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09 Sep 2021 Business Measures

Your guide to claiming a temporary full expensing deduction

Temporary full expensing supports businesses and encourages investment, as eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the income year it is first used or installed ready for use for a taxable purpose.

The ATO has released a series of videos to help you understand the temporary full expensing measure, including how to calculate your deduction:

More information on temporary full expensing can also be found here.

Your guide to claiming the loss carry back tax offset: Video series

You cannot claim the tax offset in your Company tax return 2020 for a tax loss made in the 2019–20 income year. You can claim the tax offset in your Company tax return 2021 or Company tax return 2022.

If you want to claim the tax offset for an income year, you will need to make the loss carry back choice by the time you lodge your company tax return for that year. When making the choice, you will also need to specify the amount of tax loss you choose to carry back.

The ATO has released a series of videos to help you understand loss carry back, determine if you're eligible and, if so, how to make a claim:

Family trusts – concessions

A family trust for tax purposes is one whose trustee has made a valid family trust election (FTE). It is not sufficient to simply include the words ‘family trust’ in your trust's name.

A trustee only makes a valid FTE where they have satisfied the relevant tests, and made an election in writing in the approved form. Once the election has been made, it cannot be varied or revoked except in limited circumstances.

Concessional treatment applies to some transactions where trusts have validly elected to become family trusts.

More information can be found here.

Private health insurance – income thresholds frozen

The income thresholds and rates used to calculate your clients’ Medicare levy surcharge and private health insurance rebate will remain unchanged between 1 April 2021 and 1 April 2023.

Focus on CGT asset disposals

Remind your clients to report asset disposals for capital gains tax (CGT). This will help to avoid errors on CGT on shares, property and cryptocurrency.

Find out about STP Phase 2 changes

You will need to start sending additional payroll information through Single Touch Payroll (STP) from 1 January 2022. This is known as the STP expansion, or STP Phase 2.

The ATO is hosting a webinar series to explain the changes in detail. 

Next 5,000 private groups tax performance program

The Next 5,000 tax performance program is funded by the Tax Avoidance Taskforce and seeks to give the community confidence that Australia’s largest privately owned and wealthy groups are paying the right amount of tax.

More information on who is covered by this program and how the justified trust methodology applies to your review can be found here.

Preparing for your Next 5,000 streamlined assurance review

If you are selected for a Next 5,000 streamlined assurance review, this page will help you prepare by outlining the evidence the ATO will typically ask you to provide at the start of a review.

General interest charge rates

The general interest charge (GIC) rates have been updated to include rates announced for the October to December quarter of the 2021–22 income year:

Quarter

GIC annual rate

GIC daily rate

October – December 2021

7.01%

0.01920548%

July – September 2021

7.04%

0.01928767%

 

Shortfall interest charge rates

The shortfall interest charge (SIC) rates have been updated to include rates announced for the October to December quarter of the 2021–22 income year. 

Quarter

SIC annual rate

SIC daily rate

October – December 2021

3.01%

0.00824657%

July – September 2021

3.04%

0.00832877%

 

Foreign exchange rates

The foreign exchange rates have been updated to include monthly rates from the Reserve Bank of Australia for August 2021.

Loss carry back tax offset

Loss carry back provides a refundable tax offset that eligible corporate entities can claim:

  • after the end of their 2020–21 and 2021–22 income years
  • in their 2021 and 2022 company tax returns.

Eligible entities get the offset by choosing to carry back tax losses to earlier income years in which there were income tax liabilities. The offset effectively represents the income tax the eligible entity would save if it was able to deduct the loss in the earlier income year using the loss year tax rate. As it is a refundable tax offset, it may result in a cash refund, a reduced tax liability or a reduction of a debt owing to the ATO.

More information can be found here.

Cash flow boost for employers – schemes to artificially create or inflate entitlements

The ATO is aware of schemes that may be used to artificially create or inflate an entitlement to the cash flow boost. These include artificial:

  • business restructures that attempt to create eligibility for the cash flow boost
  • arrangements to split a business which exceeds the $50 million aggregated turnover threshold, in order to create eligibility for both parts of the business
  • re-characterisation of payments to salary and wages to maximise the cash flow boost.

The ATO will be actively reviewing entitlements to the cash flow boost. If the ATO identifies that you have entered into a scheme to artificially create or inflate entitlements to the cash flow boost you will either not receive any cash flow boost or be required to repay any overpaid amounts.

More information can be found here.

Key dates for September 2021

21 September:

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