The ATO has extended COVID-19 relief for SMSF trustees The relief measures, which protect trustees from COVID-19 related contraventions of the super laws, now extend from the 2019-20, 2020-21 and 2021-22 financial years. The relief measures provide: Residency relief where the pandemic has prevented members from returning to Australia. This measure prevents the SMSF from breaching the residency conditions to be an Australian super fund. Rental relief where a COVID-19 reduction, waiver or deferral has been provided to a tenant. Loan repayment relief where relief is provided on commercial terms. In-house asset relief where the SMSF exceeded the 5% in-house asset threshold at 30 June due to the impacts of COVID-19. Let's Talk At Collins Hume we turn our knowledge into great value for you; it’s as simple as that. Contact our team in Ballina or Byron Bay on 02 6686 3000.

COVID-19 support to roll back as states and territories reach vaccination targets The National Plan, the road map out of COVID-19, does more than provide greater freedoms at 70% and 80% full vaccination rates, it withdraws the steady stream of Commonwealth financial support to individuals and businesses impacted by COVID-19 lockdowns and border closures. We look at the impact and the support that remains in place. For individuals The COVID-19 Disaster payment offered a lifeline to those who lost work because of lockdowns, particularly in the ACT, New South Wales, and Victoria where the Delta strain of the virus and long-term lockdowns had the greatest impact. In late September, the Treasurer announced that the Disaster Payment will roll back as states and territories reach vaccination hurdles on the National Plan. Over $9 billion has been paid out to date on Disaster Payments and at 70% and 80% full adult vaccination, the disaster, apparently, is over. At 70% full vaccination in your state or territory In the first week a state or territory reaches 70% full adult vaccination, the automatic renewal that has been in place will end and individuals will need to reapply each week that a Commonwealth Hotspot remains in place to confirm their eligibility. The COVID-19 Disaster payment will not necessarily end, but anyone currently receiving the payment will need to reconfirm that they meet the eligibility criteria, including living or working in a Commonwealth declared hotspot. Given that the time gap between 70% and 80% full vaccination might be as little as two weeks in some regions, the impact of the 70% restrictions might be a moot point. At 80% full vaccination in your state or territory In the first week a state or territory reaches 80% full adult vaccination, the COVID-19 Disaster Payment will phase out over a two week period before ending completely. *First week population +16 years of age reaches vaccination target Those needing financial support will no longer be eligible for the disaster payment, regardless of whether a Commonwealth hotspot is in place, and instead will need to apply for another form of income support such as JobSeeker. Unlike the disaster payments, JobSeeker and most other income support payments are subject to income and assets tests. The Pandemic Leave Disaster Payment, for those who cannot work because they need to self-isolate or care or quarantine, or care for someone with COVID-19, will remain in place until 30 June 2022. Support for business Each state and territory manages lockdown and financial support to businesses impacted by COVID-19 lockdowns and border closures differently. The way in which support is withdrawn will depend on how support has been provided and the extent of Commonwealth support. New South Wales The NSW JobSaver, which provides payments of up to 40% of weekly payroll, is jointly funded by the state and Commonwealth governments. From 13 September, businesses receiving JobSaver have been required to reconfirm their eligibility for the payment each fortnight including a 30% decline in turnover test and headcount test.*excludes e *excludes extension program At 70% full adult vaccination (10 October 2021), JobSaver will reduce from 40% of weekly payroll to 30%. Then, at 80% full vaccination, the Commonwealth will withdraw funding. The NSW Government announced that it will continue to fund their portion of JobSaver up until 30 November 2021 (15% of payroll). It is unclear at this stage of what the impact of the withdrawal of Commonwealth funding at 80% vaccination rates will mean to large tourism, hospitality, and recreation businesses. The $1,500 fortnightly micro-business grant, will reduce to $750 per fortnight from 80% full vaccination and cease on 30 November 2021. If you are uncertain how the easing of restrictions will impact on you and your workplace, see the roadmap. Australian Capital Territory The ACT Government has distributed grants to business jointly funded with the Commonwealth. The ACT COVID-19 Business Grant was recently extended with top-up grants of $10,000 for employing businesses and $3,750 for non-employing businesses distributed to previous grant recipients in industries impacted by continued lockdowns. Large businesses $2m to $5m received an additional top-up amount of between $10,000 and $30,000. The Tourism, Accommodation Provider, Arts, Events, Hospitality & Fitness Grants have also been topped up with grants between $5,000 and $25,000 to existing recipients and the grant has been expanded to the fitness/sports sector (more information will be available mid-October). Lockdowns eased on 1 October and are scheduled to be lifted from 15 October, with a return to normal in early to mid December 2021 (see the pathway forward). While not specified, it is expected that grants will cease at this point and instead, directed into targeted industry specific initiatives (see the recovery plan). Queensland While not significantly impacted by local lockdowns, Queensland tourism is impacted by national and international border closures. A second round of Tourism and Hospitality Sector Hardship grants have been announced although no further details are currently available. For businesses on the border with New South Wales, a hardship grant will become available if the closure remains in place until 14 October or longer with grants of $5,000 for employing entities and $1,000 for non-employing entities (see Business Queensland for details). To receive the grant, you must operate in a ‘border business zone’ and have received the COVID-19 Business Support Grant. Pointedly, Federal Treasurer Josh Frydenberg has stated, “Governments must also hold up their end of the bargain and stick to the plan agreed at National Cabinet that will see restrictions ease and our borders open up as we reach our vaccination targets of 70 to 80 per cent.” The Queensland Government will be under significant pressure to open borders once vaccination rates reach 80% in December and prior to the school holiday period. Victoria The Victorian Government has distributed grants to business jointly funded with the Commonwealth. For many of these grants, funding has been topped up in line with lockdown extensions. The small business hardship fund providing one-off grants of $20,000 for businesses that have suffered a 70% or more decline in turnover and were not eligible for other grants or funding, will reopen (see the BusinessVictoria website for details). The Business Costs Assistance Program will provide automatic top-ups to existing recipients across October and into the first half of November (two fortnightly payments between 1-29 October on a rising scale). Businesses that remain closed or severely restricted between 70% and 80% double dose will receive an automatic payment for the period from 29 October to 13 November. Licensed hospitality venue fund recipients will also receive weekly top-ups in October of between $5,000 and $20,000, stepped according to venue capacity. Between 70% and 80% double dose, payments for licensed premises in metropolitan Melbourne will be reduced by 25%, and in regional Victoria by 50%. Victoria is not expected to reach the 70% vaccination target until the end of October, and 80% in early to mid-November. You can find Victoria’s broad road map here. National The National Plan stipulates that state and territory borders are to reopen at 80% double vaccination in that state or territory but this will depend on health advice at the time. Generally, international borders will reopen in states and territories at 80% double vaccination with Australian and permanent residents able to quarantine at home for 7 days. Unvaccinated travellers will need to stay in hotel quarantine for 14 days. Commercial flights will also resume for vaccinated Australians with Australia expected to implement a ‘red light, green light’ system similar to the UK to designate safe countries. For other regions such as South Australia and the Northern Territory, borders are expected to reopen at 80% double vaccination but with some nuances flagged. The Western Australian Government however has stated that it will announce an easing of border restrictions once an 80% double vaccination has been achieved for those over 12 years of age. SME lending options While there is likely to be an economic rebound when restrictions ease across the country, for many, a funding gap will remain between the assistance provided by Government grants and viable trading conditions. The expanded SME recovery loan scheme took effect on 1 October 2021. Under the scheme, the Government will guarantee 80% of loan amounts to businesses that have been adversely impacted by COVID-19. The lending terms, repayment, and interest rates are set by the lenders but cannot be backed by residential property, that is, if the Government is underwriting the loan, lenders cannot ask business owners to use their home as security. However, Directors guarantees are likely to be required. Under the scheme, lenders can provide: A repayment holiday of up to 24 months Loans of up to $5m Loan terms of up to 10 years, and Secured and unsecured loans The recovery loans can be used to refinance existing loans, purchase commercial property, purchase another business, or working capital. But, cannot be used to purchase residential property, financial products, lend to associated entities, or lease, rent, hire or hire purchase existing assets that are more than halfway into their effective life. The loan scheme is generally available to solvent businesses with a turnover of up to $250m, have an ABN, and a tax resident of Australia. Loans remain subject to lending conditions and generally the lenders will look to lend to viable businesses where it is clear that they can trade their way out of the impact of COVID-19 or the assets of the business make the break-up value attractive. If you default on your loan, you cannot simply walk away from it. The Government is guaranteeing 80% of the lender’s risk not your debt. Director guarantees are still likely to be required and for many loans, it will be secured against a business asset. On the plus side, interest rates are very attractive right now and many of the lenders are providing a repayment holiday of up to 24 months and in some cases, existing debt can be bundled into the loan arrangements. Let's Talk That’s all we focus on: You, your family, your wealth, your business and the legacy you (and we) leave. That’s it. Join Collins Hume on this amazing journey.

If you're a commercial or residential landowner who has reduced your tenants' rent due to COVID-19, between 1 July 2021 and 31 December 2021, you may be eligible for the NSW Government's land tax relief. The relief will be a reduction in the 2021 tax payable on the parcel of land where rent relief has been given to the tenant who occupies that land. You can apply online at https://mybusiness.service.nsw.gov.au/transactions/land-tax-relief/ready-to-start (See the recommended 14-step process for How to Apply on the Service NSW website.) The land tax reduction will be the lesser of: the amount of rent reduction you provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or 100 per cent of the land tax attributable to the parcel of land leased to that tenant. Land tax relief will: be paid to you as a refund if you've already paid your land tax be used to offset the balance of the amount of land tax payable if you have not yet completed payment. Note: A residential tenancy support payment for properties tenanted in NSW is also available. If you're a residential landlord, you can apply for either the land tax relief or the residential tenancy support payment. You cannot apply for both, so you'll need to decide which is more appropriate for you, before applying. Eligibility To be eligible for relief on your 2021 land tax, you'll need to: be leasing property on your parcel of land to: a commercial tenant who has: an annual turnover of up to $50 million, and is eligible for the: Micro-business COVID-19 Support Grant 2021 COVID-19 NSW Business Grant and/or JobSaver scheme, or a residential tenant who has lost 25% or more of household income due to COVID-19. have reduced the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021 have provided the rent reduction without any requirement for it to be paid back at a later date have a 2021 land tax liability attributable to the parcel of land where the rent reduction has been given. If you're not eligible for land tax relief you can request an extended payment arrangement for your land tax if necessary. Note: You can still apply for this period of land tax relief, even if you applied for any of the previous relief periods, provided you meet all the eligibility requirements. For an itemised list of information and proof of identity documents to make an application, please visit the Service NSW website. If you're eligible, this relief can reduce your land tax liability for 2021 by up to 100%. You can apply for multiple properties in a single application. However, you can only select one bank account per person. Once you've submitted your application you'll receive a confirmation email. Revenue NSW will review your application and advise you of the outcome. If further information is required they will contact you. More information You're able to apply for multiple properties at the same time. Only select one bank account per person. If there's been a change of circumstances or eligibility since your initial application, you can resubmit your application. If you're submitting this application on behalf of a landlord, you'll need to have the authority to do so. There is no requirement for rent reduction negotiations to have been concluded when you apply for land tax relief. Providing false or misleading information will incur penalties. Collins Hume can provide assistance to our clients as we have done with previous NSW grant programs. Please contact the team at Collins Hume in Ballina or Byron Bay on 02 6686 3000. Source: Service NSW

Recruiting new employees? The 1 November superannuation rule changes When your business hires a new employee, the Choice of Fund form is used to identify where they want their superannuation to be directed. If the employee does not identify a fund, generally the employer directs their superannuation into a default fund. From 1 November 2021, where an employee does not identify a fund, the employer is required to contact the ATO and request details of the employee’s existing superannuation fund or ‘stapled’ fund (the fund stapled to them). The request is made through the ATO’s online services through the ‘Employee Commencement Form’. 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). Let's Talk That’s all we focus on: You, your family, your wealth, your business and the legacy you (and we) leave. That’s it. Join Collins Hume on this amazing journey.

Superannuation is not like other assets as it is held in trust by the trustee of the superannuation fund. When you die, it does not automatically form part of your estate but instead, is paid to your eligible beneficiaries by the fund trustee according to the rules of fund, superannuation law, and the death nomination you made. Death nominations Most people have a death nomination in place to direct their superannuation to their nominated beneficiaries on their death. There are four types of death benefit nominations: Binding death benefit nomination - Putting in place a binding death nomination will direct your superannuation to whoever you nominate. As long as that person is an eligible beneficiary, the trustee is bound by law to pay your superannuation to that person as soon as practicable after your death. Generally, death benefit nominations lapse after 3 years unless it is a non-lapsing binding death nomination. Non-lapsing binding death benefit nomination - Non-lapsing binding death nominations, if permitted by your trust deed, remain in place unless the member cancels or replaces them. When you die, your super is directed to the person you nominate. Non-binding death nomination - A non-binding death nomination is a guide for trustees as to who should receive your superannuation when you die but the trustee retains control over who the benefits are paid to. This might be the person you nominate but the trustees can use their discretion to pay the superannuation to someone else or to your estate. Reversionary beneficiary – if you are taking an income stream from your superannuation at the time of your death (pension), the payments can revert to your nominated beneficiary at the time of your death and the pension will be automatically paid to that person. Only certain dependants can receive reversionary pensions, generally a spouse or child under 18 years. If no death benefit nomination is in place - If you have not made a death benefit nomination, the trustees will decide who to pay your superannuation to according to state or territory laws. This will often be a financial dependant to the legal representative of your estate to then be distributed according to your Will. Is your death benefit valid? There have been a number of court cases over the years that have successfully contested the validity of death nominations, particularly within self managed superannuation funds. For a death nomination to be valid it must be in writing, signed and dated by you, and witnessed. The wording of your nomination also needs to be clear and legally binding. If you nominate a person, ensure you use their legal name and if the superannuation is to be directed to your estate, ensure the wording uses the correct legal terminology. Who can receive your superannuation? Your superannuation can be paid to a SIS dependant, your legal representative (for example, the executor of your will), or someone who has an interdependency relationship with you. A dependant is defined in superannuation law as ‘the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship’. An interdependency relationship is where someone depends on you for financial support or care. Do beneficiaries pay tax on your superannuation? Whether or not the beneficiaries of your superannuation pay tax depends on who the superannuation was paid to and how. If your superannuation is paid as a lump sum to a tax dependant, the superannuation is tax-free. The tax laws have a different definition of who is a dependant to the superannuation laws. A tax dependant for tax purposes is your spouse or former spouse, your child under the age of 18, or someone you have an interdependency relationship with. Special rules exist if you are a police officer, member of the defence force or protective service officer who died in the line of duty. If your superannuation is paid to your estate, the tax laws use a ‘look through’ approach when superannuation death benefits are distributed to the deceased’s legal representative. This involves determining whether the final recipient of the superannuation is a dependant or a non-dependant of the deceased. If the person is not a dependant for tax purposes, for example an adult child, then there might be tax to pay. Let's Talk That’s all we focus on: You, your family, your wealth, your business and the legacy you (and we) leave. That’s it. Join Collins Hume on this amazing journey.

A message of support and a bit of direction for Collins Hume clients during NSW COVID19 lockdown. Things are taking a little longer than usual as we assist our business clients in lockdown distress. If you have an enquiry about government support, we will endeavour to get back to you ASAP but in the meantime check out these resources to get the ball rolling: Support for NSW businesses impacted by COVID-19 www.service.nsw.gov.au Keep as positive as possible everyone.

What government support is available to NSW business? If your business has been adversely impacted by the recent lockdown in NSW, support is available. On 13 July 2021, the NSW and Federal Governments announced their economic support package aimed at supporting businesses and residents with the recent COVID-19 lockdown. We've outlined the key economic support measures being offered for dealing with the economic ramifications of the health and safety requirements currently being experienced by our community. The NSW and Federal Governments have announced a series of measures to support business during extended lockdowns of four weeks or more: Up to $15,000 through the expanded NSW 2021 COVID-19 business grants program Up to $10,000 cashflow support per week for employers NSW micro business grants for businesses with a turnover between $30,000 to $75,000 NSW payroll tax deferrals and a 25% payroll tax waiver NSW Rent protections and grants NSW Sector support for the arts and accommodation sector Small Business fees and charges rebate up to $1,500. Please visit https://www.service.nsw.gov.au/campaign/covid-19-help-businesses/grants-loans-and-financial-assistance for the full listing and more details. Tips before you start your application You can streamline the process of applying for business support by ensuring: Your business and contact details are up to date on the Australian Business Register Your personal and business details are up to date and you have a MyServiceNSW account with a business profile Please assess your eligibility using the information available on the Service NSW website and if you believe you are eligible apply using your Service NSW business account. Some grant applications may require an accountant's prepared declaration as part of the grant submission process. Collins Hume will be able to provide assistance to our clients as we have done with previous NSW grant programs. Please contact Collins Hume in Ballina or Byron Bay on 02 6686 3000 should you require an accountant's letter or further assistance.

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.