As always there are a lot of things to consider for the end of financial year and starting a new financial year so we have put together some tips below to help.
Single Touch Payroll – Phase 2
We are aware the ATO has sent correspondence to businesses to remind them they will need to start reporting additional payroll information as part of their STP Phase 2.
STP2 started on 1 January 2022 however MYOB, Xero and other software providers were not able to update their systems in time so applied for a deferral with the ATO.
MYOB and Xero both have a deferral until 31 December 2022 which means businesses using these software’s have until this date to opt into STP2. If you are using another software for your STP reporting then we recommend checking when they will be STP2 ready.
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.
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.
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.