ATO'S focus areas for tax time 2022

 At a glance

Over the past few years, the Australian Taxation Office has maintained a sharp focus on work-related expenses, rental property deductions, cryptocurrency and the private use of business assets.

Incorrect claims often stem from poor record-keeping, a lack of awareness around tax obligations and a misunderstanding of the rules.

Tax practitioners are advised to start helping clients set some new financial year resolutions, such as investing in digital accounting software, considering e-invoicing and improving their record-keeping.

Completing the tax return

The range of services provided by tax agents expands each year, and it’s a good idea for practitioners to regularly review their letters of engagement.

This may include whether or not the practitioner will perform any follow-up action required by the client or the ATO, or whether the engagement includes assurance of tax records.

The ATO is gathering and data-matching more information than ever. Maximise the use of information that is available and ask clients about unexpected items or large variations from prior years.

Game of balance

Important Super Changes Starting 1st July 2022

 

The ATO will be communicating with over 1 million employers. Most will receive this information by email.

The changes that the ATO are advising business owners of are:

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The rate of SG is increasing from 10% to 10.5%.

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The $450 per month eligibility threshold for when SG is paid is being removed.

Employees – paid above minimum or above Award rates

A person who is paid above the minimum or award wage could, subject to your employment agreement or industrial conditions, have their rates reduced so that their total remuneration including the increased superannuation amount does not change. Accordingly their gross wage and net wage could reduce by the full increase in super or in part. Note any change to rates cannot result in the employee being paid less than the minimum or award rate.

Increase in SG rate

The minimum SG rate is currently legislated to gradually rise from 10.5% to 12% per cent over the next four years.
• Year starting 1st July 2022: 10.5%
• Year starting 1st July 2023: 11%
• Year starting 1st July 2024: 11.5%
• Year starting on or after: 1st July 2025 12%

Planning

The cashflow impact upon your business should be considered.

A start point is to plan for a 0.5% increase in your cost of employment.

We note that your workers compensation and if applicable your payroll tax obligations will also increase as a result of this change.

You should be cognisant of this increase when considering any other increases to remuneration for your employees.

https://www.ato.gov.au/Business/Super-for-employers/?=redirected_superforemployers