Year End Tax Planning

As we approach the end of the financial year it’s a good time to start thinking about what you could do to minimise your tax liability.

What’s new for 2022?

  • The concessional cap for superannuation contributions has increased from $25,000 to $27,500 for the 2022 financial year. Don’t forget, to claim the deduction, your super fund will need to have received the contribution prior to 30 June and you will need to provide them with a notice of intent to claim a deduction.
  • The ATO has released a Tax Ruling and Taxpayer Alert which outlines their interpretation with regards to key legislative provisions which govern trust distributions amongst family groups. Where this impacts your group, we will be in touch to discuss in more detail.
  • The ATO has also released guidelines which outline where the ATO considers the allocation of profits from professional practices to be low, medium, or high risk. Again, if this impacts your business, we will be in touch to consider how we apply these guidelines to your practice.

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Federal Budget 2022-2023

Cost of living relief but is there anything for small business?

In a surprise to no one, this Federal Budget has a huge focus on the cost of living, and provides relief for individuals and families for this to the tune of $8.6 billion.

Specifically, the announced cost of living relief includes:

  • fuel excise being cut by 22c per litre for the next six months (starting now),
  • An additional payment of $420 to be paid as part of the Low and Middle Low Income Tax Offset (LMITO) and
  • A one-off $250 payment for those on the pension and some government welfare payments.

It was very much a pre-election budget with the impact of the above announcements to occur either immediately (fuel excise) or before the budget ($250 payment).  The flow of funds from the LMITO changes won’t be available until 2022 tax returns are lodged. It is expected the law will be passed soon.

The Federal Government has had to walk a very delicate balance between providing cost of living relief and trying not to add to the increasingly problematic inflationary pressure building within Australia.  No doubt the Reserve Bank of Australia will be watching closely and considering how future interest rate movements play into the current economic situation.

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Financial support for individuals in South Australia

Whilst there has been a lot of publicity surrounding the grants made available by the SA State Government for businesses that have been adversely impacted by the current Covid outbreak, it’s important to remember that there are also payments available, in limited circumstances, to individuals.

There are two payments available to individuals in SA – the Federal Government Pandemic Disaster Leave Payment and the SA COVID-19 Testing (Cluster) Isolation Payment.

It is important to note upfront that the eligibility requirements for these payments are stringently applied and they are continually being tweaked. The below includes as much detail possible based on Government information available on 18 January 2022.

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Financial support for South Australians

Just after Christmas, the State Government announced further health restrictions due the impact of the Omicron variant of Covid.  These rules were specifically introduced for businesses in tourism and hospitality and gyms, and focused mainly on density limits.

On 31 December, the State Government announced financial support packages targeted at businesses in the industries impacted by the restrictions.  They also announced a “business hardship grant” which is available to businesses who aren’t in tourism, hospitality, or a gym but have been significantly impacted by Covid restrictions. Further detail is provided below regarding these grants.

There are also many South Australians contracting Covid which means they may be eligible for the Pandemic Leave Disaster Payment which is a Federal Government payment made available to people who are unable to work due to having the virus or having to care for someone with the virus.

There are a number of eligibility criteria for both the business and individual payments.

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Are you a director of a company?

If so, you need to apply for a Director Identification Number

The Government has recently passed legislation which requires a director of a company to have a “director identification number” (or Director ID).  This has been introduced to try and stop fraudulent behaviour by directors and in particular involvement in illegal phoenix activities.

This has been proposed for quite some time, with …

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