How are cryptocurrency transactions taxed in Australia?

Whether you’re currently involved in a cryptocurrency like bitcoin or considering buying a cryptocurrency, it’s vital to explore the tax implications. While these will vary according to your circumstances, and it’s important to seek professional advice, there are some basic tenets you can start with.

 

Getting started

 

No matter how you intend to use your cryptocurrency, you must keep accurate records of your buying and selling.

Your records must include:

  • transaction date
  • the value of the cryptocurrency in Australian dollars
  • what the transaction was for and who the other party was, including their cryptocurrency address.

 

Tax responsibilities

 

In Australia, cryptocurrency transactions are subject to both income and capital gains taxes. While your digital wallet can contain different types of cryptocurrencies, each one is counted as a separate asset for Capital Gains Tax (CGT).

A Capital Gains Tax event occurs when you ‘dispose’ of your cryptocurrency. Disposal may mean that you:

  • sell or gift cryptocurrency
  • trade or exchange cryptocurrency
  • convert cryptocurrency to fiat currency
  • purchase goods or services with cryptocurrency.

 

If you have transacted with a foreign cryptocurrency exchange you may have tax responsibilities in another country.

 

Personal asset use

 

Personal use assets are not generally subject to tax on transactions. Your cryptocurrency use may be regarded as a personal asset if it is kept or used to purchase personal items. This means that capital gains/losses that arise may be disregarded. For example, buying cryptocurrency specifically to purchase an item that can be paid for using cryptocurrency could be considered personal asset use.

It’s important to know that this does not apply if you are buying cryptocurrency as an investment, as part of a profit-making scheme or as part of a business.

 

Keeping up to date

 

Cryptocurrency is a rapidly evolving area. It’s important to stay up to date and understand any developments in tax consequences.

The ATO has a guide, including examples and links for additional information to help you.

 

Get in touch. We can explain the ATO’s rules and regulations for your investments and provide guidance for your situation.

 

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at info@devennypayne.com.au.

Happy Christmas!

Happy Christmas!

 

Happy Christmas!

We wish you a very happy Christmas and well deserved end-of-year break from your team at Devenny Payne.

It has been another challenging year for our clients. We hope you will be able to take some time at Christmas to connect with family and friends, even if not in person, to recharge and relax.

We are grateful for the opportunity to work with you and be a part of your continued prosperity.

 

Our office will be closed from Thursday 23rd December 2021 and reopen on Monday 10th January 2022.

 

Christmas Parties and Presents – and Tax!

 

Christmas is a great time to acknowledge and reward your employees and other associates by celebrating and giving gifts. But don’t get caught out by entertainment rules! Claiming entertainment and gifts as business expenses is not always straight-forward, as there are implications for GST, income tax and fringe benefits tax (FBT).

 

Is it Entertainment?

Entertainment is generally not a deductible business expense. Entertainment rules can be tricky, but in general, the more lavish the meal or event, the more costly, the later in the day and if alcohol is involved then it will generally be called entertainment.

Fringe benefits tax may apply to entertainment benefits provided to employees, and if an event or gift is considered to be entertainment then you cannot claim a business deduction or GST.

A Christmas party for employees, spouses, suppliers and customers may or may not be classed as entertainment. Check with us to see if any of the party costs can be claimed.

 

Keep it Free From FBT

  • If you give gifts to your employees keep them under $300 each. Benefits provided which have a value of less than $300 are exempt from FBT.
  • Give gifts to employees that they otherwise would have claimed as a tax deduction. For example, you could pay for a professional development course or give new tools.
  • Give gift cards or vouchers up to the value of $300. (Vouchers are not considered to be entertainment).
  • Avoid giving ‘entertainment’ gifts over $300, such as membership to clubs, tickets to events or travel.
  • Pay a Christmas bonus. Process through payroll like any other wage payment and withhold tax. Remember that superannuation applies to bonus wages.

 

Enjoy the Party

Talk to us when planning your Christmas gifts and events to check how much may be claimed as business expenses. Once you know the costs of throwing a party and giving gifts and bonuses, you can put your feet up and enjoy your own party!

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at info@devennypayne.com.au.

Single Touch Payroll Phase 2 Expansion is Nearly Here

The expanded Single Touch Payroll (STP) Phase 2 is due to start on 1 January 2022. However, the ATO has just announced that there will be some flexibility with the reporting start date being allowed up to 1 March 2022 if the business is not ready by 1 January.

Businesses must now report all employees via STP, and concessional reporting options are no longer available unless the employer has extraordinary circumstances. Employers should be reporting STP to the ATO on the day they pay employees.

 

What’s New with the Expanded Phase 2?

 

The STP Phase 2 report includes extra fields to allow for more detailed payroll information. The additional details enable the data to be reported to multiple government agencies using standard payroll categories.

This means the government agencies receive accurate data directly from the employer without extra forms or time-consuming administration.

 

STP Phase 2 Improvements

 

  • More income types and related special tax treatment.
  • Reporting gross pay in separate elements such as bonus, commission or overtime.
  • New employee tax file number declarations lodged directly with the ATO.
  • Employee termination information.
  • Clearer superannuation and lump sum payment reporting.
  • Easier for employees at tax time and when dealing with government agencies.
  • Better matching employer payroll data, employee tax return information, government agency payments and business activity statements.

 

The main payroll software providers are now bringing in phase 2 reporting categories, and in some cases, the changes have already happened in the background.

If you’re not already using an STP enabled payroll product, or you want to upgrade your software, talk to us about implementing a solution to make STP reporting quick and easy.

We can set you up with the right software or submit all the reports on your behalf.

 

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at info@devennypayne.com.au.

COVID-19 Government Assistance for Business – Handy Links

Business.gov.au has one handy webpage with links for all COVID-19 related financial assistance for businesses in all states and territories.

If you need to check business support grants, hardship schemes, disaster payments or other funding measures in your state, visit Business.gov.au COVID-19 financial support for small business webpage.

Information, eligibility and types of available aid are regularly changing or being updated as conditions vary.

Business.gov.au also has state-based information for financial assistance programs for specific industries such as accommodation, tourism or the arts.

Businesses with staff can access financial assistance for employers resources specifically for reducing the cost of maintaining payroll and supporting employees.

 

Other COVID-19 Business Resources

 

Business.gov.au provides excellent resources on a wide range of COVID-19 related topics. There is information on COVID-19 vaccinations and your business, business restrictions during COVID-19, keeping safe, looking after customers, mental health and wellbeing, COVID-19 fraud and other topics.

Visit Business.gov.au COVID-19 business resources for detailed information, checklists and templates, including further links to state-based authorities on restrictions and check-in requirements.

If you’d like to check that you are receiving all the assistance you are entitled to, book a time with us today to review your business situation and help you stay safe and keep your business running.

 

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at info@devennypayne.com.au.

Is your business ready for hybrid working?

Is your business ready for hybrid working?

The Covid pandemic has changed the way we work and ushered in a new era of hybrid working – but is your business ready and able to offer this mix of on-site, off-site, and remote working?

When businesses were forced to close down their physical offices and workspaces, this brought technology to the fore. We’ve seen an increased use of remote working, video technologies, and cloud-based business solutions – and people have got used to this ‘working from home’ ethic.

Hybrid working aims to take the best elements of remote working and to mix these up with the undeniable advantages of working together as an in-person team. If your business is going to embrace this approach then it’s likely that employees will be spending some time in the office, some time at home and some time out and about, or at the client’s worksite – but to do this, your company is going to need to provide the right environment for a hybrid approach.

The key question, then, is whether your business is ready to embrace hybrid working.

 

Setting the foundations for hybrid working

 

Any change in work patterns requires a certain amount of innovation from your business, plus the basic requirements of being able to deliver both remote and in-person working.

To get your business ready for hybrid working, it’s crucial to set the right foundations, and this means planning ahead and keeping an open mind to the benefits of this new approach.

To prepare for a hybrid approach, your business must:

 

  • Have the necessary cloud infrastructure – if your employees are going to work from home, or while out on the road, you need your key systems to be in the cloud. Old-school applications on an office-based server are just not going to cut it for hybrid working. Cloud-based accounting, project management, CRM, and workflow tools give you the flexibility to work from any location, with one ‘point of truth’ in the cloud for all your customer information and business data.

 

  • Have clear systems and processes – when people are working in different locations, at different times, it’s important to have some consistency around how the work is done. To achieve this you need well-defined operational systems, where each task has a pre-agreed process – so the whole team knows when, how, and where to carry out their day-to-day work, record notes or raise expenses and bills, etc.

 

  • Trust your employees to self-manage – when employees are no longer based in the office five days per week, it becomes more difficult to have management oversight. With some people home-working and some out at other locations, you need to place more trust in their ability to self-manage and work to a high standard. Increasing trust and reducing micro-management is key to making a hybrid approach work for the team.

 

  • Have performance reporting in place – trusting people to work hard is a given, but you do also need to know if the business is remaining productive. Having some form of performance reporting in place is a good idea, so you can review areas like productivity, staff attendance, sales targets and revenues generated, etc.

 

  • Empower people to get their jobs done – when you can’t all be in the office for the traditional ‘stand up team meeting’ it can be hard to build team spirit and keep your employees motivated. Try having regular Zoom/Microsoft Teams huddles, where teams come together to talk through the work for the week and can raise any issues. And also think about distance or in-person social events too, so people can let their hair down and enjoy being part of your business family.

 

Preparing for hybrid working

 

The companies that fully grasp the hybrid working opportunity will be more flexible, more scalable, and ready to react to new challenges and changing environments. So, there’s real value in forging ahead with this new approach.

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at info@devennypayne.com.au.

Payroll Updates – Minimum Wage, Super Increase and STP Finalisation Date

Payroll Updates – Minimum Wage, Super Increase and STP Finalisation Date

 

Navigating Payroll? We can help keep you up to date on changes this year, including new rules for casuals.

 

Minimum Wage Increase – 1 July 2021

The national minimum wage increases on 1 July by 2.5% to $20.33 per hour (or $772.60 per week).

The minimum wage increase applies to employees if an award or national minimum wage defines their pay rate.

This year, the Fair Work Ombudsman (FWO) has implemented minimum wage increases to awards in a staggered approach. Most awards increase on 1 July; however, the Retail Award will increase from 1 September, and a few awards will increase on 1 November.

For full details of award increases, visit Fair Work Ombudsman Annual Wage Review 2021.

 

Changes to Casual Employment

The Fair Work Act has been amended to include a Casual Employment Information Statement (CEIS), a formal definition of casual employment, and a pathway for casual employees to become permanent employees.Employers must now provide the CEIS to all casual workers upon starting with the employer, along with the National Employment Standards and Fair Work Information Statement. Visit the FWO Casual Employment Information Statement webpage for details and to download the form for your employees. For more information about casual employment definition and the options for becoming a permanent employee, visit FWO Changes to Casual Employment to check if you have to offer permanent positions to your employees.

 

Superannuation Increase from 1 July 2021

The superannuation guarantee statutory rate increases to 10% from 1 July. Your payroll software should automatically capture the changes, but check the rate is correct when you do your first pay runs in July. Review any agreements or annualised salary arrangements you have with employees that may be inclusive of superannuation.

 

Single Touch Payroll Finalisation

The ATO recognises the impacts of COVID-19 on the Australian community. If you need additional time, you can complete your STP finalisation up until 31 July.

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.

Small employers (fewer than 19 employees) that only pay closely held payees have until the payee’s income tax return due date.

 

Review Your Payroll Systems

The start of the financial year is the best time to review your payroll setup, policies and costs. Talk to us if you need to implement payroll policies, review payroll costs or update your casual worker details. And we can help you get the STP finalisation done on time – getting it right the first time means your employees will have accurate information for their tax returns. We can also review your pay setup and make sure it’s right for the start of the new financial year.

Let’s make a time!

 

If you have any further queries, please do not hesitate to contact our office on (03) 5366 0700 or send us an email at

info@devennypayne.com.au.