Tag Archives: de Kretser chartered accountants

Term Deposits explained

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How do term deposits work?

Term deposits are a way to invest your money and earn a fixed rate of interest.

 

Your money is locked away in an account, for the time that you choose (the term), usually between one month and five years. You need a minimum amount to open a term deposit, for example, $5,000.

Advantages of term deposits

Higher interest rates

Term deposits offer a higher interest rate than most transaction and saving accounts. Generally, the more money you put in, or the longer you invest, the higher the interest rate. Currently, interest rates on term deposits are high in Australia.

Protected by the Australian Government Financial Claims Scheme

The financial claims scheme (FCS) protects deposits made with Australian banks, building societies and credit unions. This guarantees to pay you up to $250,000 to replace deposits in the unlikely event your bank, credit union or building society fails. The safety net only applies to authorised deposit taking institutions regulated by APRA.

The Financial Claims Scheme (FCS) applies to a wide range of deposit accounts held with banks, building societies and credit unions (also known as authorised deposit-taking institutions or ADIs) that are incorporated in Australia, but only applies to deposit accounts with funds in Australian dollars. Under the FCS, deposits are protected up to a limit of $250,000 per account holder per ADI.

The list of banks, building societies and credit unions covered by the FCS is available here.

Under the FCS an account holder can be:

  • an individual
  • a body corporate (including companies)
  • a body politic
  • a partnership
  • any other unincorporated association or body of persons
  • the trustee(s) of a trust
  • the trustee(s) of a superannuation fund (including a self-managed superannuation fund)
  • the trustee(s) of an approved deposit fund.

An account holder can be an Australian resident/citizen or non-resident/non-citizen. In other words, the citizenship or residency status of an account holder does not have an impact on whether a deposit account is covered under the FCS. A group of individual trustees of a trust, superannuation fund or approved deposit fund are treated as a single account holder.

In the case of superannuation, an ADI deposit account held by the trustee of a superannuation fund on behalf of fund members is covered under the FCS up to the limit of $250,000. However, in most cases the $250,000 FCS limit would be applied to the whole fund, not each individual member.

The FCS applies to the following types of deposit accounts:

  1. savings accounts
  2. call accounts
  3. term deposits
  4. current accounts
  5. cheque accounts
  6. debit card accounts
  7. transaction accounts
  8. personal basic accounts
  9. cash management accounts
  10. farm management deposit accounts
  11. pensioner deeming accounts
  12. mortgage offset accounts (either 100 per cent or partial offset) that are separate deposit accounts
  13. trustee accounts
  14. retirement savings accounts

The FCS does not apply to the following accounts:

  • accounts with funds that are not in Australian dollars
  • accounts kept at overseas branches of Australian banks
  • credit balances on credit card facilities or other loans
  • pre-paid card facilities or similar products
  • ‘nostro’ accounts and ‘vostro’ accounts of foreign corporations that carry on banking business or otherwise provide financial services in a foreign country

Compare the features of term deposits

Always shop around for the highest interest rate and best features before you choose a term deposit. Be sure to compare products across different financial institutions. It’s important to check:

Interest ratewhat is the interest rate?
when interest is paid — monthly, annually or at maturity?
Time framehow long you can invest for?
how will interest rates change with different investment time frames?
Amount investedhow much you need to open a term deposit?
how will the interest rate changes the more you invest?
Feesis there are any set-up or account fees?
how big the penalty fee is if you need your money early?

Early withdrawal penalties

To earn interest on your term deposit, your money is locked away for a chosen period of time. If you need your money before the term ends, you may have to pay a penalty fee. You may only receive a proportion of the interest earnt, or none at all.

What to do when your term deposit matures

Term deposits are not a ‘set and forget’ investment. When your term deposit matures, your provider will contact you. They’ll tell you how much interest you’ve earned and what your options are.

If you do nothing, your term deposit may roll over into a new term deposit. There may be a fee to get your money out of the new term deposit. It could also have a lower interest rate than before.

Review your term deposit a month before it matures. Compare it with other products to make sure you’re getting the best deal.

For detailed information regarding tax implications regarding your term deposits please contact us the de Kretser team –

T: +61 3 9550 6900

E:admin@dekretser.com.au

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How to claim your homework.

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What’s changed?

The ATO stated that you always had to have a dedicated home office in order to claim any working from home expenses.

After 1 July 2022

Now the ATO have said that you no longer need a home office to claim deductions for working from home. Setting up the laptop on the kitchen table is now acceptable.

Fixed Rate method

This method involves using the hours actually worked from home to cover a variety of costs.

Pre 1 July 2022 – 52c/hour

The fixed rate covered:

  • electricity & gas
  • home office depreciation
  • cleaning of the dedicated home office

In addition to this, you could also claim the work use portion of your:

  • data & internet
  • mobile & home phone usage
  • computer consumables
  • stationery
  • depreciation of work related items such as computers

This was the method most accountants used, as it’s easier than calculating the home office electricity usage. You were required to keep a diary for 4 weeks of the year to prove how you came to your total hours.

After 1 July 2022 – 67c/hour

This method now includes:

  • data & internet
  • mobile & home phone usage
  • electricity & gas
  • computer consumables
  • stationery

In addition to this you can claim:

  • decline in assets such as computers and office furniture
  • repairs and maintenance of said assets
  • cleaning (if you have a dedicated office)

You are required, from 1 March 2023, to keep a diary all year to now substantiate the hours you claim.

Shortcut Method – 80c/hour

This was introduced in recognition of everyone working from home during COVID-19. It was available for use from March 2020 until 30 June 2022.

It covered everything! Which meant it wasn’t always the most tax effective – unless the boss was paying for your mobile phone bill and supplying your equipment and furniture.

  • data & internet
  • mobile & home phone usage
  • electricity & gas
  • computer consumables
  • stationery
  • decline in assets such as computers and office furniture
  • repairs and maintenance of said assets
  • cleaning (if you have a dedicated office)

Actual Method – always available

A lot more record keeping is required for this method – but it’s absolutely worth it.

This involves keeping a record of what actual hours you work from home. The ATO requires you keep a 4 week diary every year to substantiate your claim (they didn’t increase this to a whole year, unlike the fixed rate method from 1 March 2023). Using this, you can claim the business/work use of everything.

  • data & internet
  • mobile & home phone usage
  • electricity & gas
  • computer consumables
  • stationery
  • decline in assets such as computers and office furniture
  • repairs and maintenance of said assets
  • cleaning (if you have a dedicated office)

This is now the accountants preferred method as it results in the highest deduction. But if you don’t have good records, we will use the Fixed Rate Method – be warned!

Keeping Records

No matter what method you use, you have to be able to prove it. Keep a diary on you desk for 4 weeks of the year (or the whole year if you’re using fixed rate) and write down your start and finish times, go through your phone bill for a month and compare private vs business calls to determine your deductible percentage. Try and record your Facebook scrolling vs work research on your phone or home computer for internet deductible percentage. And last but not least, don’t be afraid to make a claim – if you’re actually using these things to generate an income, you can claim it!

Make use of the ATO myDeductions App to help you out with recording your expenses too, especially the big purchases like a computer or phone.

This only a short guide on how to maximise your homework – please contact us for a more tailored approach to your specific needs.

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Should you need assistance, please do not hesitate to contact us.
T: +61 3 9550 6900 E:admin@dekretser.com.au

Trusts – Are they still worth it?

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The recent ATO crackdown on trusts will no doubt have some business owners (and even some advisors) asking themselves the question: Is this structure for business purposes still worth it?

To recap, trust distributions have been under the ATO microscope in recent years. The latest ATO crackdown was in February 2022 when it updated its guidance around trust distributions especially those made to adult children, corporate beneficiaries and entities that are carrying losses. Depending on the structure of these arrangements, the ATO may potentially take an unfavourable view on what were previously understood to be legitimate distribution arrangements.

The ATO is chiefly targeting arrangements under section 100A of the Tax Act; specifically, where trust distributions are made to a low-rate tax beneficiary but the real benefit of the distribution is transferred or paid to another beneficiary, usually with a higher tax rate.In this regard, the ATO’s Taxpayer Alert illustrates how section 100A can apply to the quite common scenario where a parent benefits from a trust distribution to their adult children. Despite this new ATO interpretation and the wider crackdown on trusts in recent years, the choice of a trust as a business structure still has a range of benefits including:

■Asset protection– Limited liability is possible if a corporate trustee is appointed. Usually, when a person owes money and cannot meet their payment requirements, the creditor can access the person’s personal assets to recoup the debt payable. However if a trust is in place, there is no access to beneficiary assets 50% CGT discount– A family trust receives a 50% discount on capital gains tax for profits made from selling any assets the trust has held for more than 12 months. This contrasts with a company structure. Companies cannot access the 50% CGT discount.

■Tax planning– Income that sits in the family trust that is not distributed by year-end is taxed at the highest income tax rate. However, any trust income distributed to the beneficiaries is taxed at the income tax rate of the beneficiary who receives the distribution. The way to definitely get around the ATO’s aforementioned section 100A crack down is to ensure the distributed money actually goes to the nominated beneficiary and is enjoyed by the beneficiary rather than another taxpayer

■Carry-forward losses– A trust does not distribute losses to beneficiaries. This means the beneficiaries will not be called upon to contribute money to the trust to meet any loss. Instead, losses from each year can be carried forward to the following year, subject to certain conditions being met.

Common mistakes made by family trusts that will attract the ATO’s attention include:

  • Purported distributions to tax-advantaged organisations, such as charities, that are not beneficiaries;
  • The trustee failing to make year-end trust distributions until after June 30;
  • The trustee incorrectly calculating trust income, or mischaracterising income and gains; and
  • Family trust election not being made in time or failing to properly specify the beneficiary, resulting in tax benefits going outside the family group.

This only a short guide to possible issues that may arise regarding Trust – please contact us for a more tailored approach to your specific needs.

To stay and informed and connected, follow us on LinkedIn

Should you need assistance, please do not hesitate to contact us.
T: +61 3 9550 6900 E:admin@dekretser.com.au

Maximise Your Rental Claims – A Quick Guide to Repairs, Maintenance and Capital Works

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Repairs and maintenance


The cost of repairs and maintenance may be deductible in full in the year you incur them if both –
•the expense directly relates to wear and tear or other damage that occurred while renting out the property
•the property either –
– continues to be rented on an ongoing basis
– remains available for rent, but there’s a short time when the property is unoccupied (for example, where unseasonable weather causes cancellations of bookings or all reasonable efforts to attract tenants were unsuccessful).

Repairs
Generally, repairs must relate directly to wear and tear or other damage that occurred while renting out the property and can be claimed in full in the same year you incurred the expense.
Examples of repairs include:
•replacing broken windows
•repairing electrical appliances or machinery
•replacing part of the guttering damaged in a storm
•replacing part of a fence damaged by a falling tree branch.

Maintenance
Maintenance generally involves keeping your property in a tenantable condition. It includes work to prevent deterioration or to fix existing deterioration.
Examples of maintenance include:
•repainting faded or damaged interior walls
•oiling, brushing or cleaning something that is otherwise in good working condition (for example, oiling a deck or cleaning a swimming pool)
•maintaining plumbing.

Capital expenditure that may be claimable over time.

Capital allowances
Depreciating assets are items that can be described as plant, which don’t form part of the premises. These items are usually:
•separately identifiable
•not likely to be permanent and expected to be replaced within a relatively short period
•not part of the structure.


When claiming a deduction for decline in value for each asset, you can choose to use either:
•the effective life the Commissioner has determined for these types of assets
•your own reasonable estimate of its effective life.

Where you estimate an asset’s effective life, you must keep records to show how you worked it out.
Examples of assets decline in value include:
•floating timber flooring
•carpets
•curtains
•appliances like a washing machine or fridge
•furniture.

Capital works
Capital works describes certain kinds of construction expenditure used to produce income. The rate of deduction for these expenses is generally 2.5% per year for 40 years following construction.

Capital works include:
•building construction costs
•the cost of altering a building
•major renovations to a room
•adding a fence
•building extensions such as garages or patios
•adding structural improvements like a driveway or retaining wall




























This only a short guide to possible gains – please contact us for a more tailored approach to your specific needs.





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Should you need assistance, please do not hesitate to contact us.
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A Guide to the changes in Family Trusts.


							

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ATO finalises Section 100A guidance for Family Trusts





Do you operate your business via a family trust? 





The ATO released its final guidance material on the application of section 100A late last year. In doing so, it has fortunately clarified a number of issues.





To recap, the ATO in February 2022 updated its guidance around trust distributions made to adult children, corporate beneficiaries and entities that are carrying losses. Depending on the structure of these arrangements, potentially the ATO may take an unfavourable view on what were previously understood to be legitimate distribution arrangements. 





The ATO is chiefly targeting arrangements under section 100A of the Tax Act, specifically where trust distributions are made to a low-rate tax beneficiary but the real benefit of the distribution is transferred or paid to another beneficiary usually with a higher tax rate. 





In this regard, the ATO’s Taxpayer Alert illustrate show section 100A can apply to the quite common scenario where a parent benefits from a trust distribution to their adult children. The final guidance is not the law and represents no more than the ATO’s view about how the law applies. It carries no legal authority, and clients in consultation with us as your advisor may consider venturing out into deeper and rougher waters, depending on your circumstances.





Following the release of the ATO material, there are a number of risk management options going forward:





■ Only distribute to Mum and Dad. This would be quite safe from section 100A scrutiny. No person pays less tax as a result of any agreement, and this is unlikely to be seen as high-risk by the ATO.





■ Continue to distribute to young adult beneficiaries, but hand over the money If you are happy to give money to your children, this can be achieved while at the same time optimising tax.





■ Charge board and current university fees If adult beneficiaries are living at home, they should pay board (just as if they had a job). This will not add up to large sums, but arm’s-length board for a full year could come to about $18,000. This allows for some tax arbitrage without handing the kids any money.





■ Use of bucket company. Three preconditions must exist for a bucket company to function: 





  1. There needs to be a trust with income to distribute. 
  2. The trust deed of the trust must allow for corporations to be beneficiaries. 
  3. The corporate beneficiary must fall within the definition ‘beneficiary’ under the trust deed.





Having a private corporate beneficiary caps the tax rate imposed on trust income. Franked dividends can subsequently be flexibly allocated through having a trust structure interposed between the bucket company and the beneficiaries. The present entitlement can be lent back to the trustee for use in the business of the trust, although there are minimum repayment conditions. Avoid having the main trust as a shareholder in the bucket company. The ATO considers circular income flows to be high-risk.





■ Be alert for the “no reimbursement agreement” argument If you are contemplating making a gift or an interest-free loan to another person, ask questions about the circumstances behind this plan. If it was not in contemplation at the time of the relevant appointment of trust income (up to two years ago), but has arisen because family circumstances have changed recently, there may not be a reimbursement agreement.





■ If making gifts, go once and go big! You are unlikely to escape ATO attention if you have beneficiaries making gifts or loans year-after-year. So, where there is a strong argument to support the ordinary dealing exception, try to make it once-off, and for a significant amount if possible.





Through a deep understanding of the personal and business structures of our clients, the de Kretser team are ready to assist you with your trust requirements, bringing about tax-effective outcomes tailored to the specific requirements at hand. 



























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Should you need assistance, please do not hesitate to contact us.
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New ‘work from home’ Deduction Rules – all you need to know.


							

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The ATO has issued new draft guidelines around a new method (the revised fixed rate method) of calculating work-from-home running expenses from 1 July 2022 (as an alternative to calculating the actual work-related portion of all running expenses). 















The new revised fixed rate method will replace both:





■the 52 cents fixed-rate method for electricity and gas expenses, home office cleaning expenses and the decline in value of furniture and furnishings, 





■the short-cut (COVID-19) 80 cents method (for all additional running expenses). 










You are eligible to use the revised fixed-rate method from 1 July 2022 if you:





■work from home to fulfil your employment duties or to run your business (a separate home office or dedicated work area is not required)





■incur additional running expenses that are deductible, and





■keep and retain records of the time spent working from home and of the additional running expenses incurred.





New rate





The new rate of 67 cents (replacing the fixed rate of 52 cents  was “based on the Australian Bureau of Statistics (ABS) household expenditure survey with consideration of annual Consumer Price Index (CPI) weightings”.  It allowed 52c per hour for each hour a taxpayer worked from their home office to calculate their electricity and gas expenses, home office cleaning expenses and the decline in value of furniture and furnishings. In addition, a separate deduction for the taxpayer’s work-related internet expenses, mobile and home telephone expenses, stationery and computer consumables and the decline in value of a computer, laptop or similar device could be claimed.





The revised 67 cent fixed rate under the new rules is inclusive of:





■internet expenses





■mobile and/or home telephone expenses, and





■stationery and computer consumables.





The inclusion of these expenses within the revised fixed rate, when coupled with the current high inflation environment, means that there is a high likelihood that taxpayers may be worse off when moving from 52 cents to 67 cents.





Record keeping 





From 1 January 2023, will see the need for you to keep a record of the actual hours worked from home (e.g. timesheets, rosters or a diary kept contemporaneously). This is more onerous than the 52 cent method where you only needed to keep a record to show how many hours you worked from home. 





The ATO under the new revised fixed rate method also requires evidence in relation to each of the running expenses listed above. 





For energy, mobile and/or home telephone and internet expenses, one bill per item needs to be retained. 





If the bill is not in your name, additional evidence is needed to prove that you incurred the expenditure. For stationery and computer consumables, one receipt needs to be kept for an item purchased. 





Under the new method, the amount that can be claimed will potentially be lower, while the compliance obligations are higher – the taxpayer not only needs to keep a record of times spent working from home, but also there is a need to keep an invoice/receipt for each of the additional costs, such as an electricity bill. 





This is a new requirement which never formerly existed under either of the replaced fixed rate methods. While the new draft guidance offers a transitional arrangement until December 2022, individuals currently availing themselves of the 52 cent fixed rate method will need to consider whether they can meet the additional administrative burden from 1 January 2023, or whether the “actual expenses” method is amore achievable alternative.





Contact Us





If you are uncertain which method is best for you please contact us directly to discuss your circumstances.





Please do not hesitate to get in touch and one of our de Kretser members would love to help you in the right direction.





T: +61 3 9550 6900  E:admin@dekretser.com.au





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Knowing your tax deductions


							

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Tax deductions: 


18 things you didn’t know you could claim


Small business owners can often fall into old habits at tax time, without considering some of the less obvious or most recent ATO tax deductions available. ]To keep a healthy bottom line, businesses need to be smarter and sharper every financial year.


It is always time to consider and prepare your business to claim and receive all you are entitled to. 




What are tax deductions?




A tax deduction is a claimable expense item that is directly related to earning your business income, and that can be recorded on your tax return.




How do tax deductions work?




You can reduce your taxable income by the amount you spent, which lowers the amount of tax you pay and boosts your tax refund.


When completing your tax return, there are a number of deductions you can claim against expenses related to your work.


Things like travel expenses, home office expenses, education and even internet and mobile phone connection expenses may be tax deductible.




Maximising your deductions


1. Prepay expenses


With tax deductions, every little bit counts. Prepaying your expenses can bring forward your tax deductions so you don’t need to wait another year to get it.


You can prepay expenses such as subscriptions, business travel expenses, training events, leases, rent, phone, internet, insurance and business asset repairs, not exceeding more than one year.


2. Review your stock and inventory


Take a good look at your stock, identify any damaged or obsolete stock and write it down or write it off. This exercise will impact the value of the trading stock and your profit margins.


You will also need to consider how to value your stock trading every financial year, as you may be entitled to a tax deduction when the opening stock exceeds the closing stock.


3. Review your asset acquisition


Do you need new assets? Now may be a good time to purchase them.


As part of the Federal Government’s Coronavirus Stimulus Package, the Instant Asset Write-Off threshold increased from $30,000 to $150,000 (net of GST) per asset acquired.


The items purchased can be brand new or second-hand and need to relate to your business. This deduction applies to assets purchased prior to 31 December 2021 and it must be installed and ready for use by 30 June 2022. Paying for it or receiving an invoice is not enough.


4. Union fees


If you pay these each year, you’re entitled to a tax deduction under ‘D5-Other’ work-related expenses.


5. Donations


Don’t get caught out on this one. Donations of $2 or more to an appropriate charitable organisation is tax deductible if you have a receipt.


But not all deductions are equal. Donations must be made to a Deductible Gift Recipient in order to be claimable. Most private donations such as Go Fund Me causes are not deductible.


6. Rental property expenses


Rental property expenses often go unclaimed. The most-forgotten deductions are:


    

  • Bank fees
    • 

  • Gardening and lawn mowing
    • 

  • Pest control
    • 

  • Security patrol fees
    • 

  • Secretarial and bookkeeping fees
    • 

  • Travel and car expenses for rent collection
    • 

  • Inspections of property and maintenance.
    • 



7. Working-from-home expenses


With COVID-19 causing many people to work from home, the ATO have introduced a temporary 80 cents per hour, all-inclusive claim amount for employees. It’s limited to the period from 1 March 2020 to 30 June 2022 and all you need are timesheets, rosters, diary or other documentation to prove the house you worked from home.


Best of all, it’s an all-inclusive rate, so there’s no need for receipts or invoices.


8. Home office expenses


If you work from home, you may be able to claim “occupancy cost” and the cost of using your personal computer, software, equipment, furniture, lighting, heating and a percentage of your rent/mortgage as a tax deduction.


But you may not get the full main residence exemption if your home is your principal place of business, for more information visit the ATO website.


9. Income-protection insurance


You’re entitled to a tax deduction for insurance premiums paid against the loss of income. Remember, though, that this doesn’t include life insurance, trauma insurance or critical-care insurance.


10. Medical expenses


You can claim a deduction for net eligible expenses for disability aids, attendant care or aged care.


Learn more about this type of deduction via the ATO website.


11. Work-related car expenses


Business owners who use their personal car for work-related reasons, apart from driving to and from work, can usually claim fuel and maintenance costs as a tax deduction.


To be eligible, you must be the owner of the car and your travel must be part of your working day.


Common examples are driving between offices, special trips to the post office or bank, or moving from one job site to another.


12. Internet expenses


If you ever work from home and you have your internet connection in your name, then it’s likely you could claim your internet expenses as a deduction. Estimate your monthly work use as a percentage of the total household use.


13. Mobile-phone expenses


As a business owner, you can claim the cost of your work-related calls, not your entire phone bill.


It’s a good idea to keep a logbook of when you use your personal phone, to determine the average percentage of your calls that are work-related.


14. Self-education expenses


You can claim self-education expenses if there’s a connection between the course and your role in your business. You could be entitled to a tax deduction for expenses including the following:


    

  • Textbooks, professional and trade journals
    • 

  • Stationery
    • 

  • Photocopying
    • 

  • Computer expenses
    • 

  • Student union fees
    • 

  • Student services and amenities fees
    • 

  • Accommodation and meals, only when participating in your course requires you be away from home for one or more nights
    • 

  • Running expenses if you have a room set aside for self-education purposes – such as the cost of heating, cooling and lighting that room while you are studying in it
    • 

  • Allowable travel expenses.
    • 



Self-education expenses are broken into five categories. If all your self-education expenses fall into ‘category A,’ then you can reduce your deduction by $250.


15. Sun protection


You’re entitled to a tax deduction for sunglasses if, as part of your employment, you’re required to work outside for prolonged periods.


There’s no limit on how much you can spend on sunglasses, but remember that if they cost more than $300, the ATO expects that they should then last for more than 12 months. (You should claim the depreciation on the glasses rather than an upfront deduction.)


16. Laundry expenses


You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.


You can use a reasonable basis to calculate an amount to claim as a tax deduction such as $1 per load for work-related clothing, or 50 cents per load if other laundry items were included.


17. Cost of managing your tax affairs


Did you use a tax agent to prepare and lodge your tax return last year? If you did, then you can claim the amount you paid last year on this year’s tax return.


On your tax return, simply put the amount you paid into section ‘D10 – Cost of Managing Tax Affairs’. The fees you pay for tax return help are always tax deductible.


18. Financial loss and bad debts


Don’t overlook the possibility of facing a financial loss this year. Speak to your financial advisor to discuss steps that can be taken to minimise the impact, and what can be done to help offset the loss against other incomes, such as salaries and wages.


You’ll also need to prove that you have made a genuine attempt to recover any bad debts that may have arisen. Your financial advisor can explain how to document the debt as evidence the amounts were written off before the end of the financial year.




We are here to help


As always – we are here to assist you, please contact us should you need to discuss your options further.


All at de Kretser wish you and your loved ones a brilliant holiday season!








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A new frontier  .au is here!


							

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The domain namespace,  “.au” has been made available exclusively to existing Australian domain name owners from 24 March 2022 – 20 September 2022. 





After this time, if you have not registered your business name’s .au address – anyone can.





The “.au” has a Direct namespace and is intended to complement, rather than replace, the existing second-level domain namespaces and to provide domain holders with the option to register shorter, simpler domain names.





Unlike the existing second-level domain namespaces, there is no restriction on the domain names that can be registered in the .au namespace, provided the domain name applicant satisfies the Australian presence requirement.





 A domain name ending in .au signifies that the person or organisation using it has a connection Australia. In .au we have several different namespaces serving different sectors and purposes and with different rules for who can register them and what name they can have.





‘Open’ .au namespaces





The open namespaces are those in which the public can register names, provided they are eligible.





Each name space serves a specific type of enterprise or purpose and rules for who can register in them, and what names they can register vary between them.





The rules for who can register what names in these open namespaces can be found in the .au Domain Administration Rules: Licensing.









Background





The domain name was originally allocated by Jon Postel, operator of IANA to Kevin Robert Elz of Melbourne University in 1986.





After an approximately five-year process in the 1990s, the Internet industry created a self-regulatory body called .au Domain Administration (auDA) to operate the domain. It obtained assent from ICANN in 2001, and commenced operating a new competitive regime for domain registration on 1 July 2002. Since this new regime, any registration has to be ordered via a registrar.









Ready for the next step.





Registrations are currently permitted below a second-level domain, such as “yourname.com.au”. In April 2016, auDA announced it would introduce registrations directly at the second level, such as “yourname.au”. 





Direct registrations were due to be implemented in 2017 although due to an ongoing debate on how cybersquatting would be mitigated with the release of the direct second-level registrations has led to a delay, with a new launch date of 24 March 2022.





Registration of a .au domain is completed through a reseller, known as a registrar, with the registry acting as the wholesale provider. auDA manages domain name policy as the ICANN and Australian Government-endorsed manager of the .au DNS.





Second-level domains





  • .com.au – Commercial entities
  • .net.au – Commercial entities (historically only ISPs, but the use has been broadened)
  • .org.au – Associations and non-profit organisations (historically only for organisations that did not fit in other categories)
  • .edu.au – Educational institutions (see Third-level domains, below)
  • .gov.au – Governments and their departments (see Third-level domains, below)
  • .asn.au – Associations and non-profit organisations
  • .id.au – Individuals (by real name or common alias)
  • .csiro.au – CSIRO (Commonwealth Scientific and Industrial Research Organisation)





The *.edu.au, *.gov.au and *.csiro.au namespaces are referred to as “Closed” namespaces, since registration is not available to the general public. All other second-level namespaces are referred to as “Open” namespaces.





The new rules provide an “Australian presence” requirement for all domain name holders. To satisfy the Australian presence requirement, an individual must be an Australian permanent resident or citizen, while an organisation must either be incorporated in Australia or hold an Australian Business Number (ABN). Holders of an Australian trade mark also satisfy the Australian presence requirement, provided the domain name is an exact match of the trade mark.





For most domain types, the licensing rules also require that the domain name must be:





  • a match, acronym or abbreviation of the name of the holder; or
  • a match of the name of products, services, events, programs, premises or activities associated with the domain name holder; or
  • a match of the holder’s Australian trade mark.





Sub-licensing of a domain name is prohibited, unless the domain name holder is a parent company of the licensee.



















What’s next?





You are not obligated to sign up for the .au address, though it may be something your business would like to consider.





If you need help with this – please do not hesitate to get in touch and one of our de Kretser members would love to help you in the right direction.





T: +61 3 9550 6900  E:admin@dekretser.com.au





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STP Information


							

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What is STP?





STP (Single Touch Payroll) works by sending tax and super information from your STP-enabled payroll or accounting software to the ATO as you run your payroll.






























You will:





  • run your payroll
  • pay your employees as normal
  • give them a payslip.





Your pay cycle does not need to change. You can continue to pay your employees weekly, fortnightly or monthly.





Your STP-enabled payroll software will send a report to the ATO which includes the information, such as:





  • salaries and wages
  • pay as you go (PAYG) withholding
  • super liability information.





If you have 20 or more employees, you should be reporting closely-held (related) payees each pay day along with arms-length employees. The finalisation due date for closely-held payees is 30 September each year. A ”closely-held (related) payee” is an individual directly related to the entity from which they receive payments (for example, family members of a business, directors or shareholders of a company, or beneficiaries of a trust).





For small employers (19 or fewer employees) who only have closely-held payees, the due date for end-of-year STP finalisation will be the payee’s income tax return due date.





For an employer with a mixture of both closely-held payees and arms-length employees, the due date for end-of-year STP finalisation for closely-held payees is 30 September each year.





All other employees are due 14 July each year.





Before making your finalisation declaration, make sure your STP information is correct. If you can’t make a finalisation declaration by the due date, you will need to apply for a deferral.





If you have any requirements here – de Kretser can take them up for you.










You may finalise your data earlier if it’s ready. The sooner you finalise your employees’ information, the sooner they will be able to lodge their tax returns for 2021/22.





This finalisation process is explained in detail in the STP employer reporting guidelines, including amendments for current and previous financial years. As noted, we can assist you in this process. When you have reported and finalised your employees’ information through STP, you are exempt from:





■ providing payment summaries to your employees





■ lodging a payment summary annual report.





For payments to your employees that were not reported through STP, you still need to:





■ give a payment summary to your employees





■ provide the ATO with a payment summary annual report for these payment summaries.





If you identify that you need to make an amendment after you have submitted a finalisation declaration, you’ll need to submit these as soon as possible. 





You can make the amendments to finalised STP data in your STP solution. The ATO recommend you tell your employees when you make an adjustment that will be reflected in their income statement. If they have already lodged their tax return they may need to lodge an amendment.















You will need to tell your employees:





■ you are no longer required to provide them with a payment summary for the information you’ve reported and finalised through STP





■ they can access their year-to-date and end-of-year income statement online through myGov or talk to their registered tax agent





■ ‘income statement’ is the new term for their payment summary (if they don’t already know this from last year)





■ to wait until their income statement is ‘Tax ready’ before lodging their tax return





■ to check their personal details and if necessary, update with both you and the ATO (incorrect personal details may prevent them from seeing their STP information). If an employee does not have a myGov account, they can easily create one online.





They can also talk to the de Kretser team who can easily access your required statement information, and assist you will all you need to satisfy this business necessity.
































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This is a de Kretser Client Information Newsletter keeping you on top of the issues, news and changes you need to
know. Should you require further information on any of the topics covered, please contact us via the details below.
T: +61 3 9550 6900 E:admin@dekretser.com.au