theTAXAGENT

Issue 59 June 2013

Lodgment program 2013–14 begins 1 July  are you ready?

ContentsNews 3–11 n Lodgment program 2013–14 begins 1 July – are you ready?

n Half a million former clients now off the books n Progress of the Tax practitioner action plan 2011–2015 n Tax Time 2013 publications available nown New digital magazine for tax timen Expansion of income testingn What’s new for pre-filling in 2013?

n Fuel tax credit rate changes from 1 July 2013n Correcting GST or fuel tax credit errorsn Superannuation changes for employers n Voluntary entry into PAYG instalmentsn Changes to ABN registration n New test case registern Our approach to debt collection

LodgmeNt 12–17 n Making reporting simplern Private health insurance – changes to tax return for individuals n Small business simplified depreciation – form changesn Lodgment dates for PAYG withholding reportsn PAYG withholding annual reports are due soon

n SMSFs must lodge returnsn Ensure you have your clients’ bank account detailsn Selling or closing business checklistn Extended petroleum resource rent tax – what it means

for your clients

CompLiaNCe 18–21 n A reminder for trustees to make their resolutions by 30 June n Anti-tax avoidance campaign for 2013n The importance of reviewing your client’s consolidation claimsn Risk reports

n ABN entitlement checks continuen Apprentices and trainees are employees for tax and

super purposes

gst 22 n Correctly reporting property transactions

superaNNuatioN 23–27 n Changes to the Self-managed superannuation fund annual return 2013

n Approved SMSF auditors – registration required from 1 July 2013

n Approved SMSF auditors professional-to-professional support service

n Lodging auditor contravention reports

n 2013 SMSF independent auditor’s reportn Changes to contribution reporting for rollovers from 1 July 2013n Helping your clients keep track of their supern Transferring super between Australia and New Zealandn Changes that affect your temporary-resident clients

claiming DASP

Your praCtiCe 28 n Are you using the right ELS gateway?n Law, rulings and policy

n Professional development opportunities

more iNformatioN aNd feedbaCk 30

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Lodgment program 2013–14 begins 1 July are you ready? PAGE 3

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Lodgment program 2013–14 begins 1 July – are you ready?The new lodgment year is almost upon us and we are looking forward to working with you.

This year the new lodgment program framework, starting on 1 July 2013, will result in some changes for you.

From 1 July 2013, as a registered tax agent you must:■n lodge your clients’ annual income tax and fringe benefits tax returns electronically in order to receive the concessional due dates available under the lodgment program

■n lodge 85% or more of your clients’ current year returns by the lodgment due date or, where a lodgment deferral is granted, the deferred due date.

If a return can’t be lodged electronically due to circumstances outside your control, it will be excluded from the electronic

lodgment requirement. Common circumstances include returns for clients who need to lodge an early tax return and for early December balancing substituted accounting period entities.

If you don’t meet the 85% on‑time lodgment requirement, we will contact you in the first instance to understand your individual circumstances and discuss options for improving your lodgment performance.

To help you prepare for these changes, we have provided tools such as the bulk client list deletion offer and lodgment performance summary emails. This past year has seen a marked improvement in lodgment performance across the tax profession – with more than 70% of all 2011–12 financial year returns already lodged by early May 2013.

Lodgment deferrals will continue to be available to assist you to manage short term obstacles that impact your ability to lodge by the due date. Deferrals should not be used as a way you manage your lodgment program. If we see patterns that indicate an inappropriate use of deferrals, we will contact you.

For more information, refer to Lodgment essentials.

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Half a million former clients now off the booksOver the years we have received feedback from you indicating that you wanted an easier way to remove former clients from your client list. In consultation with the Lodgment Working Group, we developed a bulk client list deletion offer which removed multiple clients from your client list.

The offer was made available twice over the last nine months and the take-up rate was high. Overall 7,000 requests were received and over 630,000 clients were removed. These former clients are no longer attached to a Registered Agent Number, and we will now start making direct contact with these clients.

Taking advantage of the offer helped place many of you in a better position to meet

the 85% on‑time lodgment requirement, which begins on 1 July 2013. Over this past year, we have seen a marked improvement in lodgment performance across the tax profession – with more than 70% of all 2011–12 financial year returns already lodged by early May 2013.

We were also pleased to hear very positive feedback when surveying agents who used the offer, with many saying they found the process easy to use and helpful in reducing their administrative burden.

Case study One agent had approximately 3,000 clients and an on-time performance of 72.1% for the 2010–11 year.

Their on-time measurement in January 2013 was 82.8% and, after removing 440 clients, their on-time performance had increased to 89.9% in April.

The agent said that the bulk deletion process was easy to use and saved them several hours, compared to the normal process.

For information about how to remove clients (now that the bulk client list deletion offer is closed), refer to Remove a client.

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progress of the Tax practitioner action plan 2011–2015 Working better with your profession

The Tax practitioner action plan 2011–2015 was introduced to provide the framework for the ATO and the tax profession to work well together and support each other in our important roles.

Since the introduction of the plan, significant progress has been made in strengthening our relationship.

We have established a comprehensive program of engagement to address issues we heard about from many of you.

We have made improvements to a number of our services, including the portal. We have also streamlined processes for complaint handling and for responses to technical queries via our professional-to-professional (P2P) service. Further, we have reshaped the relationship management program and agent induction programs to support tax agents and BAS agents.

Engagement and ongoing consultation with the profession are key to the ongoing improvement of these arrangements.

We are working with many of you to improve our consultation and co‑design in the development of compliance strategies. As part of this approach we will be consulting with our tax practitioner forums before the release of the Compliance program 2013–14.

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For a copy of the plan, refer to Tax practitioner action plan 2011–2015.

From 1 July 2012 to 31 March 2013:■n 1,076,094 calls were taken from tax practitioners

■n 207 tax practitioners received lodgment assistance when unable to meet their lodgment program

■n 1,795 tax agent and BAS agent induction calls were made

■n 134 enquiries were received through the expanded P2P service

■n 102 communication products were made available to tax practitioners.

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tax time 2013 publications available nowYou can access our 2013 publications online at Tax Time 2013. It includes: ■n downloadable instructions, guides, forms and schedules

■n details of 2013 tax time changes.

For more information, refer to Tax Time 2013 – publications online now.

New digital magazine for tax timeThis year we have introduced a new digital magazine called taxtime. 

Taxtime gives self preparers the information they need to do their tax, but you may also find it of value. It covers what’s new this year, includes a checklist, links to tools and an electronic version of the paper Individual tax return instructions.

Taxtime will be available through the Apple store and Google Play.

The full suite of instructions and related publications for the individual income

tax return will be available from one central point on our website at ato.gov.au/instructions2013

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Expansion of income testingFrom Tax Time 2013, many taxpayers will be subject to income testing because of changes to the private health insurance rebate, Medicare levy surcharge and net medical expenses tax offset.

Income tests differ, as some tests use ‘adjusted taxable income’, and others, such as the Medicare levy surcharge, use ‘income for surcharge purposes’. Varying components from the tax return are used to assess eligibility and entitlement against these income tests.

We are required to send adjusted taxable income to the Department of Human Services for relevant clients, as part of the administration of family assistance and child support.

In order for your clients to receive their correct entitlement, it is important that you complete the ‘income tests’ section of your client’s return. If your client has a spouse, you should also complete the ‘spouse details’ section.

We encourage you to consult with your clients to ensure they are aware of the changes and the importance of providing information to assist you to complete their tax return.

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These changes include: ■n Removal of the Income and Deductions summary sections – your feedback has told us that you do not rely on these summary sections because they were often incomplete and you preferred to refer to the detailed sections in the report.

■n Sections re-arranged – we have re-arranged sections of the report to align more closely with the way you told us you prepare your clients’ tax returns.

■n Taxable payments annual reporting – we will display taxable payments, made to individuals, reported to us by the building and construction industry.

■n Private health insurance policy details and Medicare levy surcharge– the private health insurance

rebate and the Medicare levy surcharge are now income‑tested

– we will display the more detailed information that health insurance providers are now required to report.

■n Taxable payments and Private health insurance policy details – these will be updated on business days only.

■n Employment termination payment summaries – three fields have been

amalgamated into the new Employment termination payment code, representing the type of payment made to the employee

– if you notice the Employment termination payment code is missing from the report, seek this information from the employer.

■n Government payments changes – the new Dad and partner pay will be available for pre‑filling.

■n ATO interest – in specific scenarios you may need to adjust the figures provided in the pre‑filling report to suit your clients’ circumstances (Calculating ATO interest provides more information on the specific scenarios where you may need to make an adjustment).

For information on how to print the report so that it displays the same as on the screen, refer to Printing the pre-filling report.

What’s new for pre‑filling in 2013?As a result of new government measures and tax agent consultation we have incorporated a range of enhancements into the Pre-filling report 2013.

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Correcting GST or fuel tax credit errorsFrom 10 May 2013, the conditions for corrections for GST errors or fuel tax credit errors made on earlier activity statement have changed. This relates to corrections that a business makes in a later activity statement.

Correction of credit errors Credit errors are no longer subject to value limits. How the credit error occurred is no longer relevant. The error must still be corrected within the relevant four-year time limit or period of review.

Correction of debit errorsDebit errors have more generous value and time limits. However a business cannot correct a debit error if the error is a result of recklessness or intentional disregard of a GST law or fuel tax law.

LimitsIf a debit error or the net sum of the debit errors exceeds the relevant debit error value limit, the business can correct the error up to the relevant limit.

More informationRefer to Correcting GST errors and for fuel tax, FTE 2013/1 Fuel Tax: Correcting Fuel Tax Errors Determination 2013 and the explanatory statement.

Fuel tax credit rate changes from 1 July 2013From 1 July 2013, fuel tax credit rates are changing. Your clients may be affected by:■n changes to some rates due to an increase in carbon charge amounts

■n increased rates for transport gaseous fuels, other than when used for travelling on public roads

■n rate changes for non-transport gaseous fuels used in certain activities

■n a possible rate change for liquid fuels used in heavy vehicles for travelling on public roads.

Fuel Tax Ruling FTR 2008/1 has been updated. You can claim a higher fuel tax credit rate for fuel you use to power auxiliary equipment of a heavy vehicle travelling on a public road. This fuel use is not reduced by the road user charge and is not affected by the carbon charge.

We have two online tools available:■n The Fuel tax credit eligibility tool helps you determine which of your client’s activities are eligible and what rates apply.

■n The Fuel tax credit calculator helps you work out how much your clients can claim.

These tools will be updated on 1 July 2013 to include the recent changes.

For more information about these changes:■n refer to Fuel tax credits – changes from 1 July 2013■n phone us on 13 72 86 Fast Key Code 1 1 4 between 8.00am and 6.00pm, Monday to Friday.

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Superannuation changes for employersA series of superannuation reforms are progressively being introduced from 1 July 2013, changing your employer clients’ super obligations.

As a trusted source of information for Australian business, your clients may come to you for super guarantee advice.

Your employer clients will need to be aware that their super obligations are changing and soon they will have to:■n increase the amount of super paid to their employees, with the first super guarantee rate increase from 9% to 9.25% on 1 July 2013, and gradually reaching 12% by 1 July 2019

■n make super payments for eligible employees 70 years or over from 1 July 2013, due to removal of the super guarantee upper age limit

■n use a default super fund that offers a MySuper product from 1 January 2014

■n follow the data and e-commerce standard when making super contributions on behalf of their employees (from 1 July 2014 for employers with 20 or more employees and from 1 July 2015 for employers with 19 or fewer employees).

For more information about super reforms, refer to Introducing your super.

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Voluntary entry into PAYG instalmentsIn our December edition, we told you that new businesses and some individuals can now enter the pay as you go (PAYG) instalments system on a voluntary basis. Some of your clients who may benefit from choosing to pay PAYG instalments include:■n individuals who are normally excluded from PAYG instalments but are entitled to the seniors and pensioners tax offset (SAPTO)

■n businesses that want to pay instalments towards their expected income tax liability

■n companies that would like to access franking credits to pay franked dividends to their shareholders but who do not meet the administrative entry rules.

For more information, refer to Voluntary entry.

Work is currently underway to improve the data available in the Australian Business Register (ABR).

Later this year you will notice changes to the Australian business number registration process. Changes will include additional fields to capture:■n multiple business locations, for example, branch or offices, shop fronts or warehouses

■n a broader range of associates.

This work will enable all levels of government to better provide and guide service delivery, planning and management of infrastructure and disaster recovery to the Australian community.

Remember, you can help your clients by ensuring their details are up to date in the ABR.

For more information on keeping your details up to date, visit abr.gov.au

Changes to ABN registration

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new test case registerThe test case litigation program has published a new test case litigation register that is now available on our online legal database. The register provides information about cases considered and approved for test case funding, and the issues we are testing and why. The register will be updated on a quarterly basis.

The program aims to clarify the operation of laws administered by us where there is uncertainty or contention. We provide test case funding to your client when a case involves a genuine question of uncertainty or contention and may have implications beyond the individual case to a broader section of the public.

Although we make the final decision on test case applications, we are guided by the recommendations of the test case litigation panel, which consists of accounting and legal professionals and senior tax officers. Each application is carefully considered against the funding criteria.

The test case litigation guide also has been updated and explains how to apply for funding if you think a client’s case meets the criteria.

We recognise that most people in the community pay their tax and superannuation on time. Of those who occasionally miss a due date, most ensure they pay any outstanding amounts as quickly as possible.

Where a taxpayer does not take prompt action to address their tax or superannuation debt, we have a responsibility to recover that debt in a way that is fair to the majority of taxpayers who do the right thing. This helps ensure a level playing field for everyone.

The debt recovery process generally begins with the ATO contacting you or your client, by letter or by phone, seeking payment of the debt. If the debt is not addressed at this stage, it may be referred to an external collection agency.

It is only when your client does not take steps to address their debt that we commence firmer action. This could include issuing a garnishee notice to your client’s bank or employer.

If your client still does not take action, we may initiate legal proceedings to collect the amount owing, through the courts.

If you have a client who has trouble paying on time, contact us early. Addressing debts when they arise makes them easier to manage.

For more information:■n phone us on 13 28 69 between 8.00am and 5.00pm, Monday to Friday, and ask for the test case litigation program■n email strategiclitigationunit@ato.gov.au

our approach to debt collection

For more information on our approach to debt collection, refer to Managing your tax debt essentials.

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LODGMenT

Making reporting simplerTax Time 2013 is fast approaching and this year we have made several improvements to our tax returns and schedules to make it easier for your clients to comply with their reporting obligations.

These improvements are part of our ongoing efforts to reduce the amount of information required to be reported to us. We have developed these improvements in consultation with tax practitioners and the business community.

We have:■n removed 31 unnecessary labels across the company, partnership and trust returns

■n moved 10 labels from the main returns to the international dealings schedule so they only need to be considered by those involved in international dealings

■n cancelled the capital allowances and personal services income schedules and included a smaller number of labels about these topics on the company, partnership and trust returns

■n shortened the length of the capital gains tax schedule and replaced some current labels with others that will help us to improve our verification processes

■n changed the fund, self managed fund and individuals returns to align with these changes and ensure consistency across the form types.

These improvements will benefit businesses, super funds and individuals and will apply for the 2012–13 tax returns onwards.

For more information, refer to Tax Time 2013.

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Private health insurance – changes to tax return for individuals From the 2012–13 financial year, the private health insurance rebate is being income tested against three income tier thresholds.

This means if your clients have private health insurance, the amount of private health insurance rebate they are entitled to receive is reduced if their income was over the threshold income amounts.

Those clients who have continued to receive reduced premiums from their insurer may end up receiving a tax liability.

■n We have made changes to the private health insurance section in the tax return to allow us to determine the amount of rebate your clients are entitled to receive. Taxpayers will need their annual tax statement from their insurer to complete this question.

■n The image below shows the new layout for this question. The changes include new labels J, K and L. All labels with a letter indicator will be on the annual tax statement from the private health insurers.

Other changes include:■n Each adult covered by the policy is income tested on their share of the cost of the policy, regardless of who pays for the insurance policy.

■n Each adult will receive their own statement from their insurer, which will be needed to complete the income tax return.

For more information about how to complete the private health insurance policy details labels, refer to the relevant tax return instructions at Tax Time 2013.

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Small business simplified depreciation – form changesFrom the 2012–13 financial year, changes have been made to the simplified depreciation rules:■n The small business instant asset write-off threshold has increased from $1,000 to $6,500.

■n Small businesses can claim an accelerated initial deduction for motor vehicles acquired in 2012–13 and subsequent years.

■n The long-life small business pool and the general small business pool have been consolidated into a single pool to be written off at one rate.

As a result of these changes the small business entity simplified depreciation question in the company, trust and partnership tax returns and the business and professional items schedule for individuals has been updated.

The image below shows the new layout for this question. The changes include adjustments to labels A and B and also the removal of the long‑life pool label.

LODGMenT

For more information about how to complete the small business simplified depreciation labels, refer to the relevant tax return instructions at Tax Time 2013.

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LODGMenT

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PAYG withholding payment summary annual reports for employers (and super funds) are due soon:

Description Lodgment end date

Reports for:n■ ■employers who prepare the

report without a tax agent n■ ■all large withholders – that is,

those who withhold more than $1 million annually.

14 August 2013

Reports for employers who use a tax agent to prepare their report and either of the following apply:n■ ■they have one or more arms

length payees n■ ■they have only closely held

payees but did not meet the compliance test (see further information about compliance test below).

30 September 2013

Reports for employers who use a tax agent to prepare their report and who:n■ have only closely held payees n■ met the compliance test.

Payer’s income tax return due date

To meet the compliance test, the payer must have lodged both of the following, if required:■n PAYG withholding payment summary annual report 2012 ■n 2012 income tax return with no penalty applied for not lodging on time.

Closely held lodgment concession

We will soon send you a letter or an email telling you which of your clients will receive the closely held lodgment concession.

These clients have until the due date of their income tax return to lodge their PAYG withholding payment summary annual report.

If you do not receive an email or a letter by 1 August 2013, or have more clients eligible for the concession, you need to tell us by 16 September 2013.

Lodgment dates for paYg withholding reports

More information about this lodgment concession will be available from 1 July 2013, refer to Lodgment essentials.

PAYG withholding annual reports are due soonLodging early makes completing tax returns easier We recently sent reminder letters to all clients with PAYG withholding reporting obligations.

The letters also provided important information about tax tables that apply from 1 July 2013.

To ensure your clients correctly meet their obligations, they must: ■n provide each employee with a payment summary no later than 14 July 2013

■n lodge a payment summary annual report by the due date.

Payment summaries need to be provided to all employees even if the employer did not withhold any tax.

We encourage employers to lodge their payment summary annual reports as soon as they provide payment summaries to their employees. Lodging payment summary annual reports early maximises the number of payment summaries available in your pre‑filling reports, which you can use in tax return preparation.

You and your clients can now use the file transfer function in the portal to lodge payment summary annual reports. You can continue to use Standard Business Reporting (SBR) or our Electronic Commerce Interface (ECI) to lodge these and a range of other reports and forms online.

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LODGMenT

For more information, refer to:■n Tax tables ■n File transfer■n Online services■n Lodging early helps your employees (NAT 73420)■n Pay as you go (PAYG) withholding – home.

LODGMenT

With Tax Time 2013 just days away, it’s timely to remind your clients to bring their bank account information with them when they make an appointment. Your feedback tells us that EFT refunds are a better way to get your clients’ refunds quickly and can save you time.

What you need to know:■n From 1 July your clients’ individual income tax returns, with an expected refund, will need to include their bank account information in order to be lodged through ELS.

■n If you operate a trust account, you can input the details to have refunds sent straight to you. Then use the EFT reconciliation statement to keep track of deposits.

■n If you don’t operate trust accounts, we understand there may be some limited circumstances where your clients are unable to provide Australian bank account information. We’re committed to working with you in these situations. Phone us on 13 72 86 (FKC 1312) and we’ll help you to lodge on their behalf.

Remember, if your clients have debts, they can pay quickly and easily, online or over the phone, with BPAY and credit card.

ensure you have your clients’ bank account details

Under the Lodgment program 2012–13, most self-managed superannuation funds (SMSFs) should have lodged their 2012 SMSF annual return by now. If you have SMSF clients who have overdue lodgments, you should encourage them to lodge immediately.

All SMSFs must lodge a return for each year the fund is in operation, including the year the fund is wound up. A nil return cannot be lodged unless the fund is lodging its final return.

Most SMSFs do the right thing and lodge on time, but those SMSFs that fail to lodge are a key focus of our current lodgment compliance work.

Newly registered SMSFs may request a return not necessary (RNN) for their first year of registration, provided they meet all the following eligibility conditions.

The SMSF must confirm:■n that although registered, it had no assets and did not receive contributions or rollovers during the 2011–12 financial year

■n the date they first held assets and commenced operating

■n that they will be lodging future returns.

To request an RNN, you must provide the above details in writing and email us at lodgmentconcernsforSMSFs @ato.gov.au

SMSFs must lodge returns

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For more information, refer to Key lodgment dates for super funds.

This is only available for the first year of registration.

The Lodgment of income tax return not necessary form cannot be used for super funds. This form should only be used for non‑super fund clients.

For more information, refer to How to pay.

Extended petroleum resource rent tax – what it means for your clients If you have clients with an interest in the North West Shelf project, or an onshore petroleum project that is in commercial production, they will be affected by the extended petroleum resource rent tax (PRRT). These taxpayers will enter the standard lodgment and payment system for instalments in the 2013–14 financial year and will need to prepare and lodge separate annual returns for each petroleum project interest.

You may want to consider registering your clients with us so their details are correctly recorded and they can receive their PRRT

payment reference number. Registered taxpayers will also receive up-to-date information. To register, download the Application to register for petroleum resource rent tax.

Taxpayers affected by the extended PRRT will need to lodge an annual return for the 2012–13 financial year, even where their taxable profit is nil. The due date for lodgment of an annual return is on or before 29 August 2013, or within a period allowed by the Commissioner.

For more information, refer to Lodging, reporting and paying.

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Selling or closing business checklistIt is important all of your client’s tax issues are finalised before they cease business. This allows us to finalise their account and refund any amounts owing to them.

We have a checklist of common administrative and technical tax issues to consider when your client closes or sells a business, including:■n lodgment obligations■n record keeping■n cancelling registrations.

For more information, refer to Selling or closing your business – things to consider.

LODGMenT

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A reminder for trustees to make their resolutions by 30 June If you have clients who are trustees and they make beneficiaries entitled to trust income by way of a resolution, they must do so by the end of the financial year (30 June), or earlier if required by the trust deed. This resolution will be relevant to determine who is to be assessed on the trust’s taxable income for the 2012–13 financial year.

We encourage you to remind your trustee clients that, if they make their resolutions after the end of the financial year:■n the resolution will not make the beneficiaries presently entitled to the trust income for tax purposes

■n the trustee may be assessed on the taxable income of the trust at the highest marginal rate plus the Medicare levy.

COMPLIAnCe

For more information, refer to Trustee resolutions must be made no later than 30 June.

COMPLIAnCe

Anti‑tax avoidance campaign for 2013You may have noticed our anti-tax avoidance campaign recently, featuring the tag line: ‘Investments aren’t always as they seem’. This year’s campaign reinforces the importance of fully understanding a tax-effective arrangement before committing to it, as well as the need to get independent advice.

To avoid being involved in a tax avoidance scheme, your clients can:■n read our guide Investigating tax-effective arrangements, which expands on common features of tax avoidance arrangements and how to recognise, reject and report them

■n watch the Paul Clitheroe video Recognising tax avoidance schemes.

This year’s campaign is predominantly online, with advertisements appearing on news and finance websites, as well as in Google search results.

You also have an important role to play in preventing the spread of tax avoidance schemes, as outlined in our Compliance update article Tax advisers: your referrals quash tax avoidance schemes. By reporting schemes to us you are helping to protect taxpayers and level the playing field for tax practitioners.

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If you see something that looks like a scheme, let us know by:■n phoning our confidential Tax Planning Schemes hotline on 1800 177 006 between 8.30am and 5.00pm, Monday to Friday ■n emailing us on reportataxscheme@ato.gov.au

COMPLIAnCe

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Risk reportsWe issued approximately 400 risk reports in late April as part of a trial approach to engage small-to-medium businesses. Businesses were selected from those categorised as key taxpayers in our risk differentiation framework.

The risk report is our view of tax risk of the business and not an indication of non compliance. The report advised the taxpayer of their risk category and outlined risk focus areas or potential issues.

You and your clients did not have to take any specific action

as a result of receiving the risk report. However, those clients who received the risk report were encouraged to review their income tax affairs and, if appropriate, make a voluntary disclosure. These risk reports were sent to the postal address recorded on our system.

We are evaluating this trial mailout of risk reports to gauge the taxpayer and tax intermediary reaction, influence on compliance behaviour and impact on our administrative processes.

The importance of reviewing your client’s consolidation claims If any of your clients are consolidated groups you need to review their rights to future income (RTFI) and residual tax cost setting claims (RTCS), as a result of 2012 law changes that have retrospective application.

We are undertaking compliance assurance within the specially extended legislative amendment period, which ends on 29 June 2014.

We encourage you to consult with your clients to ensure that they are aware of the law changes and the importance of: ■n reviewing any RTFI and RTCS related claims they may have made

■n completing an amendment request if those RTFI or RTCS related claims made on their tax return, or on an amendment request, are no longer allowable.

For more information:■n about how to review your client’s claims, refer to Rights to future income and residual tax cost setting claims ■n about the law changes, refer to Consolidation: Changes to the residual tax cost setting and rights to future income rules ■n for general enquiries, email us at ConsolidationIntelligence@ato.gov.au

abN entitlement checks continueThrough the Towards a Better Business Future initiative, work continues to improve the accuracy and integrity of information on the Australian Business Register (ABR) by scrutinising Australian business number (ABN) entitlement.

In our December edition, we advised that over 93,000 ABNs were cancelled by the Registrar during the 2011–12 financial year. This number has now grown to over 210,000 ABNs cancelled by the Registrar.

If your client’s ABN is cancelled, they will receive a letter providing the reason and review rights. If they do not agree with the cancellation, they can object and their ABN can be reinstated if they can show they are entitled to have an ABN.

You can help us improve the ABR by applying to cancel a client’s ABN if they are not required to hold one or have stopped operating a business.

Remember that cancelling a client’s ABN will also cancel their AUSkey and registration for GST, luxury car tax, wine equalisation tax and fuel tax credits.

In addition to improving accuracy and integrity work, the Registrar will also be contacting ABN holders to remind them of the legal requirement to update their ABN registration details on the ABR within 28 days of becoming aware of any change.

COMPLIAnCe

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Inform your business clients that if they engage an apprentice or trainee, they will need to treat them as an employee for tax and super purposes. This means meeting the required pay as you go (PAYG) withholding, superannuation and fringe benefits tax obligations.

An apprentice or trainee cannot be engaged as a contractor as they are not running their own business. They are in training and are required to work under the direction, control and supervision of their employer to earn their qualification, certificate or diploma. They are covered under

an award and receive specific pay and conditions.

Apprentices and trainees are not entitled to an ABN for the work they do as an employee, as part of their apprenticeship or traineeship.

If an apprentice or trainee already has an ABN, it does not make them a contractor in relation to their apprenticeship or traineeship.

For more information, refer to Employee or contractor.

Apprentices and trainees are employees for tax and super purposes

22 the TAXAGENT June 2013

GST

Correctly reporting property transactionsIt is the time of the year to check your clients’ property transactions and identify if they have:■n purchased or sold any property in the last 12 months

■n developed properties for resale, but retained them for rental or other purposes.

If either of these points apply, your clients may need to declare an adjustment on their business activity statement in June 2013 to ensure they meet their tax obligations.

We have a number of education products available to help your clients understand how to meet their property tax obligations and entitlements.

For more information, refer to:■n Property ■n GST and property adjustments.

23 the TAXAGENT June 2013

SuPeRAnnuATIOn

Changes to the self‑managed superannuation fund annual return 2013Changes apply to the Self-managed superannuation fund annual return 2013. These include:■n Section A, item 10 exempt current pension income requires trustees to answer whether the fund paid an income stream to any of its members in the income year and if so, to list the exempt current pension income amount and the method used to calculate it.

■n Section C, has been renamed Deductions and non-deductible expenses and includes additional labels.

■n Section D, label L shows the increased supervisory levy and new adjustment label M for use by wound‑up funds.

■n Section F now requires a trustee to only report current members.

■n Section G now requires a trustee to include former members and allows them to list up to four members.

■n Section H, new item 15b Australian direct investments now requires trustees to specify the amounts of their limited recourse borrowing arrangements in the required fields.

■n Section H, new item 15d in-house assets requires trustees to answer whether the fund held a loan to, lease to or investment in, related parties at the end of the year, as well as the value of the assets.

■n Section J, regulatory information, has been removed from the SAR, streamlining self-managed superannuation fund (SMSF) reporting. ASIC registration of SMSF auditors will allow more reliance on ACR reporting, removing the need for these regulatory questions.

If you would like more information about this service, email us at Super P2P Enquiries.

From 1 July 2013, SMSF trustees will be required to appoint an approved SMSF auditor who is registered with the Australian Securities & Investments Commission (ASIC) to conduct any SMSF audits.

Auditors can apply for registration and pay fees online with ASIC at asic.gov.au

To be registered as an approved SMSF auditor, applicants will generally need to meet set registration requirements.

Transitional concessions may be available to existing approved auditors who lodge their registration application with ASIC by 30 June 2013. No concessions will be available to an existing approved auditor who applies on or after 1 July 2013.

Once an approved SMSF auditor has been registered with ASIC, they will be issued with an SMSF auditor number (SAN). SMSF auditors should provide that

number on the Self-managed superannuation fund independent auditor’s report (NAT 11466) they give to SMSF clients.

The SAN detail will be a mandatory label on the Self-managed superannuation fund annual return (SAR) from the 2013 income year. The SAR cannot be processed without the inclusion of a valid SAN.

The SMSF auditors professional-to-professional support service is being extended to the 300 largest auditors from July 2013, which will cover about 40% of the SMSF population. The service is a free, personalised and tailored service providing technical assistance to high-volume professional SMSF auditors.

SMSF auditors who have accepted our invitation to use the service can request general technical advice on the Superannuation (Industry) Supervision Act 1993 regulatory requirements of SMSF trustees.

The service will provide auditors with direct access to our senior technical people, who will respond to queries about technical issues identified during SMSF audits. They will provide guidance on SMSF regulatory issues to assist in gaining a better understanding of SMSF legislative requirements. They will also provide support to resolve any SMSF administrative issues if other channels do not exist.

Auditors can expect to receive a phone call from a subject matter expert within two working days to discuss the query, provide general advice and to negotiate a response date where required.

Approved SMSF auditors professional‑to‑professional support service

Approved SMSF auditors – registration required from 1 July 2013

SuPeRAnnuATIOn

24 the TAXAGENT June 2013

For more information on the registration requirement and process, visit ASIC’s website asic.gov.au/smsf‑auditor

Superannuation

25 the TAXAGENT June 2013

Lodging auditor contravention reportsTo lodge auditor contravention reports (ACR) online, approved SMSF auditors should download and use the electronic Superannuation Audit Tool (eSAT) or access the Business Portal, you can no longer lodge ACR’s via the Tax Agent Portal.

Version 6 (2013) of eSAT will be released in June. We will advise existing eSAT users when the update is available

via an eSAT bulletin. We have updated reference material and enabled the 2013 period to allow for ACR lodgment.

The ACR for 2013 includes a new reportable contravention: R4.09A – separation of assets. This is an offence punishable by a fine of up to $11,000. A breach of this standard may also be considered when deciding whether to make an SMSF non-complying.

The revised Self-managed superannuation fund (SMSF) independent auditor’s report will be available from 1 July 2013.

Changes to this report include the addition of the SMSF auditor number (SAN) for approved SMSF auditors and expanded audit scope for part B of the report to include the following regulations: ■n R4.09A – SMSF assets must be held separately from any assets held by the trustee personally.

■n R8.02B – Fund’s assets must be valued at their market value when preparing accounts and statements.

The audit report now also states that the auditor has complied with the auditor independence requirements prescribed by the Superannuation Industry (Supervision) Regulations 1994 (SISR) and the competency standards set by ASIC.

2013 smsf independent auditor’s report

If your clients think they might have lost super or want to keep track of their current super accounts, they can now do this through our enhanced online services. To ensure the security of their information, they will need to register for these services through a secure login process.

By registering online they will be able to:■n check their current super accounts that money has been paid into in the last two years

■n find lost super – there are billions in lost super dollars and some of it could be theirs

■n find ATO‑held super – if the government, their super fund or their employer can’t find a fund to transfer their super to, we hold it on their behalf

■n transfer their super into their preferred super fund.

Later this year, your clients will be able to see all their super accounts online, including pension accounts

and accounts that have not received contributions for years. Inform your clients about how to access these services and how it can help them to manage their super.

Helping your clients keep track of their super

For more information:■n refer to SuperSeeker■n watch our videos for help with registration.

From 1 July 2013, the rollover benefits statement (RBS) is changing. From this date a new form must be used for all rollovers unless all the same information is being provided under the rollover data and e-commerce standard.

The new RBS has no current year contributions

information. These changes also affect contributions reported in the 2014 SMSF annual return (SAR) or the member contributions statement (MCS).

From 1 July 2013, all contributions received by a super fund during a financial year must be reported to us by

that fund, not by another fund when the contributions are transferred in a rollover. The SAR or MCS will only report contributions received directly by the super fund.

Changes to contribution reporting for rollovers from 1 July 2013

SuPeRAnnuATIOn

26 the TAXAGENT June 2013

SuPeRAnnuATIOn

26 the TAXAGENT June 2013

The new RBS and instructions are now available.

In the past, people migrating between Australia and New Zealand have not been able to either access their super benefits when they migrate (before preservation age) or transfer their super savings to a super fund in their new permanent home.

From 1 July 2013, the Trans-Tasman retirement savings portability scheme will offer people, permanently migrating between Australia and New Zealand, the opportunity to transfer super savings between Australian super funds and New Zealand ‘KiwiSaver’ schemes.

Transfer of retirement savings through the Trans-Tasman retirement savings portability scheme is voluntary for members.

It is also voluntary for funds to participate in the scheme.

Self-managed super funds cannot receive money from New Zealand under this scheme.

Super transferred into Australian super accounts through this scheme will count toward the person’s non-concessional super cap when it is first allocated to their Australian super account.

Transferring super between Australia and New Zealand

For more information about:■n the super contribution caps, refer to Super contributions – too much super can mean extra tax■n transferring super between Australia and New Zealand, refer to Trans‑Tasman retirement savings portability.

SuPeRAnnuATIOn

27 the TAXAGENT June 2013

In December 2012, Australian Customs ceased automatically providing passport stamps when people depart Australia. This change affects temporary residents (or their authorised representatives) who claim departing Australia superannuation payments (DASP) from funds using paper claim forms.

If a temporary‑resident member’s withdrawal benefit is less than $5,000, the fund trustee must receive:■n a visa (or other evidence) showing the member was a temporary resident but their visa has ceased to be in effect, and

■n the member’s passport containing a departure stamp, or a Certification of Immigration Status (form 1194) issued by the Department of Immigration and Citizenship (DIAC) as evidence of departure from Australia.

Temporary residents claiming benefits of $5,000 or more cannot provide a passport stamp as evidence of departure, they must provide the fund with a Certification of Immigration Status (form 1194).

DIAC charge a fee for supplying this form.

Temporary residents can also claim via DASP online. This is a free service that we provide – which includes online verification of their immigration status with DIAC.

If your temporary‑resident clients intend claiming DASP using a paper application, you should encourage them to request a departure stamp when leaving Australia.

Changes that affect your temporary‑resident clients claiming dasp

To find out more about DASP online, refer to:■n Accessing the DASP online application system for intermediaries■n Temporary residents’ online application.

YOuR PRACTICe

28 the TAXAGENT June 2013

Are you using the right ELS gateway?A better way of using the electronic lodgment service (ELS) is to ensure you use your primary gateway whenever possible, as it means you will receive your:■n clients’ activity statements – if you have requested to receive them electronically instead of by paper

■n business system reports – the reports you have requested to receive automatically.

You can find your primary gateway by checking your ELS registration approval letter, which you can check against your software. As each software package is different, you will need to refer to the user manual for the software package you use.

For more information, refer to:■n ELS gateways■n Receiving your clients’ activity statements■n ELS reports.

Your practice

29 the TAXAGENT June 2013

Professional development opportunities

The following websites contain details of professional development sessions offered by accounting and tax professional associations.

Law, rulings and policy To access a summary of recently-issued rulings, determinations, practice statements and taxpayer alerts, or details of rulings and practice statements under development, refer to:■n Public Rulings Program

■n Law Administration Practice Statements Program

■n Taxpayer Alerts.

You may like to save these as ‘Favorites’ in your web browser for easy access to this information.

Association of Tax and Management Accountants (ATMA)

atma.com.au

Chartered Institute of Management Accountants (CIMA)

cimaglobal.com/australia

CPA Australia cpaaustralia.com.au

Institute of Public Accountants (IPA) publicaccountants.org.au

National Tax and Accountants Association (NTAA)

ntaa.com.au

Taxpayers Australia taxpayer.com.au/seminars

The Institute of Chartered Accountants in Australia (the Institute)

charteredaccountants.com.au

The Tax Institute taxinstitute.com.au

Institute of Certified Bookkeepers icb.org.au

Association of Accounting Technicians Australia

aat.org.au

30 the TAXAGENT June 2013

More information and feedbackTo find out the latest news and changes that affect your practice, visit the Tax Professionals home page on our website.

eLink is an email bulletin that issues to over 26,500 subscribers weekly. It helps users of our website, especially tax professionals, stay informed of updates to the site.

For more information and to subscribe, refer to eLink – an email bulletin for tax professionals.

OUR COMMITMENT TO YOUWe are committed to providing you with accurate, consistent and clear information.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us.

This publication was current at June 2013.

© AUsTRAlIAN TAXATION Office fOr the cOmmOnwealth Of australia, 2013You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

published byAustralian Taxation Office Canberra June 2013 ISSN1326-5679 JS 27611