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Finding your lost super now that Superseeker decommissioned

The ATO has decommissioned the SuperSeeker online service for individuals.

The system was due to be decommissioned April 2017. However, due to recent system outages which began in December 2016, the ATO has decided not to revive this system.

Individuals can manage their super using ATO online services through myGov.

Who can have lost super?

Your super fund will report you as a lost member if either:

  • they have not been able to contact you
  • they have not received any contributions or rollover amounts for you in the last five years
  • your account was transferred from another fund as a lost member account and no new address has been found.

The ATO maintains a register of reported lost members but the super fund still holds your monies.

Who can have unclaimed super?

Super funds are required to report and pay unclaimed super money to us twice a year. The following are the unclaimed monies that we may hold on your behalf:

  • unclaimed super money for
    • a member 65 years old or older
    • a non-member spouse
    • a deceased member.
  • unclaimed super money of former temporary residents
  • certain accounts belonging to lost members
    • lost accounts with balances of less than $6,000 (small lost member accounts)
    • lost accounts which have been inactive for a period of five years and have insufficient records to ever identify the owner of the account (insoluble lost member accounts).

 

More information at ATO Website – Lost Super page

Commissioner’s statement on ATO systems

The Commissioner has said that claims made in media that Tax Time 2017 is under threat due to the ATO’s recent system outages were “completely without foundation”. He said that the ATO is “absolutely confident that taxpayers will be able to lodge their returns and receive refunds on time from 1 July”.

According to the Commissioner, initial indications are that there has been a failure by Hewlett Packard Enterprise (HPE) to provide contracted services in a reliable way and ensure stability of the ATO systems. The cause of the failures will be informed by the review led by PwC that the ATO commissioned after the first outage in December 2016. The ATO technicians are working with HPE’s global team of experts to fully replace the affected hardware.

Source: ATO website, 8 February 2017.

Working Holiday makers

The Australian Governement has recently changed the way that Working Holiday makers are taxed.

From 1 January 2017 – as a working holiday maker – the first $37,000 of your income is taxed at 15%, with the balance taxed at ordinary rates.

You are a working holiday maker if you have a visa subclass:

  • 417 (Working Holiday), or
  • 462 (Work and Holiday).

As a working holiday maker your employer also has to pay super for you if you are eligible. When you leave Australia you can apply to have your super paid to you as a Departing Australia Superannuation Payment (DASP). The tax on any DASP made to working holiday makers on or after 1 July 2017 is 65%.

Most people who come to Australia for a working holiday or to visit will remain foreign residents for tax purposes. This includes people on visa subclass 417 (Working Holiday) or 462 (Work and Holiday) (backpackers).

EMPLOYERS ARE REQUIRED TO REGISTER

Only employers of working holiday makers are required to register with the ATO as employers of working holiday makers. Working holiday makers do not register.

If your employer is registered with the ATO they will withhold tax from your pay at 15% on the first $37,000 of income.

Example 1

Gorge is on a 417 Working Holiday visa and has started work for Paul’s pickles. As Paul is a registered employer of working holiday makers, 15% tax will be withheld from Gorge’s pay.

Gorge earned $500 in the first week and had $75 tax withheld.

If your employer is not registered with the ATO as an employer of working holiday makers they must withhold tax from your pay using foreign resident tax rates. Foreign resident tax rates start at 32.5%.

Example 2

Aleks is on a 417 Working Holiday visa and started working for Pamela’s berries. As Pamela is not registered as an employer of working holiday makers, Pamela will withhold tax at the foreign resident tax rates starting at 32.5%

Aleks earned $500 in the first week and had $162.50 tax withheld.

 

Impact on the tax free threshold

Most working holiday makers will be foreign resident taxpayers and not be eligible for the tax free threshold.

If you are a resident, you will be eligible for the tax free threshold but it will be impacted by any working holiday maker income you earn. Any working holiday maker income is dealt with first and effectively reduces your tax free threshold.

Departing Australia Superannuation Payments (DASP)

Employers are required to make super contributions on behalf of their eligible employees to fund retirement.

If you worked and earned super as a working holiday maker, your super will be taxed at 65% when it is paid to you. This DASP tax rate for working holiday makers is effective from 1 July 2017.

You can apply for the DASP after you left Australia and met all eligibility.

 

Federal Court rules that Uber is a taxi Service – ATO reaction

The Federal Court  in the case Uber BV v FCT 2017 – 2017 ATC 20-608 stated that the ride sharing services offered by an Uber driver constituted a supply of “taxi travel” under the GST Act.

This confirms that ATO’s previously held view, and the ATO will contrinue to administer the law according to its previously published advice until there is a different decision.

Clients are operating a ride-sourcing enterprise are reminded that they will have to:

  • keep records,
  • have an Australian Business Number (ABN),
  • register for GST regardless of how much they earn,
  • pay GST on the full fare received from passengers for each trip they provide,
  • lodge activity statements and
  • include income from ride-sourcing in their income tax returns.

Drivers are also entitled to claim income tax deductions and GST credits for GST paid on expenses apportioned to the ride-sourcing services they have supplied.

Taxpayers are reminded that the ATO using data matching, and where it matches people who provide ride-sourcing through data matching, it will continue to write to them to explain their tax obligations.

 

 

Spouse Super offset changes

The ATO is reminding taxpayers that the Spouse Superannuation tax offset is changing from 1 July 2017.

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Present rates for a rebate of up to $ 540 or 18% of the contribution ONLY allow where the spouses income, including reportable fringe benefits and reportable superannuation contributions in less than $13,800.

After 1 July 2017, the 13,800 spouse income limit will rise to $40,000. The maximum rebate will remain unchanged at $540.

However, the income limit increase will mean that more people can contribute to their spouse’s superannuation and benefit from a rebate. The rebate will also apply to all couples, whether married or defacto.

Òther limits to the application of the rebate include:

  • where the spouse has exceeded their non-concessional contributions cap for the relevant year
  • where the spouse has a super balance equal or greater than the general transfer cap at the start of the relevant year

Recent ATO crackdown on SMSF trustees and non-compliance

The ATO has cracked down on SMSF trustees who have breached the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act). The recent crackdown is the result of a number of SMSF trustees prematurely accessing their superannuation funds. Non-compliance with the SIS Act can have serious consequences for SMSF trustees. Outcomes include fines imposed by the Federal Court and, potentially, the SMSF being wound up.

In Deputy Commissioner of Taxation (Superannuation) v Ryan [2015] FCA 1037 the Federal Court fined 2 individual SMSF trustees $20,000 each for loans to SMSF members and other withdrawals from their SMSF in contravention of the SIS Act.

SMSF trustees should be mindful of the options available to the ATO to act against trustees who breach the SIS Act and the importance of ensuring their SMSF is a compliant fund.

Read full Story here

ATO to be investigated over fairness to SMEs

The Australian Taxation Office’s behaviour towards small businesses and independent contractors will come under the spotlight thanks to a review launched by the Inspector General of Taxation.
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The review is will investigate whether SMEs are being unfairly targeted by the tax office and whether the ATO is effectively tackling phoenix activity.

Inspector General of Taxation, Ali Noroozi, told Fairfax there are concerns about how the ATO deals with small businesses trying to meet their tax obligations.

“Employers play a vital role in the economy, including collecting taxes from their employees and paying their entitlements,” Noroozi said.

“It is important to provide them with as much support as possible with these obligations so that their main focus continues to be on their core commercial goals.”

First reported on Smart Company 29 October 2015

ATO pushing ahead with plans to introduce real-time payroll reporting

Originally reported on Smart Company 14 October 2015

The Australian Tax Office is pushing ahead with its plans to introduce mandatory real-time payroll reporting for businesses, with ATO second commissioner Geoff Leeper saying yesterday there are “profound economic benefits” from the proposed system.

Fortnightly payroll reporting is one aspect of the federal government’s proposed Single Touch Payroll Scheme, which had previously been slated for commencement in July 2016.

Under the scheme, electronic accounting software used by businesses would automatically report payroll information to the ATO when employees are paid, eliminating the need for employers to report employee-related Pay-As-You-Go Withholding (PAYG) in activity statements throughout the year or employee payment summaries at the end of the year.

The proposed Single Touch Payroll Scheme had also included a requirement for businesses to make mandatory real-time payments, however, former Small Business Minister Bruce Billson said in June the government would not proceed with that aspect of the scheme and would instead consult further with industry.

Leeper confirmed this at a Smithink accountants’ technology conference in Sydney on Tuesday.

“The [industry] consultation was very clear – for heaven’s sake be careful on cash flow – and we get that message,” Leeper said, according to Fairfax.

Leeper said the ATO is still working towards implementing real-time payroll reporting, which he said is “worth doing in its own right” as a way of matching data between government departments.

“Single-touch payroll automates the exchange of information from an employer through us to the Department of Human Services,” Leeper said. “No more unemployment form. No more income reporting.”

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany this morning the small business community is “very comfortable” with the prospect of real-time payroll reporting but only “as long as the software is ready” for business to use.

Strong says there is still plenty of work to do to get to that point.

Alex Malley, chief executive of CPA Australia, told SmartCompany this morning the changes to the scheme announced by Billson in June, including potentially undertaking pilots of the scheme from July 2016, was “sensible” and struck “the right balance between reducing red tape for businesses and the meeting the government’s objective”.

“We were supportive of dropping mandatory real-time payment because of cash flow concerns and we’re supportive of moving ahead with real-time reporting of employment obligations including PAYG withholding tax obligations,” Malley says.

“There are clear benefits here because automatic reporting of many employment obligations will reduce the compliance burden currently faced by employers.”

Malley says CPA Australia will continue to monitor the roll-out of the scheme “with a close eye on the availability of appropriate software and how businesses adjust their pay cycles to manage the new processes”.

“Innovation in the tax administration, underpinned by meaningful consultation and engagement with stakeholders such as was demonstrated by former Minister Billson, is to be applauded,” Malley says.

Turnbull flags review of tax breaks on superannuation

Tax breaks on superannuation are back on the federal government’s agenda after Prime Minister Malcolm Turnbull yesterday flagged the need to review “very substantial” superannuation tax concessions.

The PM’s comments were made in Parliament yesterday after Opposition Leader Bill Shorten asked Turnbull if he would support a proposal to raise $14 billion in taxes over the next 10 years by scaling back current tax benefits for some of the country’s wealthiest people.

In response, Turnbull said Shorten was right to suggest there were “very substantial tax concessions” regarding superannuation and that “all of these matters are under consideration by the government”.

The comments are also being taken as the strongest sign yet of an about face on the issue after former PM Tony Abbott ruled out any changes earlier in the year,  Business Spectator reports.

Lost Super – new rules to help you find and claim it

New legislation should make it easier to claim lost superannuation, the total of which is estimated to be $20 billion across Australians – that’s a lot of money to go unclaimed.

Details of the draft legislation were released this week, with the aim of the new rules to make it easier for those trying to claim lost superannuation. It will also simplify the process of consolidating accounts, where super fund members have more than one, which will help reduce the fees paid by individuals.

The current legislation allows for super fund administrators to move unclaimed super accounts into an eligible rollover fund (ERF) so that the account doesn’t lose more in fees than it would receive in interest. The new legislation will allow for ERF fund administrators to combine inactive super accounts of any individual, without first having to contact them, to limit fees paid.

Currently, a super account is deemed to be lost if it has a balance of less than $2000 and the fund has been unable to contact the member for 12 months. The changes will acknowledge that people are becoming increasingly likely to contact their super fund via email or through an online transaction. This means that the classification of lost super will no longer be reliant on no communication by mail or phone.

A separate item of legislation is set to increase the balance at which an inactive account is deemed lost from $2000 to $4000.

If legislation is passed, the new rules will take effective from 30 June 2016.

Read more at The Age.

If you think you may have money in lost super, you can find out more on how to search at ATO.gov.au. It is worth noting that some of your details may not be recorded properly, so it’s worthwhile persevering if you think you have money unclaimed.

Have you ever tried to claim lost super? Did you find the process easy?