The superannuation guarantee (SG) rate will increase from 9.5% to 10% from 1 July 2021, and then continue to increase until it reaches 12% on 1 July 2025.

More information can be found here.

5 June 2021

Lodge tax return for all entities with a lodgement due date of 15 May 2021 if the tax return is not required earlier

21 June 2021

Lodge and pay May 2021 monthly business activity statement

25 June 2021

Lodge and pay 2021 Fringe Benefits Tax annual return

30 June 2021

Super guarantee contributions must be paid by this date to qualify for a tax deductions in the 2020-21 financial year.

Individuals

The low and middle income tax offset, available to taxpayers earning less than $126,000 per year, will remain for the 2021–22 income year.

Individual tax residency rules to be simplified under new framework.

The current limitation for claiming a self-education expense, where the first $250 of the allowable deduction is denied, will be removed.

CPI indexed Medicare levy low-income threshold amounts for singles, families, and seniors and pensioners for the 2020–21 year announced.

The childcare subsidy will be increased up to a maximum of 95% from 1 July 2022.

Companies and Business

Temporary full expensing of eligible assets will be extended by 12 months to 30 June 2023.

The temporary loss carry back offset will be extended by one year to apply for 2022–23 income year losses.

Extended powers for AAT to pause or modify ATO debt recovery action for small business taxation decisions.

Superannuation guarantee exemption for employees earning less than $450 in a month will be removed.

Taxpayers with certain intangible depreciating assets will be given the choice of using the statutory effective life or self-assessing the decline in value from 1 July 2023.

Superannuation

From 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making or receiving non-concessional superannuation contributions or salary sacrificed contributions.

From 1 July 2022, the eligibility age to make downsizer contributions into superannuation will be reduced from 65 to 60 years of age.

The maximum amount of contributions that can be released from superannuation under the first home super saver scheme (FHSSS) will be increased from $30,000 to $50,000 from 1 July 2022.

The central management and control safe harbour test for an SMSF to be considered an Australian superannuation fund will be extended from 2 years to 5 years. Also, the active member test will be removed.

By Grace Wong

COVID-19 has affected many aspects of our daily lives however employers may not have thought about the impact on their fringe benefits tax (FBT) liability for the FBT year ended 31 March 2021.

FBT is a tax employers pay on certain benefits they provide directly or indirectly to their employees, including their employees’ family or other associates.

We have summarized below three common FBT exposure areas impacted by COVID-19.

1. Working from home office equipment

Many employers provided their employees with office equipment (e.g. desk, office chair or other equipment that is not a portable electronic device) to promote a smooth transition to working from home.

The FBT exposure depends on how the benefit was provided:

The key difference between (1) and (2) is that the employee returned or will return the equipment to the employer in (1) whereas in (2) the employee keeps the equipment.

Exemptions & Reductions

If an exemption or reduction applies to a fringe benefit, the taxable value of the benefit is reduced by the exempt amount or reduction amount.

If (1) applies, the employer may consider the section 47(3) exemption from the Fringe Benefits Tax Assessment Act 1986: regarding a residual benefit that consists of the use of property that is ordinarily located on business premises and used in connection with business operations. This exemption does not apply to (2) or (3).

For all scenarios above the employer may consider the minor benefits exemption or the otherwise deductible rule. However, under (2) and (3) these exemptions are limited due to:

Minor benefits exemption – cost of the equipment must be less than $300 including GST (whereas under (1) the use of the asset must be equal to less than $300 including GST); and

The Otherwise Deductible rule can only apply if the employee could have claimed an immediate tax deduction for the equipment (rather than depreciation over time) in their personal tax return

2. Cancelled staff functions

Due to COVID-19 some staff functions, for example end of financial year parties, did not go ahead as planned.

However, there is no FBT exposure in relation to non-refundable deposits for staff functions that were later cancelled as:

the transaction was between the employer and the venue (not employees); and

staff did not attend the event therefore no fringe benefit was provided.

Ordinarily entertainment expenses are non-deductible, and the associated GST non-claimable, unless the expense was subject to FBT. Unfortunately, non-refundable deposits for staff functions are still considered to be entertainment expenditure. This means employers cannot claim income tax deductions and GST credits for non-refundable deposits.

3. Employer-provided cars garaged at employees’ homes

When an employer-provided car is parked at an employee’s home, generally the car is considered to be available for private use. This constitutes a car fringe benefit.

The ATO have provided an exemption for cars garaged at employees’ homes due to COVID-19, provided the following conditions are satisfied:

the operating cost (logbook) method is used to value car fringe benefits;

the employer must elect in writing to use this method (rather than the default statutory method);

the car must have been garaged at the employee’s home during the FBT year; and

while the car was garaged at home, it was not driven or it was driven briefly only to maintain the car.

Applying the exemption will result in the number of days available for private use being reduced and therefore a lower taxable fringe benefit for the employer.