This special edition of our newsletter is to remind you of your 2019 financial year employer obligations and provide you with an update on employment matters:- IMPORTANT CONSIDERATIONS 1. SINGLE TOUCH PAYROLL ("STP") STP is a Government initiative to further simplify business reporting obligations. It is a mandatory reporting requirement for employers and will require employers to report payments such as salaries and wages, pay as you go (PAYG) withholding and superannuation information to the Australian Taxation Office (“ATO”) directly from their payroll systems at the same time employees are paid. It will eventually apply to every payroll system in Australia.

The Federal Budget has been delivered and has focused on infrastructure and essential services spending as well as income tax relief for low and middle income earners and business tax relief. Unsurprisingly (on the eve of a federal election), the budget is a somewhat safe and uneventful one, and rather than containing any major changes to the current tax base, has focused on minor tweaks and changes to what we already have. As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect. Parliament won’t consider these announcements until after the Federal election, expected in May this year, so more than normal, the passage from announcement to legislation is uncertain.

The FBT year ends on 31 March 2019 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists, an annual return is required to be lodged and any tax paid by 21 May 2019. However, if the return is lodged electronically by a Tax Agent the due date of lodgement is 25 June 2019 while the payment due date is 28 May 2019.

In our May 2018 special edition newsletter, we discussed the tax policies of the major political parties in Australia at that time. This was back when newspapers and online media were fervently covering the major issue being proposed by the Labor party; that of cancelling tax refunds arising from excess imputation (or franking) credits. As the Federal election is drawing ever nearer (and the prospect of a change in Government seems ever more likely!) we thought that we should revisit some of the more significant policy proposals as some of you may be substantially affected by them if they become law (and could apply from 1 July this year!)

Welcome to the Special Land Tax edition of our client newsletter for January 2019 where we hope to keep you informed of the important land tax compliance issues affecting owners of land in Australia. Click here to download the newsletter.

A wage subsidy is a financial incentive of up to $10,000 (GST inclusive) to help eligible businesses hire new staff. Employers can access a wage subsidy if they: have an Australian Business Number (ABN) have not previously received a wage subsidy for the same person are not an Australian, state or territory government agency offer a job that is expected to be ongoing and for an average of 20 hours per week over the six months of the wage subsidy agreement offer a job that complies with employment standards for the position - for example, is suitable work and pays as a minimum the national award wage.

The Tax Office has earmarked home office expenses as a key focus area this tax time, citing a lack of education contributing to a high amount of mistakes, errors, and questionable claims. According to the ATO a record $7.9 billion in deductions for ‘other work-related expenses’ were claimed by 6.7 million taxpayers last year, with the Tax Office noticing a rise in expenses related to working from home. With increasing numbers of employees working from home, extra costs related to home office could be deductible, but the

The ATO has recently revised its guidance on how fringe benefits tax (“FBT”) applies in relation to the private usage of work vehicles. Previously the ATO issued a definitive list of eligible work-use vehicles (typically tradie, dual cab and panel vans etc), but from 1 April 2017 this list has been withdrawn and employers now have to self-assess. In the past this law has always been about minor, infrequent travel for work vehicles, but this new ATO guidance puts the onus very much on the employer to prove that work cars are not used just as a perk to retain and attract staff. The ATO’s guidelines now suggest that a vehicle’s private use cannot exceed 1,000km in a year, and no return journey can exceed 200km. This is thought to be much more restrictive than previously understood. While home to work travel is generally not considered private for these work vehicles, according to these new guidelines, any trip in which a home to work route varies by more than 2km will be considered a personal trip. This new approach will potentially catch many employers unaware as they have in the past assumed that “work vehicles” (ie on the eligible vehicles list), means no FBT. Our advice to clients who provide these work vehicles to employees is to make sure you have a policy on work-related vehicles and make sure you can monitor how it is enforced.

From 1 July 2018, GST applies to sales of low value imported goods (valued at $1,000 or less) to consumers in Australia. This measure attempts to treat such imported goods in the same way as goods purchased domestically. Australian retailers need to be careful with this new law to ensure that they aren’t incorrectly charged GST by overseas suppliers. Overseas suppliers, if they have to register for GST, can get what is called a simplified GST registration. This means that they don't have to obtain an ABN and they can't claim input tax credits, but they don't have to issue a tax invoice to the Australian retail

For the information of clients we enclose this checklist which you may find helpful in planning your year-end tax strategies. Click here to read our end of financial year newsletter providing a Tax planning checklist.

The tax and superannuation highlights of Tuesday night’s Budget are summarised below:- Personal income tax measures Immediate tax relief for low and middle income earners The Low and Middle Income Tax Offset will provide a benefit of up to $200 for taxpayers with a taxable income of $37,000 or less. Between $37,000 and $48,000 the offset will increase at a rate of 3 cents per dollar to the maximum benefit of $530. From $90,001 to $125,333 the offset will phase out at the rate of 1.5 cents per dollar. Lifting tax brackets to protect taxpayers from ‘bracket creep’ and eliminating the 37% tax bracket. The following tables summarise the proposed tax bracket changes:

You may have read a lot in the media recently about the different tax policies and proposals coming out of the major Australian political parties. To help you understand these policies and potentially the tax changes that are coming, we thought you’d appreciate a summary and brief explanation of them to be better informed for the future. Click here to read our May 2018 newsletter discussing the key differing tax policies between the major political parties.