August News: Pay less Payroll tax, ATO Scams and more

Welcome to the August newsletter. In this newsletter we will discuss:

• Be aware of ATO scams
• How to pay less payroll tax
• Tax effective strategies on unlocking equity in your property portfolio
• Draft legislation on car expense deductions

Be careful of ATO scams

We have received various client phone calls in relation to the ATO ringing them up requesting the following:

• Personal financial information
• Bank account details
• Pay ATO debts and transfer cash into a supposed “ATO bank account”
• Bring a cheque to a court room in order to settle an ATO debt

We have also been advised that clients have received emails requesting for their bank account details in order to receive an ATO refund.

Please be aware these are all frauds and do not provide any personal financial details over the phone or via email. If there is a refund to be received then the ATO would contact us directly so never provide your financial details over the phone or via email to a purported ATO officer.

Please see a website link below to show how an ATO scam may look like:
https://www.ato.gov.au/general/online-services/in-detail/online-security/how-to-verify-or-report-a-scam/

Would you like to pay less Payroll tax?

Payroll tax is payable by an employer once their wages, super and fringe benefits exceed $750,000 per year but the payroll tax is levied on the excess over $750,000. There are avenues to reduce your payroll tax liability and these rebates are discussed below:

Jobs Action Plan

This provides a rebate of $5,000 for new jobs created of your payroll tax liability. 

Fresh Start Support

This provides a one-off amount of $1,000 that can be claimed at the first anniversary of an employee’s start date.

What are the eligibility requirements?

In order to receive the rebate all the following conditions must be met:

• A person is employed, full-time, part-time or on a casual basis in a new job.
• The employment commences on or after 1 July 2011
• The employment is maintained for a period of at least 2 years
• The services of the employee are performed wholly or mainly in NSW
• No rebate is payable to the employer in relation to the employee such as apprentice/trainee rebate
• The employee cannot be a contractor of the employer
• The vacancy period in the position is less than 30 days in each year of employment
• In order to receive the rebate you must register within 30 days of the person commencing employment

What is a new job?

A new job is created if the number of your full-time equivalent employees increases and the number of your full time employees are maintained for over 2 years from the creation of the new position.

The payment of the rebate is made by making a payment of $2,000 in the first year and $3,000 in the second year.

Please contact us if you need any further assistance

Do you plan to unlock equity from your properties?

With increasing house prices you may want to unlock the equity from your properties to invest or buy some personal items.

There are certain tax issues in doing this and these are discussed below:

If you borrow against your equity in your own home or you use the equity in your investment property to buy an investment such as another property or share portfolio then the interest on the new loan is tax deductible

If you borrow against your equity in your own home or you use the equity in your investment property to buy personal items such as furniture for your home or to pay school fees then the interest on this new loan is NOT tax deductible

If you borrow against the equity in your investment property to purchase a new home to live in then the interest on the loan is NOT tax deductible

Your investment property loans should be interest only as the interest on the loans are tax deductible and you should be making any capital repayments against your home loan debt as the interest on your home loan is not tax deductible.

In order to maximise your interest deductions you should ensure that your offset account should be linked to your home loan and NOT your investment loans so that you can maximise your interest deductibility.

Draft legislation on car expense deductions

Draft legislation has been released to amend how you can claim deductions on work-related travel. The proposed amendments will remove the 12% cost method and the one-third of actual expenses method. The logbook method will be maintained but the cents per kilometre method will be amended by having one rate only of 66 cents per kilometre for all cars.
We hope you enjoyed this article and please contact us if you have any questions. 

Disclaimer - The material contained in this newsletter does not constitute advice. DPL is not responsible for any action taken in reliance on any information contained in this newsletter. Anyone reading the newsletter should not act upon material contained in this newsletter without appropriate consultation