Reminder: Single touch payroll starts 1 July 2018
As mentioned in various previous Top Tax Tips, from 1 July 2018, the Single Touch Payroll (STP) system will be compulsory for all employers (that have 20 or more employees at 1 April 2018) to report payments such as salaries and wages, pay as you go (PAYG) withholding tax and superannuation information directly. The reports must be sent electronically to the ATO at the same time they pay their employees.
Furthermore, information reported through STP will be pre-filled into business activity statements; i.e. employers will no longer be required to provide payment summaries to individuals or a payment summary annual report to the ATO.
We understand that some organisations are currently marketing their skills of being able to assist employers with all their STP issues – that is quite a bold promise – especially because the ATO has not yet finalised precisely how the STP system will work. We will advise all of our clients as soon as more precise details about the STP are known.
Please be assured that we will assist you to transition to STP - by assisting you to align the reporting of PAYG and superannuation contributions to the payroll process - as well as determine whether your payroll solution is STP-enabled (by following appropriate guidance once released).
No more travel expense deductions to inspect residential rental property
From 1 July 2017, individuals, discretionary trusts and SMSFs will no longer be able to claim a tax deduction for travel expenses (e.g. motor vehicle expenses, taxi or car hire costs, airfares or public transport costs or meals or accommodation related to the aforementioned travel) incurred to inspect residential rental properties.Such disallowed travel deductions will also not be included in the cost base or reduced cost base of the rental property when calculating whether any assessable capital gain has been made on the disposal of the property.
However, taxpayers will still be able to claim travel expenses to inspect commercial premises and residential premises used to carry on a business.Property management expenses paid to real estate agents (which may involve real estate agents incurring travel expenses to inspect the residential rental property) will still be deductible.
Superannuation: Ensure you only have $1.6m in pension phase by 31 December
Under transitional rules, SMSF members who have exceeded their $1.6 million transfer balance pension cap by $100,000 or less by 1 July 2017, have until 31 December 2017 to rectify the situation.If not rectified by the due date, members will receive an excess transfer balance determination and incur excess transfer balance tax from the ATO in January 2018.
If you are in excess of the $1.6 million transfer balance cap, please speak to us about possible ways to debit your transfer balance account or whether any alternative strategies are available to legally avoid the excess transfer balance tax.