax time and included in your assessment.

After 27 March 2020, AUSKey will be replaced by myGovID and Relationship Authorisation Manager (RAM), giving you a secure, simple and flexible way to access government online services.

Until its retirement, you can continue to use your existing AUSKey to securely access the ATO online services. We recommend that you set up your myGovID and RAM as soon as possible to continue accessing the ATO online services after AUSkey is retired.

Click here to know more about myGovID and Relationship Authorisation Manager.

By Eric Bohl | Newleaf Tailored Financial Solutions

Last year, APRA released sustainability measures to address the Life Insurance industry’s poor performance within the income protection area. APRA is seeking to move to a more sustainable model therefore the industry is required to cease offering Agreed Value cover.

What’s changing?

APRA requires Life Companies to cease offering Agreed Value (and endorsed agreed value) income protection by 1 April 2020. This applies to all policies (including direct) where the sum assured is based on earnings at policy application and does not consider earnings at time of claim, therefore this means Agreed Value, Guaranteed or Flexi-Guaranteed will no longer be available.
Please note, that as a result of these changes, Guaranteed Business Expenses will also be removed.

From 1 April 2020, new contracts will be issued only for Indemnity income protection. Indemnity income protection requires the insured to prove their level of income at time of claim.

How does this affect existing customers with agreed value?

Existing customers with Agreed Value income protection as at 1 April 2020 can continue to maintain and increase their cover as before. There are no new restrictions on CPI increases, increasing level of income protected or underwritten increases.

Act now before 1st April 2020 before it’s too late

If you have a current income protection policy in place and it is not an Agreed Value or Guaranteed contract, please call Eric Bohl at Newleaf on 303 202 70 immediately to have this reviewed to see if you are eligible to have your policy upgraded.