Changes in tax laws and regulations can have significant implications for taxpayers.
We have gathered the latest tax alerts for April 2023, to help you gain a better understanding of the implications of tax changes, determine the most effective tax strategies, and ensure compliance with new tax laws and regulations.
Family trust rules and new guidance on contractors
Prefilling of PAYGW
From the July 2023 statement, PAYG withholding labels W1 and W2 will be prefilled for all monthly PAYG employers. Quarterly holders will find the information on their September 2023 statement.
The ATO is also piloting an employer reminder system for businesses with a late activity statement and STP-reported PAYG withholding. If you fail to lodge by the reminder date, the ATO will consider there are no corrections to report, and the recorded amounts will be added to your client account.
Final rules on family trusts
Under the ATO’s new approach, common tax planning strategies relying on the section 100A exemption covering trust distributions to companies and family members may no longer be available in some situations.
Taxpayers with a discretionary trust should discuss the implications with us, particularly where there are parent controllers of the trust and adult-aged child beneficiaries. The ATO website provides several case studies outlining common situations.
Employees vs. independent contractors
The draft guidance outlines the regulator’s priority areas, which include situations where particular risk factors are present and where an unpaid superannuation query has been received from a worker.
The guidance also indicates employers must have specific advice from an appropriately qualified third party confirming their classification of a worker as a contractor is correct.
Recordkeeping for self-education expenses eased
The new rules can be used when completing your 2022-23 tax return, while for employers, the change applies to the Fringe Benefits Tax year starting 1 April 2023.
Sharing economy reporting extended
Electronic platform operators for these services (such as Uber and Airbnb) are required to report all transactions involving Australian purchasers under new legislation passed in December 2022.
Annual TPRS reporting is already compulsory in industries such as building and construction, cleaning, courier, and security services.
Plug-in hybrid electric vehicles to face FBT
You can apply for the exemption if the hybrid vehicle was exempt before 1 April 2025 and there is a financially binding commitment to continue providing private use of the vehicle after this date.
No business activity could mean no ABN
If an ABN is identified as inactive, the ATO will contact the holder by email, SMS, or mail to check if the ABN is still required and explain the action required to keep it. Where the business is no longer operating, the ABN will be cancelled.