In today’s blog, we’ll explore the latest tax news for December 2023. Let’s delve right into recent developments.
ATO’s Lodgment Penalty Amnesty is Nearing Its End
You can take the benefit of ATO’s lodgment penalty amnesty until 31 December 2023. To be eligible for this amnesty, businesses need to meet the following criteria:
- had an annual turnover under $10m when the original lodgment was due;
- have overdue income tax returns, BAS or FBT returns that were due between 1 December 2019 and February 28, 2022; and
- filed between June 1 and December 31, 2023.
When taxpayers file their income tax returns, BAS and FBT returns, failure to file penalties will be remitted without any requirement to apply. Privately owned groups or individuals with above $5m of net wealth are not eligible for this amnesty.
Notice of Officeholder Data-Matching Program
The ATO will get officeholder data from ASIC, the Australian Charities, the Office of Registrar of Indigenous Corporations and the Not-for-Profits Commission for the 2024 and 2025 income years, including information such as:
- their name, DOB and address
- contact details and email address
- organisation class, status and type, and state of incorporation, and
- officeholder type and officeholder role start and end dates.
ATO Warning about Prohibited SMSF Loans
Loans to members continue to be the highest recorded violation of the superannuation laws that the ATO notices in auditor contravention reports. SMSF trustees can’t lend money to a member or relative and if they do, they will have to pay a penalty of up to $18,780. ATO may also disqualify them as a trustee. SMSF trustees also can’t lend money to a related party where the loan value exceeds 5% of the value of the fund’s total assets.
Two Further ‘Boosts’
Although the ‘Technology Investment Boost’ is nearing its end, it is crucial to remember that there are two other boosts offering bonus deductions for small businesses, and both apply to eligible expenses incurred up until 30 June 2024.
The Skills and Training Boost offers small or medium businesses a bonus 20% deduction for eligible expenses incurred on external training for employees to support businesses in training their employees. The boost applies to eligible expenses incurred from 29 March 2022 until 30 June 2024.
The Small Business Energy Incentive is designed to support small business electrification and will apply to eligible expenses incurred between 1 July 2023 and 30 June 2024. This boost offers small or medium businesses with a bonus 20% deduction for the cost of:
- eligible depreciating assets
- eligible improvements incurred concerning existing depreciating assets
- that support efficient energy use.
A business taxpayer needs to meet several conditions to be eligible for either of the above boosts.
Claiming Deductions for a Holiday Home
Taxpayers should keep in mind that they can only claim deductions for holiday home expenses to the degree they are incurred for gaining or producing rental income. They have to take into account the following to check whether the deductions they want to claim are valid rental deductions:
- Taxpayers are not allowed to claim deductions for the time period the property was blocked out or used by them.
- If they used vague means of advertising, or put unreasonable restrictions in the advertisement, they may not be able to claim deductions.
- If the taxpayer’s property is not in a tenantable condition, they may not be able to claim deductions.
- If the property was being used for personal use or kept vacant for private use, then the taxpayer can’t claim deductions for that time period.
- When the taxpayer claims deductions, they must ensure they calculate and divide deductions for the part of the property that is available for rent.
Reminder of December 2023 Quarter Superannuation Guarantee (SG)
Employers should remember that their SG obligations for the quarter ending 31 December 2023, the due date is 28 January 2024. If an employer doesn’t pay the correct amount of SG on time, they will be subject to pay the SG charge that includes a penalty and interest component. For the 2024 income year, the SG rate is 11%.
As a taxpayer, you need to be aware of these types of tax news to avoid any kind of penalty. Moreover, you can come to know about new tax changes if you collaborate with Reliable Melbourne Accountants.