Following the flurry of new tax rates and super changes that commenced on 1 July 2017, the ATO has moved back into more traditional territory with its announcements in the new financial year.
Here’s a roundup of what’s new in the tax world:
SMSFs to prepare for more reporting
The ATO has announced additional information on its new self managed super fund (SMSF) ‘event-based reporting’ regime. With a planned start date of 1 July 2018, the regime will require SMSFs to file a new report called a Transfer Balance Account Report (TBAR).
Where an SMSF member is also a member of an Australian Prudential Regulation Authority (APRA) regulated super fund, the new reporting requirements took effect from 1 July 2017.
TBARs are separate to the traditional SMSF annual return and are designed to allow members who are close to their $1.6 million transfer balance cap to get timely information to help them make any necessary adjustments.
The new report will cover credits and debts affecting SMSF members’ transfer caps. SMSFs will need to submit a report to the ATO within 10 business days after the end of the month when a pension is commuted in part or full, or when a rollover occurs. If an SMSF pension is commenced, the TBAR must be submitted within 28 days of the end of the quarter in which the event occurs.
If you would like more information please give Venture Financial Advisers a call on 03 5434 7600.
Vehicle thresholds change
From 1 July 2017, new threshold limits apply for vehicle depreciation claims to reflect the upward movement in prices. For the 2017/18 financial year, the upper limit on the amount that can be claimed as depreciation for the business use of a vehicle is $57,581. Taxpayers must use the threshold figure that applied in the year they first used or leased their car.
The threshold for luxury cars also increased for the new financial year, to $65,094. The threshold for fuel efficient luxury cars remains at $75,526.
Focus on work related expenses
With the cost of deductions for work related expenses ballooning to almost $1.8 billion last year, the ATO has announced it will now be giving these expense claims much closer scrutiny.
Clothing and laundry expenses in particular have increased around 20% over the past five years. According to the regulator, many taxpayers are claiming for ineligible clothing, lodging claims without having spent the money, and claiming without being able to explain the basis for calculating the expense.
The ATO has pointed to common myths such as deductions can be claimed for everyday clothing worn to work, or because an employer has a dress code or requires staff to wear a certain colour. Deductible expenses are only for occupation specific clothing, protective clothing or a uniform unique to the organisation.
Claiming a ‘standard’ deduction of $150 without spending money on appropriate clothing or laundry is also asking for trouble, as taxpayers must be able to show how they calculated their deduction.