Seasons Greetings & December Updates

Seasons greetings from Bush & Campbell!

As the festive season draws near, we’d like to take a moment to express our heartfelt gratitude for your continued trust and partnership throughout the year.

We wish you and your loved ones a joyful and relaxing holiday season filled with warmth, laughter, and cherished memories. As we look ahead to 2025, we hope it brings you success, prosperity, and countless opportunities.

From all of us at Bush & Campbell, thank you for being part of our journey. Here’s to a bright and prosperous New Year!

Following are some updates from the Australian Taxation Office (ATO) that may affect your business and personal obligations. Staying up-to-date is crucial to maintaining compliance, maximising tax benefits and avoiding potential penalties.

ATO Guidance on Reporting Small Business Superannuation Contributions

The Australian Taxation Office (ATO) emphasises the critical importance of accurately reporting superannuation contributions by small businesses to ensure compliance with regulations and to avoid potential penalties.

  • Common Mistakes: Errors such as underreporting contributions, missing deadlines, and misclassifying payments can lead to fines and interest charges.

  • Super Guarantee (SG) Obligations: The current SG rate is 11.5%, effective from 1 July 2024. Timely payments are crucial to avoid the Super Guarantee Charge (SGC), which includes interest and administration fees.

  • Reporting Methods: Utilising Single Touch Payroll (STP) facilitates seamless reporting of superannuation contributions, ensuring timely updates to the ATO and reducing compliance risks.

  • Payment Deadlines: Super contributions are due quarterly, by the 28th of the month following each quarter. Adhering to these deadlines helps avoid penalties.

For more details, refer to the ATO's guidance on Super for Employers.

Changes to FBT on Electric Vehicles

The Fringe Benefits Tax (FBT) exemption for certain electric vehicles (EVs) continues to be an attractive benefit for employers, supporting the transition to cleaner energy.

  • Eligibility Criteria: Vehicles must be zero or low-emission, first held and used on or after 1 July 2022, with a first retail sale below the luxury car tax threshold for fuel-efficient vehicles.

  • Plug-in Hybrid Vehicles: From 1 April 2025, plug-in hybrid electric vehicles will no longer qualify for the FBT exemption unless certain conditions are met.

For more details, consult the ATO's Electric Cars Exemption page.

Phasing Out Cheques by 2030

The federal government has announced plans to phase out the use of cheques by 2030, encouraging a transition to digital payment methods. This initiative aims to modernise Australia’s payment systems and support cashless transactions.

  • Transition Plan: Cheques will cease to be issued by 30 June 2028 and will no longer be accepted from 30 September 2029.

  • Support Measures: The government will work with financial institutions to ensure a smooth transition, particularly for those in regional areas or without access to digital payments.

For more details, refer to the Treasury's announcement on the Future of Payments.

Gifting Rules – Age Pension Impact

Centrelink has specific guidelines around gifting money or assets, which can impact eligibility for payments such as the Age Pension. Gifts exceeding certain limits can be classified as 'deprived assets' and will be included in the assets test and income test for five years.

  • Gifting Limits: You can gift up to $10,000 per financial year or $30,000 over five financial years, with no more than $10,000 in any single year. These limits apply whether you are single or part of a couple.

  • Impact on Payments: Gifts exceeding these limits are assessed as deprived assets and may affect your pension.

  • Reporting Requirements: Gifts must be reported to Centrelink promptly to avoid overpayments.

For more information, refer to Services Australia's guidance on gifting.

Stay Cyber-Safe: Protect Your Business from Scams and Cyber Threats

In today’s digital world, businesses are increasingly targeted by cybercriminals. Scams such as phishing emails, invoice fraud, and malware attacks are on the rise. Here are essential tips to safeguard your business:

  • Strengthen Password Security: Use long, complex passwords (e.g., at least 12 characters with a mix of letters, numbers, and symbols), avoid reusing them, and enable Multi-Factor Authentication (MFA).

  • Detect Fraudulent Emails and Phishing Attempts: Train your team to recognise suspicious emails, urgency in requests, poor grammar, and unusual links.

  • Validate Supplier and Payment Details: Verify payment requests directly with suppliers (e.g., by contacting them via a known phone number), and use dual-approval systems for high-value transactions.

  • Train Your Team on Cybersecurity: Regular workshops, phishing simulations, and clear reporting channels can boost awareness.

  • Update and Secure Systems: Keep software updated, back up data regularly, and use reputable antivirus software.

  • Create a Cybersecurity Policy: Establish a written policy on password management, email handling, and reporting procedures.

For more information, visit the Australian Cyber Security Centre (ACSC).

FBT on Christmas Parties and Staff Gifts

With the festive season approaching, it's important to understand the Fringe Benefits Tax (FBT) implications for Christmas parties and staff gifts.

  • Christmas Parties:

    • On Business Premises: If a Christmas party is held on a working day at your business premises and attended only by current employees, the food and drink provided are exempt from FBT. 

    • Off Business Premises or Including Associates: If the party is held off-site or includes associates (e.g., employee partners), FBT may apply unless the cost per person is less than $300, qualifying it as a minor benefit exemption. 

    • Clients Attending: There is no FBT on benefits provided to clients. 

  • Staff Gifts:

    • Non-Entertainment Gifts: Items such as hampers, vouchers, or bottles of wine costing less than $300 per employee may be exempt from FBT under the minor benefits exemption. 

    • Entertainment Gifts: Gifts like tickets to concerts or holiday accommodations are considered entertainment and may attract FBT, even if under $300. 

  • Record Keeping:

    • Maintain detailed records of all expenses related to Christmas parties and gifts, including costs, attendees, and the nature of the benefits, to ensure compliance and assist in determining any FBT liabilities. 

For comprehensive information, refer to the Australian Taxation Office's guidance on Common entertainment scenarios for business.

Concessions: Enhancing Tax Efficiency

Family trusts that have made a valid Family Trust Election (FTE) can access specific tax concessions, offering both benefits and obligations.

  • Tax Concessions:

    • Trust Loss Measures: Simplified recoupment of carried-forward tax losses.

    • Company Loss Tracing: Easier tracing rules for companies with family trusts as shareholders.

    • Franking Credits: More effective distribution of franking credits to beneficiaries.

  • Reporting Exemptions:

    • Exemption from certain Trustee Beneficiary Reporting (TBR) requirements, reducing administrative tasks.

  • Family Trust Distribution Tax (FTDT):

    • Distributions outside the specified family group may incur FTDT at the top marginal rate.

For detailed information, refer to the ATO's guidance on Family Trusts – Concessions.

ATO Support During Financial Hardships and Disasters

The Australian Taxation Office (ATO) offers assistance to individuals and businesses facing financial difficulties or disasters, ensuring compliance and support during challenging times.

  • Lodgement and Payment Assistance:

    • Deferred Lodgement and Payment: The ATO may grant extensions for tax return lodgements and payments for those affected by unforeseen events.

    • Payment Plans: Tailored payment arrangements can be established to manage tax debts effectively.

  • Reconstructing Tax Records:

    • Guidance is available to help reconstruct tax records lost or damaged due to disasters, facilitating accurate reporting.

  • Early Access to Superannuation:

    • Individuals experiencing severe financial hardship may apply for early access to their superannuation funds under specific conditions.

  • Priority Processing of Refunds:

    • The ATO can prioritise the processing of tax refunds for those in financial distress, providing quicker access to funds.

For comprehensive information and assistance, visit the ATO's Tax and Super Support in Difficult Times page.

Superannuation Guarantee for Contractors

In Australia, employers are generally required to pay Superannuation Guarantee (SG) contributions for employees. However, certain contractors may also be entitled to SG contributions if their working arrangement is primarily for their labour.

Determining SG Obligations for Contractors:
A contractor is considered an employee for SG purposes if:

  • Contract Nature: The contract is mainly for their labour (i.e., more than half of the contract's value is for their labour).

  • Personal Performance: They are paid for their personal labour and skills, not to achieve a specific result.

  • No Delegation: They perform the work personally and cannot delegate it to someone else.

If these conditions are met, you must make SG contributions for the contractor. 

Exceptions:

You are not required to pay SG contributions for a contractor if:

  • Business Structure: The contractor is engaged through a company, trust, or partnership.

  • Under 18 Years Old: They work 30 hours or less per week.

  • Domestic or Private Work: They perform domestic or private work for 30 hours or less per week.

Key Considerations:

  • Assess Each Contract: Evaluate each contractor's agreement to determine if it is primarily for labour.

  • Maintain Records: Keep detailed records of contracts and assessments to support your SG obligations.

  • Use ATO Tools: Utilize the ATO's Superannuation Guarantee Eligibility Decision Tool to assist in determining SG obligations. 

Next Steps:

  • Review Contractor Agreements: Examine current contracts to identify those that may require SG contributions.

  • Update Payroll Systems: Ensure systems are configured to calculate and remit SG contributions for eligible contractors.

  • Seek Professional Advice: Consult with a tax professional or legal advisor if uncertain about specific contractor arrangements.

For detailed information, refer to the Australian Taxation Office's guidelines on superannuation for independent contractors.

Cristy Houghton