National Charities and Not-for-Profits – a round up of challenges and reforms

Charities and Not-for-Profits (NFPs) face a number of challenges, including the overhand of 2020 (increased demand and reduced fund raising activities. Measures which could assist them, in a regulatory sense, would be reductions in ‘red-tape’ including: abolishing the ‘public fund’ requirements for DGRs; integrating the charities and non-charity NFP registers; harmonising state and federal exemptions…

‘Temporary full expensing’ and ‘Backing business investment’ – ATO Schedule for Substituted Accounting Period (SAP) taxpayers or lodging a part year tax return

On 20 April 2021, the ATO released the schedule to be used by individuals, companies, partnerships, trusts and AMITs who are claiming a deduction or opting out of temporary full expensing or backing business investment, who have a ‘Substituted Accounting Period (SAP) or are lodging a part year return, to notify the ATO that they are…

Instrument to extend Director ID transition period, for new directors, to match existing directors – 4 Nov 2021 to 30 Nov 2022

The Government registered 2 legislative instruments on 29 April 2021 relating to the director identification regime, extending the time directors need to register so that it is now form 4 April 2021 to 30 November 2022 – beware, this is all current and future directors. See below for further details. [Tax Month – April 2021]    …

Cof T v Apted (Retrospective ABN start date JobKeeper decision) – ATO issues Decision Impact Statement accepting thrust of decision and amending PS LA 2020/1 accordingly

On 29.4.21, the ATO issued a Decision Impact Statement (DIS) on the JobKeeper case: CofT v Apted, where the Full Federal Court upheld an application for an ABN, with a retrospective start date, prior to the 12 March 2020 date, was effective. The Commissioner recognises the broad effect of the decision and has amended his…

Coal of Queensland Pty Ltd v Innovation and Science Australia – R&D: surveys and drilling activities by coal miner not ‘core R&D activities’ or ‘supporting R&D activities’ – appeal dismissed

On 23.4.21, the Full Federal Court has upheld a decision that certain activities designed to make extracting coal from particular deposits commercially viable were not “core R&D activities” or “supporting R&D activities” for R&D income tax purposes. See below for further details. [Tax Month – April 2021]     The taxpayer wanted to develop new…

Birdseye v Tax Practitioners Board – Board’s de-registration decision upheld (non-compliance with personal affairs) but 5-year ban set aside (ATO/TPB findings largely rejected)

On 20 April 2021, the AAT affirmed decisions of the Tax Practitioners Board (TPB) to cancel the tax agent registrations of an individual (Mr Birdseye) and a company he controlled (Claim IT (SA) Pty Ltd), but has set aside a 5-year ban on applying to be registered again. Nick Birdseye practiced in Adelaide and might be…

‘Your Future, Your Super – Exposure Draft of Amending Regs to effect – Single Default Accounts, Underperforming funds disclosure & sanctions, improving accountability at annual members’ meetings etc.

On Wed 28.4.21, Treasury released 3 sets of exposure draft regulations proposing to support the Government’s Your Future, Your Super (YFYS) package of super reforms announced in the 2020-21 Budget. The Regulations will:    (1) Outline the methodology for the annual performance test and re-opening test, as well as requirements for notifications to members;   (2) Prescribe the definition…

Superannuation: Excess non-concessional contributions cap ($110k) – ATO post explaining options and procedures

On 27 April 2021, the ATO posted an article on it’s website headed: ‘If you exceed your non-concessional contributions cap. This refers to the $110,000 cap on non-concessional contributions to a complying superannuation fund. It sets out the two options available to you – the first being to take your non-concessional (post tax) money out…

Illegal “phoenix” activity – 62 year old charged with dishonestly arranging for insolvent entities to incur $850 of PAYGw which was not paid to the ATO

On Tues 27.4.21, the ATO posted a statement on its website, about a 62 year old man who has been charged for illegal “phoenix” activity. The Serious Financial Crime Taskforce (SFCT) investigation, led by the ATO and the AFP, alleges that the man did not remit PAYG withheld from employees’ wages to the ATO, totalling $845,066.…

‘Client identity verification’ will become mandatory, after a voluntary phase-in, for ‘Tax Practitioners’ dealing with the ATO – Consultation Paper proposes guidelines

On 27.4.21, the ATO released a consultation paper seeking feedback from the tax profession on its proposed guidelines that set a minimum standard on due diligence for tax practitioners when engaging new clients, or where there is suspicion that a client may have had their identity compromised. These guidelines are set to address the growing risk of identity…