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Tax Update - February 2021



Goods taken from stock for private use by business owners


The ATO has released Tax Determination TD 2021/1 updating the amounts that are acceptable as estimates of the value of goods taken from trading stock for private use by taxpayers carrying on a business personally or in partnership. Such amounts are deemed to be assessable income of the taxpayer.


The determination lists business and has values for adults and children over 16 years and children to 16 years old. The highest assessable amount is for adults in licensed restaurants and cafes and is $4,640 per person, ex GST. The amounts are based on cost.


For companies and trusts FBT and Division 7A would need to be taken into account.



JobKeeper extension


The second JobKeeper extension has started and covers the JobKeeper fortnights between Monday 4 January 2021 and Sunday 28 March 2021.


If eligible, you can register for the second JobKeeper extension until the end of the program. To be eligible you will need to show that your actual GST turnover declined in the December 2020 quarter relative to a comparable period. This is generally the December 2019 quarter.


You might be eligible for the second JobKeeper extension even if you weren’t eligible for the first extension.


There are also different payment rates for your eligible employees in the second extension period – these rates are:


Tier 1 – $1,000 per fortnight (before tax)

Tier 2 – $650 per fortnight (before tax)



Opt out of temporary expensing of assets


The Treasury Laws Amendment (2020 Measures No 6) Bill 2020 recently passed Federal Parliament. Included in the measures is the ability for businesses to opt out of the temporary expenses measures on an asset-by-asset basis.


The opt out may be relevant to sole traders and partners in a partnership deriving a small taxable income who wish to take advantage of tax-free and low income tax thresholds applying to the owners.



JobMaker rules


The JobMaker Hiring Credits statutory rules were recently registered as the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No 9) 2020.


The rules apply to employers for each new job they create over the next 12 months. They must hire an eligible person aged between 16 to 35 years old.


These rules set out:

  • the start and end date of the scheme;

  • when an employer is entitled to a payment;

  • the amount and timing of a payment; and

  • other matters relating to the administration of the payment.

An entity may receive up to $200 per week for each eligible additional employee aged 16 to 29 years and up to $100 per week for each eligible additional employee aged 30 to 35 years.



FBT concessions – car parking and portable electronic devices


From 1 April 2021, employers with an aggregated turnover threshold of less than $50 million will be able to access the FBT exemptions for car parking and portable electronic devices.


This means a qualifying employer will be able to provide more than one portable electronic device in a year. These device include a mobile phone, calculator, personal digital assistant, laptop, portable printer, and portable global positioning system (GPS) navigation receiver.



Working from home deductions


The ATO has updated PCG 2020/3 on working from home, including extending the time frame for individual taxpayer’s (both employees and business owners) claiming the 80 cents temporary “shortcut method” for running costs associated with working from home.


The temporary shortcut method will continue to be supplementary to the 52 cents fixed rate method and the actual cost method of calculating running expenses, with taxpayers able to choose the appropriate method for their circumstances.


If a taxpayer is working from home (due to COVID-19), the shortcut rate of 80 cents per hour can be used up to 30 June 2021 so long as the taxpayer is:

  • working from home to fulfill their employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls; and

  • incurring additional deductible running expenses as a result of working from home.

A taxpayer does not have to have a separate or dedicated area of their home set aside for working, such as a private study.


The shortcut method rate covers all deductible running expenses, including:

  • Electricity for lighting, cooling or heating and running electronic items used for work (for example your computer), and gas heating expenses.

  • The decline in value and repair of capital items, such as home office furniture and furnishings.

  • Cleaning expenses.

  • Phone costs, including the decline in value of the handset.

  • Internet costs.

  • Computer consumables, such as printer ink.

  • Stationery.

  • The decline in value of a computer, laptop or similar device.

A taxpayer does not have to incur all of these expenses, but must have incurred additional expenses in some of those categories as a result of working from home due to COVID-19.


If a taxpayer uses the shortcut method to claim a deduction for additional running expenses, they cannot claim a further deduction for any of the expenses listed above.


Taxpayers must keep a record of the number of hours they have worked from home as a result of COVID-19. Examples include timesheets, diary notes or rosters.


Disclaimer

This information is provided solely for general information purposes and is not intended as professional advice. Readers should not act on the information contained therein without proper advice from a suitably qualified professional.


We expressly disclaim all liability for any loss or damage to any person or organisation for the consequences of anything done or omitted to be done by any such person relying on the contents of this information.

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