The first COVID-19 vaccination in Australia rolled out on 21 February 2021. With the rollout, comes a thorny question for employers about individual rights, workplace health and safety, and vaccination enforcement. The rollout, managed in phases, is expected to complete by the end of 2021 (you can check your eligibility here). While the Australian Government's COVID-19 vaccination policy states that vaccination "is not mandatory and individuals may choose not to vaccinate", this does not mean that there will not be punitive initiatives for those failing to vaccinate including proof of vaccination to move across borders. Australia for example already has a precedent with "No Jab, No Play" policies in place to access child care payments (the ability to object to vaccination on non-medical grounds was removed from 1 January 2016). There are currently no laws or public health orders in Australia that specifically enable employers to require their employees to be vaccinated against coronavirus. However, it is likely that in some circumstances an employer may require an employee to be vaccinated. Can an employer require an employee to be vaccinated? For most employers, probably not. The Fair Work Ombudsman, however, states that there are "limited circumstances where an employer may require their employees to be vaccinated." These are: The State or Territory Government enacts a public health order requiring the vaccination of workers (for example, in identified high-risk workplaces or industries). An agreement or contract requires it – some employment agreements already require employees to be vaccinated and where these clauses exist, they will need to be reviewed to determine if they also apply to the COVID-19 vaccine. A lawful and reasonable direction – employers are able to issue a direction for employees to be vaccinated but whether that direction is lawful and reasonable will be assessed on a case by case basis. It's more likely a direction will be "reasonable" where, for example, there is an elevated risk such as border control and quarantine facilities, or where employees have contact with vulnerable people such as those working in health care or aged care. If an employee refuses to be vaccinated on non-medical grounds in a workplace that requires it, standard protocols apply. That is, the employer will need to follow through with disciplinary action - there are no special provisions that enable suspensions or stand-downs for employees who refuse to be vaccinated against COVID-19. Can an employer require evidence of vaccination? In general, an employer can only require evidence of vaccination if they have a lawful and reasonable reason to do so. Requesting access to medical records and storing data of an individual's medical information will also have privacy implications (see the Office of the Information Commissioner for more details). Your immunisation history is already accessible through your myGov account when it is linked to Medicare. The Express Plus Medicare app enables you to access this information on your phone. More details are expected shortly on Australia's "vaccine passport" that will enable the quick identification of an individual's vaccination status. Israel's "Green Pass" for example uses a simple QR code but there are already concerns that it is easily forged. Can we require customers to be vaccinated? Some high-risk industries are likely to require customers to be vaccinated or where they cannot be vaccinated, subject to heightened measures such as quarantine and/or testing. Qantas CEO Alan Joyce recently told A Current Affair, "We are looking at changing our terms and conditions to say, for international travellers, that we will ask people to have a vaccination before they can get on the aircraft." Qantas is expected to release its position middle-to-end 2021 on domestic and international travel. For employers in high-risk industries, it's important to maintain a conversation with employees and consult an industrial relations specialist if your workplace intends to require vaccinations for employees and/or customers. The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.

Small businesses and not-for-profits in NSW are now able to apply for rebates of up to $1,500 thanks to a new rebate scheme aimed to offset NSW and local government fees. Launched on 1 April 2021 and lasting until 30 June 2022, the Small Business Fees and Charges Rebate scheme is aimed at small businesses, not-for-profits and non-employing sole traders that have a wages bill coming in below the $1.2 million 2020-2021 payroll tax threshold and can provide a turnover declaration (accountant's letter) showing at least $75,000 per year. If you are a sole trader, the owner of a small business or a not-for-profit organisation in NSW, you may be eligible for a small business fees and charges rebate of $1500. This rebate helps businesses recover from the impacts of COVID-19 and encourages growth by reducing the cost of running a business. Eligible businesses or not-for-profits only need to apply for the rebate once but can submit multiple claims until the full value of $1500 is reached. Funds can be used to offset the costs of eligible NSW and local government fees and charges. These include, but are not limited to: food authority licences liquor licences tradesperson licences event fees outdoor seating fees council rates. The rebate can only be used for eligible fees and charges due and paid from 1 March 2021. It cannot be used for fines or penalties, fees and charges that have the key purpose of discouraging behaviours or inducing behaviour changes, Commonwealth government charges, rent on government premises, or taxes. See guidelines for more information. The rebate will be available until 30 June 2022. Eligibility To be eligible for this rebate, small businesses (including non-employing sole traders) and not-for-profit organisations must: have total Australian wages below the NSW Government 2020-2021 payroll tax threshold of $1.2 million have an Australian Business Number (ABN) registered in NSW and/or have business premises physically located and operating in NSW be registered for goods and services tax (GST) provide a declaration that the business has a turnover of at least $75,000 per year. Note: Only one $1500 rebate is available for each ABN. Not-for-profit organisations are not subject to the GST requirement but must demonstrate a turnover of more than $75,000 per year. If you have any questions regarding the guidelines for this rebate, or you would like assistance with an application or supporting documentation, please contact the team at Collins Hume in Ballina or Byron Bay on 02 6686 3000. Source: Service NSW

Australia has had its fair share of disasters over the last few years. Drought, bushfires and floods have ramped up the volume of insurance claims. Most people would assume that if and when they need to claim on their insurance, the insurance payout covers the damage and is not income assessed for tax purposes - but this is not always the case. Insurance payouts for damaged or destroyed personal items are generally not taxed. For example, any insurance payout you receive for your family home won't necessarily be taxed. But, the rules are different if you have used your home to produce an income, for example, you have used part of your home as a home business or you have rented out part of your home. The rules are also different if the item is a personal asset costing more than $10,000 or if the asset is a collectible that cost more than $500. Where the insurance proceeds exceed the original cost of the asset, that is, the asset appreciated in value, then capital gains tax might apply. And, if the asset damaged is related to a business or an income producing asset like a rental property, the rules are also different. Business premises, trading stock and depreciating assets For businesses that have had trading stock damaged or destroyed, any insurance payout is taxable. For example, the payouts on claims coming through from the enforced lockdowns for spoiled perishable stock would need to be included in the business's tax return. This is because the insurance premiums would have been claimed by the business as an expense. It is just a question of how the insurance is taxed. If your business premises are damaged and the insurance covers repairs, then the amount you receive is generally taxed as income if you can claim a deduction for the repair costs. Where the premises are damaged or destroyed, then we'll need to work with you to identify if you have made a taxable gain or loss. When it comes to depreciating assets like machinery, then it starts getting more complex. In general, if the insurance payout exceeds the written down value, then the payout is included in the business's assessable income, and if less, you can claim a deduction for the difference. However, there are also special rules for work cars, small businesses, and where a replacement item is purchased. Rental properties A rental property is an income producing asset and, in most cases, the cost of insurance policies relating to the property would have been claimed as an expense. For example, if you receive a payout for your rental property as a result of a disaster, generally, you will need to include at least part of this amount as income in your tax return. This could include insurance payouts for loss of rental income, repairs, replacements of destroyed assets, or money received from a relief fund. The treatment of the insurance proceeds depends on what the payout is for, how the insurance is used, and whether the rental property was vacant or in use. A recent case before the Administrative Appeals Tribunal (AAT) shows how tricky this area of the tax rules can be. In this case, the taxpayer initially received insurance proceeds of $24,000 for lost rental income after their property sustained storm and flood damage. The taxpayer had declared this amount as income. All good so far. Then, the taxpayer received an additional $250,000 from the insurer with the payment described as "in consideration of the taxpayer releasing the insurer from all liability past, present and future under the insurance policy". The taxpayer did not believe this money was for him to repair his property so did not claim it in his tax return. But, he did claim a deduction for repair costs totalling $130,000 in two income years. The ATO subsequently audited the taxpayer and issued an assessment for the full $250,000. The AAT agreed with the ATO even though the taxpayer had only claimed $130,000 in repairs. It's possible this case will go to appeal but it serves as a warning that any lump sum payouts need to be very carefully assessed and dealt with. If you have been impacted by a disaster and are uncertain of how any insurance proceeds will be taxed, please talk with Collins Hume and we can work with you to help you understand your position on 02 6686 3000 (Ballina and Byron Bay).

Major new COVID-19 support package to help NSW businesses The NSW Government has announced a major new grants package and Dine & Discover changes to help small businesses and individuals across NSW impacted by the current COVID-19 restrictions. The package includes grants of between $5,000 and $10,000 for small businesses, payroll tax deferrals for all employers, an extension of the Dine & Discover program to 31 August 2021 and the ability for people to use Dine & Discover vouchers for takeaway delivered directly to their home by the venue itself. The centrepiece of the package is the small business support grants which will help businesses by alleviating cashflow constraints while trading is restricted. This can be used for business expenses such as rent, utilities and wages, for which no other government support is available. Three different grant amounts will be available for small businesses depending on the decline in turnover experienced during the restrictions: $10,000 for a 70% decline $7,000 for a 50% decline, and $5,000 for a 30% decline. Unfortunately businesses continue to incur costs such as rent, power and lost produce whilst the current restrictions are in place. The new grants will be available across NSW and available to sole traders and non-profit organisations, with expanded criteria to assist most hospitality and tourism operators impacted by COVID-19 restrictions during the school holiday period. Businesses will be able to apply for the grants through Service NSW from later in July and will need to show a decline in turnover across a minimum two-week period after the commencement of major restrictions on 26 June 2021. Business grants will be divided into two streams: 1. Small Business COVID-19 Support Grant Available to businesses and sole traders with a turnover of more than $75,000 per annum but below the NSW Government 2020-21 payroll tax threshold of $1,200,000 as at 1 July 2020. These businesses must have fewer than 20 full time equivalent employees and an ABN registered in NSW or be able to demonstrate they are physically located and primarily operating in NSW. 2. Hospitality and Tourism COVID-19 Support Grant Available to tourism or hospitality businesses that have a turnover of more than $75,000 and an annual Australian wages bill of below $10 million as at 1 July 2020. These businesses must have ABNs registered in NSW or be able to demonstrate they are physically located and primarily operating in NSW. NB: Full criteria for both streams will be available in coming days on the Service NSW website. Other key elements of the announced package Dine & Discover vouchers will be able to be used for takeaway from eligible and registered Dine businesses during the restriction period, but food must be delivered direct to the home by the restaurant or café and not picked up. Dine & Discover vouchers cannot be redeemed for takeaway using third party delivery platforms. A further one-month extension of Dine & Discover vouchers until 31 August 2021 to allow more time to use them. Optional deferral of payroll tax payments due in July 2021 and the deferral of hotel June quarter gaming machine tax, with the Chief Commissioner of State Revenue able to provide for appropriate repayment arrangements on a case by case basis. More information on small business support grants including Dine & Discover program changes will be available on the Service NSW website soon. To prepare a grant application or check proof of identity and auditing requirements, contact the team at Collins Hume on 02 6686 3000. Source: NSW Government

Work from home expenses under scrutiny and the perils of browsing Facebook If you worked from home during lockdown and spent money on work related items that were not reimbursed by your business, you might be able to claim some of these expenses as a deduction – but not everything you purchase can be claimed. The ATO has stated that it is looking very closely at work related deductions that are being claimed. If you are claiming your expenses, there are three methods you can use: An 80 cents per hour short cut method (you will need to have evidence of hours worked like a timesheet or diary) The 52 cents per hour method (which excludes phone, internet, or the decline in value of equipment which are all claimed separately), or The actual expenses method. The ATO is particularly interested in those using the 'actual expenses' method. To be able to claim a work related expense, it needs to be directly related to the work you do and how you earn your income. The ATO has highlighted four ineligible expenses that are being claimed: Personal expenses such as coffee, tea and toilet paper Expenses related to a child's education, such as online learning courses or laptops Claiming large expenses up-front (instead of claiming depreciation for assets), and Occupancy expenses such as rent, mortgage interest, property insurance, and land taxes and rates, that cannot generally be claimed by employees working from home. A recent case before the AAT shows how determined the ATO is to crackdown on work related deductions being claimed where there is not a satisfactory nexus between the expense being claimed and the taxpayer's work. In this case, the taxpayer had claimed car and clothing expenses, and home internet and mobile phone costs. The ATO conceded the car costs but on a reduced deduction. When it came to clothing expenses the ATO conceded that a deduction could be claimed for gloves and a beanie on the basis that the taxpayer worked in cold conditions and that these were protective clothing needed for the job. However, the AAT refused to allow a deduction for the cost of a pair of socks on the basis that they were not protective in nature in their own right – yes, it really does get this detailed. The taxpayer had also claimed 100% of his home internet expenses but the ATO reviewed this claim and reduced the deductible amount to $50 - a record of the family's home internet usage demonstrated the internet was used to browse Facebook amongst other non-work related sites. One of the other issues to come out of this case was the importance of record keeping. If you are going to claim work related expenses, then ensure you have the records to prove your claim. If anything in this update is a priority for you, please feel free to contact Collins Hume in Ballina or Byron Bay immediately for assistance.

On 1 July 2021, the Superannuation Guarantee (SG) rate will rise from 9.5% to 10% - the first rise since 2014. It will then steadily increase each year until it reaches 12% on 1 July 2025. The 0.5% increase does not mean that everyone gets an automatic pay increase, this will depend on your employment agreement. If your employment agreement states you are paid on a 'total remuneration' basis (base plus SG and any other allowances), then your take home pay might be reduced by 0.5%. That is, a greater percentage of your total remuneration will be directed to your superannuation fund. For those paid a rate plus superannuation, then your take home pay will remain the same, but your superannuation fund will benefit from the increase. If you are used to annual increases, the 0.5% increase might simply be absorbed into your remuneration review. Employers will need to ensure that they pay the correct SG amount in the new financial year to avoid the superannuation guarantee charge. Where employee salaries are paid at a point other than the first day of the month, ensure the calculations are correct across the month (i.e., for staff paid on the 15th of the month they are paid the correct SG rate for June and July in their pay and not just the June rate). Superannuation salary packaging arrangements will also need to be reviewed – employers should ensure that the calculations are correct and the SG rate increase flows through. Annual superannuation guarantee rate changes Date SG rate 1 July 2020 – 30 June 2021 9.5% 1 July 2021 – 30 June 2022 10% 1 July 2022 – 30 June 2023 10.5% 1 July 2023 – 30 June 2024 11% 1 July 2024 – 30 June 2025 11.5% 1 July 2025 – 30 June 2026 12% New stapled superannuation employer obligations for new staff Currently, when an employer hires a new staff member, the employee is provided with a Choice of Fund form to identify where they want their superannuation to be directed. If the employee does not identify a fund, the employer directs their superannuation into a default fund. When someone has multiple funds, it often erodes their balance through unnecessary fees and often insurance. And, as at 30 June 2020, there was $13.8 billion of lost and unclaimed superannuation in accounts across Australia. From 1 July 2021, where an employee does not identify a fund, legislation before Parliament will require the employer to link the employee to an existing superannuation fund. That is, an employee's superannuation fund will become 'stapled' to them. An employer will not simply be able to set up a default fund, but instead will be required to request that the ATO identify the employee's stapled fund. If the ATO confirms no other fund exists for the employee, contributions can be directed to the employer's default fund or a fund specified under a workplace determination or an enterprise agreement (if the determination was made before 1 January 2021). Legislation enabling this measure is currently before the Senate. Single touch payroll reporting Single touch payroll will apply to most businesses from 1 July 2021, this will include small businesses (those with 19 or fewer staff) and businesses with closely held employees (e.g., directors of family companies, salary and wages for family employees of businesses). No further extensions will be granted. For employers with closely held employees, there are some concessions on how reporting is managed with the option to report one of three ways: reporting actual payments in real time, reporting actual payments quarterly or reporting a reasonable estimate quarterly. These concessions allow a level of flexibility in relation to determining and making payments to closely-held payees. However, if your business is impacted, it will be important to plan throughout the year to prevent problems occurring at year end. If anything in this update is a priority for you, please feel free to contact Collins Hume in Ballina or Byron Bay immediately for assistance.

Collins Hume celebrates John Collins' retirement Collins Hume team, alumni, clients and friends gathered at Ballina RSL on 16 June to wish Founding Partner John Collins a happy retirement. John, an accounting and fishing stalwart in Ballina, officially retires from the Partnership on 30 June 2021. Collins Hume CEO, and MC, Christopher Atkinson started proceedings by saluting John's incredible public practice career. He said that John had always been ahead of his time, having initiated tax planning, flexible working arrangements and client nurturing well before the accounting profession today. From rubber snakes in files to a fox whistle in the car exhaust, no one was safe from John. The room was regaled with numerous tales about his practical jokes over the years. In her tribute, John's current PA, Carol Holton, mentioned a hidden cracker gag that he thwarted before it went bang. Being a master of practical jokes, John had detected what was going on and told Carol that she had set it up to fail, only after she had sweated long enough first! John then enjoyed seeing a video collage of well wishers and reminiscences from clients, friends and retired Collins Hume Partner, John Hume. As a parting gift, John received two portraits from local award-winning caricaturist, Ron Atkinson. "When I left the ATO and started Collins Hume in 1980 I had one client and a part-time typist," said John. "Today Collins Hume has five Partners, some 20 staff and clients all around Australia and the world. I am so proud of the legacy I have helped create in Ballina." John also thanked his wife, Lynn, for her enduring support throughout his career. He looks forward to continuing his association with Ballina Angling Club, caravanning and racking up some serious pinball scores in his retirement. Partners Christopher Atkinson, Kelly Crethar, Jamie Doyle and Peter Fowler look forward to steering Collins Hume ahead in the future, with teams in Ballina and Byron Bay. Read more about John at Our Team. Special thanks goes to Selina Atkinson and Carol Holton for organising such a wonderful celebration of John's career! Copyright 2021. Collins Hume Accountants & Business Advisers Ballina & Byron Bay

EOFY planning tips with Christopher Atkinson from Collins Hume. The next two articles that follow this post pertain to end of financial year changes, reminders and actions for business owners.

ATO Payment Deferrals We can liaise with the ATO and negotiate a deferral or repayment plan if you are having trouble paying any ATO liabilities. Please contact us immediately if you would like our assistance with this. Single Touch Payroll If you are reporting payments to employees to the ATO using Single Touch Payroll (STP), most businesses will need to lodge a STP Finalisation Declaration with the ATO by 14 July 2021. Employees will be able to access their Income Statement through their MyGov account. Small businesses with 19 or less employees and that employed family members were due to start reporting these employees (known as "closely held") through Single Touch Payroll (STP) from 1 July 2020. However, due to COVID-19 the start date of this has been extended to 1 July 2021. Your small business can start voluntarily using STP earlier than this date. All other employees should now be reported through STP. Reportable Fringe Benefits Where you have provided fringe benefits to your employees more than $2,000, you need to report the FBT grossed-up amount. This is referred to as a `Reportable Fringe Benefit Amount' (RFBA) amount, and it needs to be updated for each employee as part of your Single Touch Payroll finalisation procedure for 2021. Stocktake We can liaise with the ATO and negotiate a deferral or repayment plan if you are having trouble paying any ATO liabilities. Please contact us immediately if you would like our assistance with this. Businesses that buy and sell stock generally need to do a stocktake at the end of each financial year as the increase or decrease in the value of stock is included when calculating the taxable income of your business. If your business has an aggregated turnover below $10 million, you can use the simplified trading stock rules. Under these rules, you can choose not to conduct a stocktake for tax purposes if the difference in value between the opening value of your trading stock and a reasonable estimate of the closing value of trading stock at the end of the income year is less than $5,000. You will need to record how you calculated the value of trading stock on hand. If you do need to complete a stocktake, you can choose one of three methods to value trading stock: Cost price – all costs connected with the stock including freight, customs duty, and if manufacturing, labour and materials, plus a portion of fixed and variable factory overheads. Market selling value – the current value of the stock you sell in the normal course of business (but not at a reduced value when you are forced to sell it). Replacement value – the price of a substantially similar replacement item in a normal market on the last day of the income year. A different basis can be chosen for each class of stock or for individual items within a particular class of stock. This provides an opportunity to minimise the trading stock adjustment at year-end. There is no need to use the same method every year; you can choose the most tax effective option each year. The most obvious example is where the stock can be valued below its purchase price because of market conditions or damage that has occurred to the stock. This should give rise to a deduction even though the loss has not yet been incurred. Trust Distribution Resolutions Trustees (or directors of a trustee company) need to consider and decide on the distributions they plan to make by 30 June 2021at the latest. Decisions made by the trustees should be documented in writing, preferably by 30 June 2021. If valid resolutions are not in place by 30 June 2021, the risk is that the taxable income of the trust will be assessed in the hands of a default beneficiary (if the trust deed provides for this) or the trustee (in which case the highest marginal rate of tax would normally apply). ACTION STEP: If you haven't already signed your Trust Distribution Resolution for each Trust you have, please contact our office before 30 June 2021 so that we can properly prepare this document for you to sign. Div 7a Loan Agreement Minimum Repayments When a company makes a loan to a shareholder or an associate of a shareholder, a Loan Agreement needs to be entered into and minimum annual repayments for the loan need to be made before 30 June each year. If these steps aren't taken, then the loan amounts are treated as a deemed unfranked divided and are taxable at the taxpayer's marginal tax rate – which could be as high as 47%. ACTION STEP: Ensure that you have made all minimum repayments for any Div7A Loans that you have before 30 June 2021. Please contact us immediately if you are unsure of this, as you may need to declare a dividend from the company before 30 June 2021 to assist with your minimum annual loan repayment. Reporting Payments to Contractors A "Taxable Payments Annual Report" (TPAR) is due for lodgement with the ATO by 28 August 2021 for the following industries: Building and construction services Cleaning services Courier services Road freight services Information technology (IT) services – including software development Security, investigation or surveillance services Mixed services (providing one or more of the services listed above) This report includes a listing and total of all payments and non-cash benefits made to contractors during the year. Payroll Tax Payroll tax applies to all entities that have an Australian payroll that exceeds state-based limits. You should note that in addition to normal salaries and wages, the following items are generally also included in payroll expenses if payroll tax applies: fringe benefits based on the grossed-up taxable value of fringe benefits; all employer contributions to superannuation on behalf of employees; and some contractor or sub-contractor fees. For more detailed information about whether payroll tax applies to your business, please contact our office. ACTION STEP: The Annual Return/Reconciliation for payroll tax must be lodged by 21 July 2021 (Queensland, Victoria, Northern Territory, Tasmania and WA) or by 28 July 2021 (NSW and South Australia) with your State Revenue Office. WorkCover/WorkSafe Your WorkCover/WorkSafe insurer sends an annual reconciliation to all registered employers at the end of the financial year. In completing your annual reconciliation, you will need to include the following items in addition to normal salaries and wages: fringe benefits based on the taxable value of fringe benefits (do not gross-up); all employer contributions to superannuation on behalf of employees; and some contractor or sub-contractor fees. For more detailed information about what items to include in the reconciliation statement, please contact our office. Once the reconciliation is received and processed by your WorkCover/WorkSafe insurer, you will be issued with a final assessment or a refund depending on the instalments you have paid during the year. ACTION STEP: Complete and lodge the Annual Reconciliation with your WorkCover/WorkSafe insurer by the due date. Goods and Services Tax (GST) A reconciliation of GST should be performed as at 30 June 2021 to determine if there has been an under or over-payment of GST in the 2021 tax year. If a discrepancy has arisen, then it is possible to adjust a subsequent Business Activity Statement (BAS) to rectify the error, however there are limits imposed on adjustments that can be made in this way. Income declared on your BAS should be reconciled to income declared on your income tax returns. Also, please note that you are required by law to substantiate all Input Tax Credit claims with a complying Tax Invoice, and you need to retain these documents for a minimum of 5 years. ACTION STEP: Complete the annual GST reconciliations, and check that you have all required tax invoices and other supporting documents. ATO Audit Activity Please note that the ATO and State Revenue Office are constantly increasing their audit activities. There has been an increase in audit activity for PAYG Withholding, Payroll Tax, WorkCover, GST, Division 7A loan accounts from companies, and Trust distributions from Discretionary Trusts. We can offer a review of your records and record-keeping procedures if you are concerned about your ability to satisfy an audit. ACTION STEP: Please contact our office if you would like to request this service. 8 Last Minute Tax Minimisation Tips Here are some final reminders about ways to reduce your tax for 2021: Write-off Bad Debts in your computer system before 30 June 2021 Write-off any trading stock that is damaged or obsolete Review your Asset Register and scrap any obsolete plant and equipment Pay for marketing materials, repairs, consumables, office stationery, and donations before 30 June 2021 Ensure employee superannuation contributions are made and received by your employees' superannuation fund/s by 30 June 2020 to allow a tax deduction this 2021 financial year Realise any capital losses you have before 30 June 2021 to offset against any capital gains you may have made Pass a properly authorised resolution to commit to the payment of a Director's Fee or employee bonus before 30 June 2021, even if it paid within a reasonable time after 30 June 2021 Raise management fees between entities by 30 June 2021 and ensure that you have a signed Management Fees Agreement / Services Agreement in place to support the transaction and to ensure they are commercially reasonable. Do You Need Any Assistance from Us? Feel free to contact our office anytime by phone in Ballina or Byron Bay on 02 6686 3000 or email us - we're here to help.

Key changes from 1 July 2021 to be aware of Changes to increase the super guarantee to employees and changes to single touch payroll (STP). Please read this 2-minute article to ensure you keep up to date with everything tax-related that affects you. Also, as a business owner there are many obligations that you need to consider and action just before and after 30 June each year. Some of these will help to minimise your tax. Others will reduce your exposure to an ATO tax audit. We have outlined these key areas below to assist you: Brief summary of key dates and actions over the next 2 months Key changes you need to be aware of Your 2021 End of Financial Year Reminders and Actions Please carefully consider this information and contact us immediately if you have questions we can answer or if we can assist. ACTION REQUIRED + UPDATES Pre 30 June 2021 Trusts: Trustee resolutions need to be in place to be able to distribute trust income for the2021 financial year to beneficiaries and avoid being taxed at default tax rates. Companies:Review shareholder loan accounts and make minimum loan repayments (may need to declare dividends). Employee Superannuation: Pay this 24 June 2021 to deduct contributions in the current financial year. Please note that your super payment must clear your bank account by 30 June2021 for it to be a tax deduction in 2021. Complete a stocktake where required. Write off bad debts and scrap any obsolete stock or plant and equipment. Ensure any inter-entity management fees have been invoiced in your accounting system with proper Agreements in place. 1 July 2021 Companies: Tax rate for base rate entities reduces from 26% to 25%. Employee Superannuation: Super guarantee rate increases from 9.5% to 10%. Single Touch Payroll: Commences for "closely held" employees (family members, Directors, etc). Professional Firms: New guidance applies for tax treatment on profits of professional services firms. 14 July 2021 (on or before) Single Touch Payroll Finalisation Declarations need to be made by 14 July 2021 (extensions can apply for "closely held" payees). 28 July 2021 Quarterly super guarantee payment due (1 April – 30 June 2021). 28 August 2021 Taxable payments annual report due for payments to Contractors. Key changes to be aware of Superannuation Guarantee Increases to 10% This is the biggest change that will affect you this year. From 1 July 2021, the Superannuation Guarantee rate will increase from 9.5% to 10%. It is planned to increase by 0.5% each year until it reaches 12% on 1 July 2025. If any employees who are paid wages or salary plus superannuation, then their take home pay will remain the same and the 0.5% increase will be added to their superannuation payments. ACTION STEP: All employers will need to give immediate action to managing this increase, and they will need to factor in this increase to their cash flow planning for 2022. Single Touch Payroll Changes From 1 July 2021, amounts paid to employees who are called "closely held" payees will need to be reported through STP. If you're a small employer you can report these amounts on or before each payday, or you can choose to report this information quarterly. All other employees need to be reported on or before each pay day. A closely held payee is an individual directly related to the entity from which they receive payments (eg. a family member, a Director of a company or a beneficiary of a Trust). Company Tax Rate Reduction From 1 July 2021, the company tax rate for base rate entities will reduce from 26% to 25%. This will also reduce the maximum franking rate that applies to dividends paid by base rate companies. Profits of Professional Service Firms The ATO has released draft guidance (PCG 2021/D2) that is planned to begin from 1 July 2021. This is designed to prevent structures being set up to divert income away from professionals and reducing their tax. The draft guidance includes a series of tests to identify a professional's risk level, looking at the structure of the business and how its profits are distributed, and whether the structure has any high risk features. ACTION STEP: All professional service firms (eg. doctors, medical specialists, architects, etc) will need to review their existing structure and possibly make changes from 1 July 2021. Some arrangements that were previously considered low risk may now fall into a higher risk zone. Please carefully consider this information and contact Collins Hume on 02 6686 3000 immediately if you have questions we can answer or if we can assist.

Australia is facing a shortage of skilled labour. When the supply of staff dry up the focus often turns to retention. But the first step is to understand why people you want to stay, choose to move on? Very few people will reveal the whole truth about why they leave an employer. Partly they don't want their previous employer to think badly of them, they don't want to hurt anyone's feelings, and for others, it's just not worth getting into it. However, there is almost always a catalyst for change. It might not always be the employer but it is very rare that it is "just time". Change in leadership - Leadership vacuum or concern about the impact of the change. Work not challenging - This is the classic reason for leaving that is behind the "it's just time" comment. The employee feels as if the company has nothing left to offer. Conflict with a supervisor - Your business can have the best retention policies and strategies in place but a conflict between Manager and subordinate is immediate and damaging. Change in company dynamics - Each company is generally made up of smaller sub groups. These might be based on age, gender, professional status or cultural identity. The loss of a popular team member from one of these groups will be more deeply felt by their subgroup. Unfavourable change in responsibilities - Changes in team structures, reallocation of resources or taking on new assignments that are not within the skills set or comfort level of the employee. Life work balance issues - Retention is about mutual respect for priorities. The employer respecting the employee's personal responsibilities and employees recognising that they have corporate responsibilities. Both need to be fulfilled. Poor recruitment - Professional or cultural misfits. Ever hired Mr Right now rather than Mr Right? Lack of recognition for perceived value - Overlooked for opportunities held out but not delivered. Sometimes, it's not all bad. We've all had them; that employee who is the cultural and professional misfit. Decisive action when there is a poor fit can improve team morale. Collins Hume Accountants and Business Advisers | Ballina & Byron Bay NSW | Ph 02 6686 3000

To protect older Australians, the Government has moved to formalise 'granny flat arrangements' by providing an incentive to protect all parties in the arrangement. Typically, granny flat arrangements occur when an older person transfers some sort of consideration (often title to property or proceeds from the sale of property) to their adult child in exchange for the promise of ongoing care, support and housing. In some circumstances, it's a way for a parent to give their children access to their inheritance when it's needed not at a later point when the person dies. However, a 2017 Australian Law Reform Commission report highlighted the potential for elder abuse where granny flat arrangements fall apart. If the relationship breaks down, or other unforeseen circumstances arise, the older person can be left homeless. A central problem is a lack of formality in these arrangements. The tax system, in particular, the capital gains tax (CGT) system, acts as a disincentive to formalising a granny flat arrangement. Under the current rules, if a granny flat arrangement if formalised, this can lead to an upfront tax liability for the homeowners. Also, the children can potentially lose part of their main residence exemption when the parent pays for the right to live in the home depending on how the arrangement is structured. If the arrangement is left informal, and the money paid by the parent is merely a gift, the main residence exemption is generally unaffected. Recently released exposure draft legislation seeks to overcome the disincentive to formalising a granny flat arrangement by providing a CGT exemption. This does not mean that every separate dwelling built out the back of a house will have a CGT exemption. The legal meaning of granny flat is derived from social security law; it describes an arrangement rather than a type of accommodation and can arise whenever money or other consideration is given in exchange for a right to use the accommodation for life. The draft legislation provides that no CGT event will arise from a granny flat arrangement where certain conditions are met including where the individual with the granny flat arrangement has: Reached pension age or has a disability, and That the arrangement is in writing and is not of a commercial nature. Tax can be a major cost to your business. We work in partnership with you to minimise your tax and help you achieve your key objectives. Contact Collins Hume's tax specialists in Ballina or Byron Bay on 02 6686 3000.