ASIC’s new alert list offers guidance on suspicious investment“opportunities”
As a part of the government strategy to target investmentscams, ASIC and the Australian Competition and Consumer Commission (ACCC) – through the newly formed National Anti-Scam Centre – have published an investor alert list which mayhelp consumers to identify whether entities they are consideringinvesting with could be fraudulent, running a scam orunlicensed. While the list is not exhaustive, as new scams areappearing every day, any reduction of consumer harm,financially and non-financially, is surely a positive step.
According to the National Anti-Scam Centre, which commencedoperation on 1 July 2023, Australians reported a record$3.1 billion of losses to scams the previous year. The Centre isalready making inroads by highlighting the most harmful scamsand making it easier for Australians to report scammers, and itwill build its capabilities over the next three years, working on anew system to improve scam data–sharing across governmentand the private sector.
The new investor alert list replaces the previous list of“companies you should not deal with” issued by ASIC, and hasthe advantage of including both domestic and internationalentities that regulators are concerned about. These concernslargely relate to entities operating and offering services toAustralians without appropriate licenses, exemptions,authorisation or permission. The alert list also includes entitiesthat run impersonation scams, falsely claiming to be associatedwith legitimate and often well-known businesses.
ASIC recommends conducting the following checks beforehanding over any investment money:
Tip: You can consult the investor alert list at https://moneysmart.gov.au/check-and-report-scams/investor-alert-list.
ATO pauses “debts on hold” awareness campaign
In response to community feedback and perhaps to negative commentary in the media, the ATO has announced it is pausing its “awareness campaign around tax debts on hold”. It notes that the purpose of the letters it sent was to ensure that taxpayers had full visibility of their existing tax debts.Nonetheless, it will undertake a review into its overall approach to debts on hold before progressing any further.
If your small business has tax amounts owing to the ATO and hasn’t received a letter thus far, keep in mind that you may still have a debt on hold.
Many small business debts were put on hold entirely by the ATO (meaning debt amounts were not deducted from tax refunds or credits) during the COVID-19 pandemic’s rapidly changing business conditions, with the intention of giving these businesses a chance to recover and rebuild. The Australian National Audit Office reviewed this approach and found it to be inconsistent with the law, and the ATO then received clear advice that by law, any credits or refunds that a small business becomes entitled to must be used to pay off (offset) its tax debt. This action is generally automatic, and should apply even where the ATO is not actively pursuing the debt (such as was the case during the height of the pandemic).
Due to the legal requirement for offsetting, small businesseswith debts on hold may now find that any credits or refunds from lodged tax returns or BASs may be less than expected, or may even be reduced to zero. After the offsetting, any balance payable relating to your business’s debt on hold will remain on hold until it is paid in full.
You don’t need to actively do anything in relation to offsetting of debts, and you will only need to contact the ATO if you’d like to make payments towards your debt on hold or make a request for the ATO not to offset.
Tip: There are very limited circumstances where the ATO has the discretion not to offset a debt and to instead issue a refund.Contact us to find out more.
The easiest way to check whether a debt on hold exists is through ATO online services. You may need to download a file with all transactions on the applicable account to check, as debts on hold will not show as an outstanding balance on the account (because of their “on hold” status).
It’s important to be aware that debts on hold can be reactivated at any time where the ATO believes that there’s capacity for your business to pay. You will be notified if this is going to happen, usually in writing. A reactivated debt will show as an outstanding balance on the relevant account in ATO online services.
While the ATO acknowledges that its approach to communicating about debts on hold caused “unnecessary distress”, particularly to taxpayers whose debts were incurred several years ago, it has verified that all debts exist and that all taxpayers were previously informed when the debt was originally incurred through their notice of assessment.
Simplified payroll reporting and STP Phase 2: employers take note
While Single Touch Payroll Phase 2 (STP Phase 2) started on 1January 2022, many digital service providers have a deferral inplace to enable them to transition their customers over time.Under STP Phase 2, businesses report certain informationdirectly to the ATO through their payroll software, such as:
STP Phase 2 doesn’t change which payments employers needto report through STP, but it does change how those amountsneed to be reported.
Employers need to take note that STP Phase 2 changes requireyour input. Carefully review your payroll reporting codes toensure accurate data submission to the ATO through STP.
You will now start to see BAS data pre-filling by the ATO.It’simportant to cross-check the pre-filled information with yourpayroll records to prove the correct data has been submitted tothe ATO and ensure correct withholdings are remitted. Anyanomalies you identify may highlight errors in your systemconfiguration.
Don’t forget that when an employee leaves a job, informationmust be provided in the employer’s STP Phase 2 report, including the employment cessation date and the correct codeindicating why the employee left. Details of terminationpayments must also be reported to the ATO.
$20,000 instant asset write–off for small business: beware timing
Legislation is currently before Federal Parliament that proposes to allow a deduction of $20,000 (up from $1,000) for the instantasset write-off of depreciating assets acquired by smallbusiness entities in the period from 1 July 2023.These newrules were previously announced by the Federal Government inits May 2023 Federal Budget.
In the period from March 2020, as part of tax relief measuresarising out of the COVID-19 pandemic, temporary fullexpensing of certain depreciation assets allowed manybusinesses to write off the entire cost of certain assets. Thelatest Bill proposes that from 1 July 2023, under simplifieddepreciation rules, depreciating assets costing less than$20,000 (excluding GST), may be immediately deducted, wherethe asset is first used or ready for use in the year ending30 June 2024. Note that depreciating assets that are first usedor installed ready for use for a taxable purpose on or after1 July 2024 will be subject to the $1,000 threshold.
The $20,000 threshold will apply on a per–asset basis, so smallbusinesses will be able to instantly write off multiple assets.
The instant asset write-off rules are available to entities thatmeet the definition of “small business entity” and where theentity carries on a business with an aggregate turnover of lessthan $10 million. Connected entities to a small businesstaxpayer may also need to be considered to qualify for adeduction under the $20,000 instant asset write–off.
Depreciating assets that cost $20,000 or more are allocated toa small business entity general small business pool and can then be deducted at the rates of 15% in the year the asset isallocated to the pool and 30% in subsequent years.
If the balance of a small business entity’s general smallbusiness pool is less than $20,000 at the end of the incomeyear ending 30 June 2024, the small business entity will be able to claim a deduction for the entire balance of the pool.
JobKeeper assessment: Treasury report released
Treasury has released the Independent Evaluation of theJobKeeper Payment Final Report. The report considers boththe impact and processes of JobKeeper. The evaluationassesses the effectiveness of JobKeeper in achieving itsobjectives, and records lessons learned from the design andimplementation of JobKeeper, with a view to informing futurepolicy responses.
JobKeeper was a central pillar of the policy response inAustralia to the COVID-19 pandemic. It was a wage subsidyand income support program announced on 30 March 2020, asthe third instalment in a series of economic support packagesintroduced in the space of three weeks. Modifications to policydesign, including changes to eligibility criteria and the paymentrate and structure, were made following a three-month review.JobKeeper remained in place until 28 March 2021.
The report finds that JobKeeper provided certainty during acrisis, and its take-up was high. It provided support to aroundfour million employees – almost one-third of Australia’s pre-pandemic employment population – and around one millionbusinesses. Credible estimates suggest that JobKeeperpreserved between roughly 300,000 and 800,000 jobs.
With a total cost of $88.8 billion, JobKeeper was the one of thelargest fiscal and labour market interventions in Australia’shistory. The initial six months of the program cost approximately$70 billion. The first and second three-month extensions costaround $13 billion and $6 billion respectively.
JobKeeper was implemented with incredible speed and waswell managed, the report finds. The incidence of fraud was low, and in particular lower than for other ATO–administeredprograms and taxes such as the cashflow boost, GST taxreceipts and large corporate groups income tax.
However, the report says, narrow recipient eligibility andexclusions reduced the effectiveness of JobKeeper and hadnegative economic consequences.
Exclusions based on employee characteristics such as being ashort-term casual or temporary migrant worker compromisedthe efficacy of JobKeeper and “led to worse outcomes”. Inparticular, the exclusion of short-term migrants from JobKeeperlikely reduced the productive capacity of the Australianeconomy and constrained recovery in some sectors.
The report states that transparency requirements should bebuilt into policy design to “build public trust and enableappropriate scrutiny of public expenditures”. JobKeeper did notinclude in its design a public registry or disclosure requirementfor entities that received the payment.
JobKeeper was a policy designed for an extraordinary situation.While it was justified during the pandemic, such a policy shouldbe reserved for a macroeconomic crisis and is not appropriatefor industry or region-specific shocks or downturns in Australia, the report says.