And now, direct from the ATO

And now, direct from the ATO

And now, direct from the ATO

Editor: The following are provided as excerpts from reminders to practitioners which have been received from the ATO during the past month.

Setting up email notifications – portal mail
The ATO recommends that practitioners set up an ‘email notification’ for their practice inbox and personal inbox so they don’t miss any portal messages the ATO sends them.

Such an email notification will let them know that a message is in their portal inbox, but it is important to note that this notification is only for portal mail.

Practitioners will still need to check the Client communication list (CCL) in the portal for online communications the ATO has sent for their clients (including communications for clients who have linked the ATO to their myGov account).

Editor: The CCL function in the Tax (and BAS) agent portals gives them online access to communications the ATO has issued for their clients, and they can:

  • View most letters, notices (such as notices of assessment), emails and SMS messages as soon as the ATO knows the communication has been sent;
  • See communications for clients who have linked the ATO to their myGov account;
  • Access up to five years of communications; and
  • Search for communications in a more practical way.

The ATO will continue to add more communications types to enhance this function further.

Note that communications sent to a client’s myGov Inbox are only available for practitioners to view in the CCL (i.e., they will not receive the communication via paper or email).

How to set up an email notification
Once logged into the portal:

  • Go to Mail in the left menu and select Inbox;
  • Find Email notification on the right side of the Inbox and select Setup;
  • Check the email address entered is correct, or update it; and
  • Select Submit.

Ref: ATO website, 29 April 2016

New checklist for R&D
The ATO has released a new checklist for Research and Development (R&D) tax incentive claimants, to help clients access the program and minimise errors when applying.

Editor: The R&D tax incentive (administered jointly by AusIndustry and the ATO) provides targeted R&D tax offsets designed to encourage more companies to engage in R&D.

The checklist will help to:

  • Self-assess the eligibility of a client’s company and of the R&D activities they wish to apply for;
  • Source valuable advice on the records they need to keep;
  • Correct mistakes and challenge decision; and
  • Recognise the red flags the ATO watches out for when dealing with promoters of aggressive R&D arrangements.

Div 293 deferred debt assessments
Clients with Division 293 tax liabilities will soon receive their notice assessment.

Editor: This is the additional ‘contributions tax’ imposed on some high income earners.

Some of these notices may include deferred debt amounts, which are assessed on a client’s defined benefit contributions (the amount of defined benefit contributions represents the annual increase in a defined benefit superannuation account, which is based on the benefit individuals are expected to receive when they leave the fund).

Ref: ATO website 17 May 2016

Editor: Note that the ATO will also send an email or SMS to clients with Division 293 tax liabilities to let them know a notice of assessment is issuing to their myGov inbox.

Tax practitioners will be able to view a client’s assessment via the Client communication list in the Tax Agent Portal.

New tax rules for property sales over $2 million
Australian residents buying or selling real property with a market value of $2 million or more need to be aware of new rules which come into effect on 1 July 2016.

Editor: The new rules have been introduced to ensure foreign residents meet their CGT liabilities. Amounts withheld will be credited against their final income tax liability assessed on foreign residents’ income tax returns.

Assistant Commissioner Macolm Allen said Australian residents who are selling a taxable Australian residents who are selling a taxable Australian property with a market value of $2 million or more need to obtain a clearance certificate from the ATO, and provide that certificate to the buyer by settlement, or the buyer will be required to withhold 10% of the sales price and pay this to the ATO.

“We encourage all Australian residents who are looking to sell property with a value of $2 million or more to apply for a clearance certificate as early as possible.

“It is easy to obtain a clearance certificate. The form is available to download through our website, and there is no fee for clearance certificate applications.”

The application process is designed to be straightforward and should not take much time to complete for most sellers.

“Sellers can complete and lodge the form themselves, or it can be completed and lodged on their behalf by a third party, such as their solicitor or accountant,” Mr Allen said.

An online version of the form will be available from 27 June 2016. Where an application is submitted online, most certificates will be issued electronically within a few days. Paper applications may take up to 2 to 4 weeks to process.

However, Mr Allen has also said that “There may be some delays in cases where applicants have incomplete tax records, for example where tax returns have not lodged for the last two years.”

“We will follow-up where we see evidence of poor tax behaviour, just as the Australian community would rightly expect of us”.

Clearance certificates are valid for 12 months from issue, and must be valid at the time they are made available to the buyer.

Penalties apply where sellers make false or misleading declarations to the ATO, or where the buyer fails to withhold when they should.

The ATO has been working with real estate agents, conveyancers and legal practitioners to ensure the industry is aware of how to help their clients meet their withholding obligations.

Ref: ATO media release “New tax rules for property sales over $2 million”, 19 May 2016

Lodging deferral requests during peak lodgement periods
Because the number of deferral requests the ATO receives increases around peak lodgement dates, they may take up to 28 days to process a request during this time.

Do not resend a further deferral application for the same clients within the 28-day processing period, as this could cause possible delays to the processing of the original request.

If the deferral request is approved, but not processed in the ATO’s system until after the lodgement is made, the ATO will automatically cancel any warning letters that have issued and remove any penalties or interest that have been imposed.

In this instance, agents can also disregard reminders to lodge.

Ref: ATO website – Tax Professionals, 11 May 2016

Check your AUSkey credentials
Editor: The ATO is advising tax practitioners that, in order to ensure they can continue to lodge income tax returns on the new Practitioner lodgement service (PLS), they need to check their AUSkey credentials are up to date in Access Manager.

“If you do not have an AUSkey
An AUSkey may not be required to use the PLS but is needed to access the Tax agent and BAS agent portals. Your software provider can guide you on what type of AUSkey is right for you.

There are some services that are currently only available in the portal such as deferral requests and the Client communication list. For you to use these services you will need an AUSkey.

If you use desktop software
You will need to check and assign lodgement permissions for you and your staff in Access Manager so you can continue lodging when you switch to PLS.

If you use online (cloud based) software
If you use online software you will not need an AUSkey to interact with us within cloud software. If you have been asked by your software provider to notify us, you must do this to ensure you can continue to interact with us securely through your cloud software.

You still need an AUSkey to access our other services like the portals. Check your Access Manager permissions to ensure that your accesses are still current.”

Ref: ATO website, 18 May 2016

Electronic revisions no longer change preferences
In the past, when a client had lodged their own paper activity statements, but then went to their tax agent when they make a mistake or needed a revision, when the agent lodged an electronic revision, this changed the clients’ ‘channel preference’ with the ATO from paper to electronic.

However, the ATO has listened to feedback and now changed their system.

Now, when an agent lodges an electronic revision for a paper activity statement, the ATO won’t automatically change the client’s preference to electronic.

This change only affects revisions lodged electronically by registered tax and BAS agents.

Clients will still have their preferences changed from paper to electronic if they:

  • Link the ATO to their myGov account;
  • Lodge a one-off electronic activity statement; or
  • Lodge an electronic revision.

Ref: ATO website, 20 April 2016

Real property transfers reporting
From 1 July 2016, all state and territory revenue collection agencies will be collecting and reporting information to the ATO about all transfers of freehold or leasehold interests in real property located in all states and territories.

For each transaction, the report will include:

  • Property details including land title information, property address and other descriptors;
  • Transactional information including transfer price, contract date and settlement date; and
  • Identity data of the purchaser/transferee and vendor/transferor.

They may obtain this information from solicitors, law firms, conveyancers, and self-preparers of property transfers.

Ref: ATO website, 18 May 2016

Editor: Note that, from 1 July 2017, government entities at the federal, state and local levels will need to report the total payments they make to business for providing services.

Family assistance payments
Any clients who wish to claim family assistance payments for the 2014/15 financial year (including family tax benefit, child care benefit and single income family supplement) must lodge their lump sum claim with the Department of Human Services (Centrelink) by 30 June 2016.

Therefore, such clients should lodge their lump sum claim with Centrelink as soon as possible, even if they lodge their 2015 income tax return (or notifying Centrelink that a return is not necessary), even by one day, will result in the clients missing out on some or all of their family assistance payments for the 2014/15 financial year.

Ref: ATO website, 2 May 2016

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