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[av_heading heading=’The News Brief_20210317′ tag=’h1′ style=’blockquote modern-quote modern-centered’ subheading_active=’subheading_below’ show_icon=” icon=’ue800′ font=” size=’6vw’ av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’20’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=’custom-color-heading’ custom_font=’#000000′ icon_color=” margin=’0′ margin_sync=’true’ padding=’0′ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kagyk’ sc_version=’1.0′ admin_preview_bg=’rgb(34, 34, 34)’][/av_heading]

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[av_heading heading=’ATO clarifies JobKeeper repayment tax deductibility’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kleh1′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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The Tax Office has now published new guidance on the tax consequences for eligible businesses who have received JobKeeper payments and are now looking to repay those amounts.

According to the ATO, the voluntary repayment of JobKeeper may be deductible in limited circumstances if it helps a business achieve its objective, including if the payment is made to “prevent reduction in business” or “publicise and promote your business in the short term”.

“Provided you treated your original JobKeeper payments correctly as assessable income, if you then act in good faith and use your best endeavours to determine whether you are entitled to a deduction for the voluntary repayment, we will generally not apply compliance resources to confirm if the payment is deductible,” said the ATO in its online update.

“Businesses that are unable to claim a deduction may still wish to make a voluntary repayment. A voluntary repayment equal to the JobKeeper received less the tax paid on that amount will ensure a tax-neutral outcome overall.”

The ATO also notes that all JobKeeper payments are assessable income and voluntary repayments do not reduce the amount received and that must be included in a business’s assessable income.

Tax & Super Australia tax counsel John Jeffreys said the ATO had not categorically clarified if JobKeeper repayments were tax-deductible.

“However, it has offered somewhat of a lifeline to businesses by saying they can deduct the repayment, so long as their reasons for making the repayment is in line with the two points given on the ATO’s website,” Mr Jeffreys said.

“It could be interpreted that the ATO isn’t giving a total red or a green light for deductions, but perhaps an amber light. If you do run the amber light, the ATO is probably not likely to chase you.

“The only way to clear the ambiguity on the issue of if JobKeeper repayments are tax-deductible, is for it to be confirmed in legislation.”

The ATO’s guidance comes as a number of large corporates have publicly come forward to return JobKeeper payments on the back of increased profits and public pressure.

According to the ABC, 20 companies have since declared they will return $144 million in wage subsidies, although the ATO has received just $20 million so far.

The ATO notes that businesses choosing to return the payments will need to first contact the Tax Office, as voluntary repayments cannot be made through usual ATO payment channels and require a special payment reference number.
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[av_heading heading=’Capital city auction volumes rise with 2,232 auctions held and 83.2% successful’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kbbkp’ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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Auction volumes rose across the combined capital cities this week, with 2,232 homes taken to auction; the second highest number of weekly auctions over the year-to-date. The higher volumes returned a preliminary auction clearance rate of 83.2%, coming in slightly below last week’s preliminary figure of 84.5%, which by Wednesday revised down to 80% as final results were collected.  A similar 2,274 auctions were held over the same week last year, however close to 20% fewer homes sold (65.3%).

Across the individual property types, houses have been the standout performer in 2021 so far, with clearance rates above 80% for seven consecutive weeks now, while across the unit market an average of 70% have sold at auction this year.

In Melbourne, 1,094 properties were taken to auction this week, returning a preliminary auction clearance rate of 80.3%. Last week, a lower 487 homes were auctioned across the city with 75.2% clearing and last year, 1,201 auctions were held and a 65.6% clearance rate was achieved.

Sydney returned a preliminary auction clearance rate of 87.4% this week, with 817 properties taken to auction. Once the auction results are finalised, this is likely to be the sixth consecutive week the city has seen over 80% of auctions successful.  Last week’s final clearance rate came in at 82.9% across a lower 789 auctions. One year ago, 767 auctions were held and 68.1% sold.

Canberra was the best performing of the smaller auction markets with a preliminary auction clearance rate of 95% this week.

Next week, auctions markets are set to be tested across substantially higher volumes, with CoreLogic currently tracking around 2,700 scheduled auction events.
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[av_heading heading=’How to fix your credit’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3khdcm’ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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When the time comes to apply for a home loan, banks and lenders are going to look very closely at how you have managed credit in the past.

The easiest and most obvious way for them to do this is to look at your credit score, which is a track record of how well you’ve handled it previously.

If you’ve been known to miss payments here and there, or worse, then there is some chance your credit score has been hurt. The good news is there are a few things you can do to improve your credit score and get things back on track, so you have the best chance of being approved for finance in the future.

Know the Score

You can’t start to improve your credit score without knowing what it actually is. The good news is that finding out your credit score is easy, and it doesn’t cost anything.

Get in touch with one of the major credit reporting agencies and ask for a report. It’s normally possible to get one free report on your credit score each year, which should be more than enough.

Fix the Errors

Sometimes your credit score can be low for reasons that are not your fault. If any errors have been made, it’s important to identify them and get them fixed.

For example, if you’ve paid a debt or bill in full, and it is not reflected correctly on your credit record, it will lower your credit score. Contact the credit agency and have them investigate the matter.

Money Owing

A lender is able to report any money that is overdue by 60 days as a default, if it amounts to more than $150. This can reflect on your credit report for five years.

If there are any late payments that are not accurate, follow it up with both the reporting agency and the creditor.

Pay Bills on Time

One of the quickest and easiest ways to improve your credit score is to simply pay your bills on time. These days, the reporting agencies can see exactly when you paid your bills, and they will take this information into account.

If you can pay your bills early, that is even better. A good rule of thumb is to pay your bills the moment they arrive. This can really help. If you wait until the last day to pay a bill, by the time it is processed, it is likely to be late already.

Use Credit Sparingly

If you continually apply for credit or loans of any kind, these will not only show up on your credit file, but will also lower your credit score.

If you have applied for credit and have been rejected regularly, this will make it very difficult to get finance in the future, as lenders can see what has been happening.
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[av_heading heading=’‘Cyber reality check’: COVID-19 sees a rise in data breaches’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kcf91′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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A 2020 cyber-security survey released by BDO and AusCERT on Tuesday highlighted a failure among organisations to identify the cyber-security risks posed by rapid digitisation, as the rate of data breaches more than doubled year-on-year.

“While we have seen significant improvements in cyber security and awareness across Australian and New Zealand organisations as a result of the pandemic, the majority still fail to interpret their threat landscape accurately,” said Leon Fouche, national cyber-security adviser at BDO. 

“Many organisations don’t understand which adversaries are targeting them, what assets they seek to compromise, and how they will do so.”

The survey found that data breaches through 2020 more than doubled compared with the previous year, with malicious hacking increasing by 91 per cent while accidental disclosures by staff rose almost 60 per cent. 

Last year emerged as an unprecedented digital test for businesses, Mr Fouche said, as industries and governments were forced to make years of digital progress over the course of a few months, highlighting serious risks for those who didn’t have adequate cyber-security measures in place before moving to digitise. 

“Never before has the modern world seen such a rapid, global rush to digitise business practices,” Mr Fouche said. “Boards are now more cyber engaged than ever before, and more chief information security officers are being appointed.”

As a result, cyber-security concerns are rising at a board level, according to the report, which highlighted an 11 per cent increase in the appointment of chief information security officers in 2020, and a rise of cyber-risk reporting, up by 18 per cent. 

However, respondents reported being less concerned with accidental disclosure than in previous years, despite accidental disclosures accounting for a significant portion of all incidents. 

“These predictions suggest many organisations don’t understand their cyber threats and risks,” Mr Fouche said, “which could mean they are focusing their cyber investment in areas they potentially won’t need, and under-investing in the areas they will.”

One of these vulnerable areas are supply chains, which are more than 50 per cent likely to be exposed to cyber threats, according to the survey. For businesses operating without cyber-security measures in place, reports of supply chain breaches more than tripled over the same period. 

“Our findings highlight the importance of third-party risk assessments to build resilience through supply chains,” Mr Fouche said. “The rise in third-party breaches is not surprising and has been on the radar of cyber decision-makers for a long time.”

In the wake of the pandemic, and the surging rate of cyber attacks that accompanied it, organisations are coming to terms with the need for ongoing cyber-security measures, Mr Fouche said. “Now, more than ever, Australian and New Zealand organisations understand the importance of clear, ongoing visibility into their cyber threats and risks, and that cyber security cannot be just an IT issue,” the cyber-security adviser said. “It is a whole-of-business issue.”
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[av_heading heading=’Finding opportunities for tax deduction strategies during contribution cap changes’ tag=’h1′ style=” subheading_active=” show_icon=” icon=’ue800′ font=” size=” av-medium-font-size-title=” av-small-font-size-title=” av-mini-font-size-title=” subheading_size=’15’ av-medium-font-size=” av-small-font-size=” av-mini-font-size=” icon_size=” av-medium-font-size-1=” av-small-font-size-1=” av-mini-font-size-1=” color=” custom_font=” icon_color=” margin=” margin_sync=’true’ padding=’10’ icon_padding=’10’ link=’manually,http://’ link_target=” id=” custom_class=” template_class=” av_uid=’av-kf3kcf91′ sc_version=’1.0′ admin_preview_bg=”][/av_heading]

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The contribution caps which are set to increase due to indexation will provide an opportunity to formulate effective tax deduction strategies, but following ATO guidance will be crucial, according to a technical specialist.

The release of the Average Weekly Ordinary Times Earnings (AWOTE) figures for the December 2020 quarter means the concessional contribution cap and the non-concessional contribution caps are set to increase due to indexation from 1 July 2021.

SuperConcepts technical support executive manager Nicholas Ali said the use of an unallocated contributions account can provide a beneficial strategy for SMSFs where members are claiming a tax deduction for concessional contributions.

“An unallocated contributions account (or ‘contributions reserve’, as they are sometimes called) entitles the trustee to ‘warehouse’ contributions for up to 28 days after the end of the month in which the contribution was made,” he said.

“This is enshrined in the Superannuation Industry (Supervision) Regulations 1994 (SIS Reg 7.08[2]). As explained by the Australian Taxation Office (ATO) in Taxation Ruling TR 2010/1, contributions are eligible for deductibility in the year they are received by a superannuation fund; however, they are not counted towards the member’s contribution cap until they are allocated to the member.”

Mr Ali noted this means if a contribution to an SMSF is received in June 2021 but not allocated to the member until July 2021, it will be eligible for deductibility in the 2020–21 financial year, but it will count towards the relevant cap in the 2021–22 financial year.

Where a member of an SMSF wishes to utilise such a strategy, Mr Ali said it will be essential to ensure the fund’s trust deed allows for an unallocated contributions account strategy.

“The contribution is allocated within the 28-day requirement and there must be evidence of the receipt of the contribution,” he said.

Furthermore, Mr Ali noted there needs to be a Trustee Resolution detailing the trustee’s decision to defer the allocation of the contribution until the next financial year as per Regulation 7.08(2) of the SIS Regulations A Section 290-170 Notice of intent to claim or vary a tax deduction for personal super contributions form (NAT 71121).

“Trustees should also ensure the ATO is notified of the use of the strategy by completing and lodging a Request to Adjust Concessional Contributions (NAT 74851) by the time the fund’s SMSF annual return and the individual’s income tax return are lodged,” he said.

“This is important; otherwise, the contribution will be reported in the SMSF annual return in the year in which it was received, which may mean the ATO may believe the member has exceeded their concessional contributions for the year.”

In a case study provided, Trevor is 66 and retired, wishes to maximise his tax-deductible contribution to super in the 2020–21 financial year to offset his assessable income. He has not used any of his concessional cap for the 2021 financial year.

“As the concessional cap will increase to $27,500 from 1 July 2021, Trevor can make a $25,000 concessional contribution in 2021, as well as a $27,500 concessional contribution in the month of June 2021, which will remain in an unallocated contributions account for the remainder of 2021 financial year, to then be allocated to him by 28 July 2021,” Mr Ali explained.

“Trevor will be able to utilise the tax deduction of $52,500 ($25,000 + $27,500) in the year of contribution (2021 financial year), but will not have an excess concessional contribution, as the $27,500 will be allocated to him by the trustees in the following year (2022 financial year).”
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Sources: Domain, Accountants Daily, SMSF Adviser and CFH Partners
Disclaimer: This is general information only and is subject to change at any time. Your complete financial situation will need to be assessed before acceptance of any proposal or product. The Content provided herein has been prepared for informational purposes only. The Content does not constitute tax, legal or accounting advice and should not be relied upon as such. You should seek tax, legal or accounting advice before acting or relying on any Content.

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