One of the many responsibilities SMSF trustees have every income year is valuing their fund’s assets at market value.

The market value of an asset is the amount that a willing buyer and seller would agree to in an arm’s-length transaction.  These valuations will be used  when preparing the fund’s accounts, statements and SMSF annual return (‘SAR’).

Asset valuations will be reviewed by an approved SMSF auditor as part of the annual audit prior to lodgment of the SAR.  The auditor will check that assets have been valued correctly and assess and document whether the basis for the valuations is appropriate given the nature of the asset.

Taxpayers should ensure they have their valuations done before going to the auditor.

It is the responsibility of the SMSF trustee to provide objective and supportable evidence to their auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund.

SMSF trustees should start researching now to find what type of evidence they need to support the valuation as this can take time.  For some asset types valuations must be undertaken by a qualified independent valuer.

Please contact our office for further information and assistance.

For Businesses

Temporary Increase to the Instant Asset Write-Off

Under current law, the small business instant asset write-off threshold is (less than) $1,000 for the 2025 income year.

However, the Government has announced that it will temporarily set the instant asset write-off threshold for small business entities at (less than) $20,000 for the 2025 income year.

Small businesses with an aggregated annual turnover of less than $10 million will generally be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a ‘per asset’ basis, so small businesses can instantly write off multiple assets.

Assets valued at $20,000 or more (i.e., which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.

The provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt-out will continue to be suspended until 30 June 2025.  From 1 July 2025, the instant asset write-off threshold will revert back to (less than) $1,000.

Relieving Energy Bill Pressures

The Government is providing direct energy bill relief for small businesses.  The Budget provides additional energy bill relief of $325 to eligible small businesses, to be paid in installments throughout 2024-25.

Building Cyber Resilience for Small Businesses

The Government is supporting small businesses to be secure online while they utilise digital opportunities, by funding the following:

• Cyber Wardens program to provide free, online training for small business owners and their staff to help drive cultural change and a cyber safe mindset in Australian small businesses.
• Small Business Cyber Resilience Service to help small businesses build their cyber resilience and provide support when affected by a cyber incident.
• Cyber Health Check online interactive tool to enable small and medium businesses to self-assess their cyber security maturity.

The Government is also developing a ransomware playbook to provide guidance on how to prepare for, respond to and recover from, a ransomware or cyber extortion incident.

For Individuals

Personal Income Tax Measures

From 1 July 2024, the revised stage three personal tax cuts effected by the Government will provide some tax relief to income earners for the 2024/25 financial year.  The following table outlines the marginal income tax rates and thresholds that apply for resident individuals from 1 July 2024, plus for comparative purposes the rates and thresholds for the 2023/24 financial year.

Australian Resident Individual Income Tax Rates

Superannuation on Paid Parental Leave

The Government has announced that it will pay superannuation on Commonwealth government-funded Paid Parental Leave for births and adoptions on or after 1 July 2025.

Eligible parents will receive an additional payment based on the Superannuation Guarantee (12% of their Paid Parental Leave payments), as a contribution to their superannuation fund.

Freezing Social Security Deeming Rates

The Government will freeze social security deeming rates at their current levels for a further 12 months until 30 June 2025 to support age pensioners and other income support recipients who rely on income from deemed financial investments, as well as their payment, to manage cost of living

pressures.

Tertiary Education System Reforms

The Government will provide funding to implement the first stage of reforms to Australia’s tertiary education system. Of note, this includes funding:

• to limit the indexation of the Higher Education Loan Program (and other student loans) debt to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023, subject to the passage of legislation; and
• to establish a new ‘Commonwealth Prac Payment’ of $319.50 per week (benchmarked to the single Austudy rate) from 1 July 2025 for tertiary students undertaking supervised mandatory placements as part of their nursing (including midwifery), teaching or social work studies.

Energy Bill Relief for Households

The Government is providing direct energy bill relief for every Australian household. From 1 July 2024, all households will receive a $300 rebate, which will be automatically applied to their electricity bills in quarterly instalments.

By paying their tax bill in full and on time, taxpayers can avoid paying the general interest charge (‘GIC’), which is currently 11.34%, and which accrues daily for any overdue debts.

The ATO advises taxpayers that, if their business is dealing with financial difficulties, there are some options to help make their tax bill “less taxing”.

Taxpayers who are struggling to pay in full or on time may be eligible to set up a payment plan.  If they owe $200,000 or less, they may be able to do this themselves using online services.  If they cannot do so, or they owe more than $200,000, they can contact the ATO to discuss their options.

Taxpayers can ask the ATO to remit their GIC.  The ATO will then consider whether the tax bill was paid late because of circumstances that were:

• beyond the taxpayer’s control, and what steps the taxpayer took to relieve the effects of those circumstances; or
• within the taxpayer’s control, but led to results that the taxpayer could not foresee.

The ATO reminds employers they need to keep on top of their payroll governance.  This includes:

• using their tax and super software to record the amounts they pay;
• withholding the right amount of tax; and
• calculating superannuation guarantee (‘SG’) correctly.

As 30 June gets closer, employers should check their reporting obligations, along with any upcoming key dates, including for:

• PAYG withholding — From 1 July, the individual income tax rate thresholds and tax tables will change, which will impact their PAYG withholding for the 2025 tax year;
• SG rate change — From 1 July, the SG rate will increase to 11.5%. Employers must pay their SG contributions by 28 July in full, on time and to the right fund; and
• Single touch payroll (‘STP’) reporting — Employers should remember to make STP finalisation declarations by 14 July for all employees the employer has paid during the financial year, and also check their employees’ year-to-date amounts are correct.

The Government recently passed changes to the Stage 3 tax cuts applying from 1 July 2024.  These changes provide a tax break to low and middle-income earners by:

• reducing the 19% tax rate to 16%;
• reducing the 32.5% tax rate to 30% for incomes between $45,000 and a new $135,000 threshold;
• increasing the threshold at which the 37% tax rate applies from $120,000 to $135,000; and
• increasing the threshold at which the 45% tax rate applies from $180,000 to $190,000.

The Medicare levy low-income thresholds for the 2024 income year will also be increased.

Businesses that pay contractors to provide certain services may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year.

From 22 March, the ATO will apply penalties to businesses that:

• have not lodged their TPAR from 2023 or previous income years;
• have received three reminder letters about their overdue TPAR.

Taxpayers that do not need to lodge a TPAR and taxpayers that no longer pay contractors can submit a ‘non-lodgment advice form’.  Please contact our office if you require further assistance with overdue TPARs.

A class action on behalf of retail business owners impacted by the second-wave lockdowns has been filed with the Supreme Court of Victoria.  Retail business owners can meet the criteria to join the action providing:

• As at 1 July 2020, they operated a business that supplied goods or services to the public from physical premises located in Victoria; and
• members of the public acquired those goods and services by attending the physical premises; and
• as a result of the restrictions between July and October 2020, the business was required to shut or operate at a reduced capacity and/or members of the public were in some way restricted or prohibited from visiting the retail premises which caused the business to suffer financial losses.

Eligible business owners can register as a member of the Business Losses Class Action by registering before July 8, 2024.  Further information regarding eligibility and the registration process is available at:  Class Action.

If you believe that you may be eligible or have any questions about this action, please contact our office.

The ATO is remitting failure to lodge penalties for eligible small businesses.  Businesses which have not yet taken advantage of the ATO’s lodgement penalty amnesty only have until 31 December 2023 to do so.

Businesses must meet the following criteria in order to be eligible for the amnesty:

• had an annual turnover under $10 million when the original lodgement was due;
• have overdue income tax returns, business activity statements or FBT returns that were due between 1 December 2019 and 28 February 2022; and
• lodge between 1 June and 31 December 2023.

Importantly, when taxpayers lodge their eligible income tax returns, business activity statements and FBT returns, failure to lodge penalties will be remitted without the need to apply.

The amnesty does not apply to privately owned groups or individuals controlling over $5 million of net wealth.

Directors who bring their company lodgements up to date can also have penalties remitted and, if they are reliant on company lodgements to finalise their own tax affairs, any failure to lodge penalties will be remitted.  This also applies to eligible lodgements made between 1 June and 31 December 2023.

Employers should ensure they declare and estimate their annual remuneration as requested on the WorkCover annual Rateable Remuneration Submission.

Each financial year, employers receive both a Workcover Insurance Premium and a Rateable Remuneration Submission. In paying the premium, employers can often overlook the requirement to complete the annual Rateable Remuneration Submission.

The annual Rateable Remuneration Submission requires the employer to certify the actual rateable remuneration and estimate the following year’s remuneration.  A failure to do so, can result in interest and penalties being applied.   To assist clients with this process, we will include the relevant dates in our lodgement obligations section of the relevant newsletter.

In addition, employers are reminded of the need to revise the estimate of rateable remuneration if it exceeds or is likely to exceed the most recent estimate of remuneration by 20%.  WorkSafe should also be notified of any changes to your workplace or business activity, a change in your legal business, a change of address or the contact person for your insurance changes.

If you require any further assistance or clarification regarding your WorkCover obligations please contact our office.

Employers are reminded that, in relation to their SG obligations for the quarter ending 31 December 2023, the due date is 28 January 2024.

If the correct amount of SG is not paid by an employer on time, they will be liable to pay the SG charge, which includes a penalty and interest component.

The SG rate is 11% for the 2024 income year.