Tax Audit Insurance provides cost effective protection and peace of mind against professional fees incurred should the ATO or other Australian government agency conduct a random review, investigation or tax audit.
 
The cover is provided through Accountancy Insurance, who are partners with over 2,000 accounting firms nationwide, and are acknowledged as continually setting the benchmark in Tax Audit Insurance. The cover is underwritten by Vero Insurance. With 180 years’ heritage and the size, strength and scale of the Suncorp Group behind it, Vero is the preferred name in Australian general insurance.

The following official enquiries, reviews, investigations and audits are covered by Audit Shield:

• Income, Land and Payroll Tax
• BAS/GST Compliance
• Workers Compensation / WorkCover
• Superannuation Guarantee and Compliance
• Self -Managed Superannuation Funds
• FBT
• Record Keeping
• Research and Development Grants (ATO Only)
• Stamp Duty

The cover extends to professional fees in responding to, or representing you, in a review, audit or investigation. These include not only our fees, but also legal fees, bookkeeping fees and specialist professional advisor fees (e.g. quantity surveyors, valuers, actuaries, etc).

As a guide, individuals and businesses with a turnover of less than $1m would enjoy cover of $10,000. Businesses turning over between $1m and $10m would enjoy cover of $20,000.

The cost varies depending on whether you are an individual , self-managed super fund or a business.

As a guide, the premium is $95 per year for an individual, and $405 per year for a business with a turnover of between $500,000 and $1 million.
  
The premium is fully tax deductible.

In the case of business cover, associated individuals and family entities can be covered by the same policy – for no extra cost.  

The main exclusions from the policy are:

• The review or audit was underway before coverage began.
• The return that is the subject of scrutiny was prepared fraudulently;
• The ATO impose a final culpability penalty of 75% or more (typically, this is in cases of recklessness or deliberate evasion);
• There are fees associated with a criminal prosecution; 
• Costs are incurred for work which should have been done prior to the audit or review taking place;
• Matters in relation to the application, assessment or review of government benefits or entitlements.

Contact Jenny Geelan of our office on (02) 9477 3334 for a no obligation quote that has been tailored to your specific circumstances.

The SuperStream standard is part of the government’s Super Reform package. It will provide a consistent, reliable electronic method of transacting linked data and payments for superannuation. The goal is to improve the efficiency of the superannuation system, to improve the timeliness of processing of rollovers and contributions, and reduce the number of lost accounts and unclaimed monies.

What is SuperStream?

SuperStream is a government reform aimed at improving the efficiency of the superannuation system.

Under SuperStream, employers must make super contributions on behalf of their employees by submitting data and payments electronically in a consistent and simplified manner.

How will SuperStream benefit employers?

These changes have a range of potential benefits for employers, including:

• the opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to
• less time spent dealing with employee data issues and fund queries
• greater automation and reduced cost of processing contributions and payments
• more timely flow of information and money in meeting your superannuation obligations.

Who does SuperStream apply to?

SuperStream is mandatory for all employers making super contributions, APRA-regulated super funds, and self-managed superannuation funds (SMSFs) receiving contributions.

Why is SuperStream being introduced?

The main purpose of SuperStream is to ensure employer contributions are paid in a consistent, timely and efficient manner to a member’s account. The change also removes many of the complexities employers currently face as a result of funds being able to set up different arrangements for accepting contributions (due to the lack of common standard).

When do I have to start using SuperStream?

20 or more employees: If you have 20 or more employees (medium to large employer) SuperStream started from 1 July 2014. From that date, employers needed to start implementing SuperStream and have until 30 June 2015 to meet the SuperStream requirements when sending superannuation contributions on behalf of employees.1

We are facilitating the implementation of SuperStream for employer contributions by coordinating the introduction of compliant SuperStream solutions. You will need to work with your service provider to decide when best suits to make the change.

19 or fewer employees: If you have 19 or fewer employees (small employer), SuperStream starts from 1 July 2015. You have until 30 June 2016 to meet the SuperStream requirements when sending superannuation contributions on behalf of your employees.2

Note: You can voluntarily adopt the SuperStream from 1 July 2014 if you are ready, and many solution providers may offer to assist you to do this from this date.

What are my options for meeting SuperStream?

Every business is different, so there’s no ‘one size fits all’ approach to adopting SuperStream.

Employers have options for meeting SuperStream – either using software that conforms to SuperStream; or using a service provider who can meet SuperStream on your behalf. We recommend that you start investigating your options now.

Your options may include:

• upgrading your payroll software
• using an outsourced payroll function or other service provider
• using a commercial clearing house or the free Small Business Superannuation Clearing House (19 or fewer employees).

Your default fund may also have its own electronic channel that can be used during the transitional period up to 30 June 2016. This fund can provide you with details about how to comply with the SuperStream using their preferred facilities.

Do I need to collect additional information to make contributions using SuperStream?

Yes. To support contributions being made using the SuperStream standard employers will need to collect some new data that will be included in their payroll file to facilitate electronic processing.

Employers will need to collect the following information:

• unique superannuation identifier (USI) for APRA-regulated funds
• ABN for SMSF funds
• bank account details
• electronic service address.

For existing employees, simple processes will be implemented to enable employers to obtain this information. This may include receiving information:

• direct from your
• through the Fund Validation Service
• via employees who have elected a choice fund (such as a self-managed super fund)
• through a clearing house.

For new employees, the choice of super fund form will be updated to include this information.

Your HR or payroll provider will provide you with options to support the capture of this information whether this is updating your existing payroll file or storing this information until an update is made available.

To support your readiness for SuperStream you should contact your HR/payroll solution provider to understand their plans.

What information do I need to collect from SMSFs?

If you have an employee who is a member of a SMSF, they must provide you with details about their fund which enables you to deal with them electronically, so supporting your implementation of SuperStream.

This information includes the ABN of the SMSF, their bank account details, and an electronic service address. This information will enable you to send contributions and payments electronically in the same way for all employees.

Typically, this information should be updated into your payroll records (or provided to an agent who may assist you with contributions). You will generally only need to do this once. As new employees join your business, they will provide this information as a matter of course when they complete a choice of fund form.

To simplify this process on your first time through, it is suggested that you notify employees of your intended date for implementing SuperStream and request this information to be forwarded by the employee within a reasonable time – for example, within 28 days of a reminder. We have already written to SMSF trustees associated with large and medium employers informing them of their obligation to provide this information to their employer, and a similar letter will be issued to remaining SMSF trustees shortly.

Your employee can communicate this information in a variety of ways (paper, email, or direct update to your payroll/HR system), provided the minimum data is provided and is valid or complete.

What if I haven’t got all the SMSF details I need?

If you do not receive the SMSF’s details by the date you have nominated for responding – and provided a reasonable response period has been given – you may ask your employee to complete a standard choice form and return this form to you within 28 days.

The current standard choice form has been updated to contain fields which include the required mandatory information to support SuperStream (including the ABN of the SMSF, their bank account details, and an electronic service address). An existing employee may have previously completed such a form, their selection of choice must now be updated with the new information.

If this information is not provided, your employee will be deemed as not having provided sufficient details for the choice fund to be accepted, and you may redirect their contributions to the default fund of the employer.

An employer in this situation may, nevertheless, decide to give an employee more time to respond and continue paying by cheque or some other non-conforming method. This should only be considered as a temporary measure because it is likely to erode the benefits employers should gain from the overall shift to a consistent, electronic method for all contributions.

Remember that large and medium employers need to be SuperStream compliant by no later than 30 June 2015, so the lead time for notifying your employees with SMSFs is shortening.

The net medical expenses tax offset is being phased out. Changes this year mean you need to check your eligibility before claiming the offset in your tax return.

Net medical expenses are total medical expenses less refunds from Medicare or a private health insurer which you, or someone else, received or are entitled to receive.

“If you received the offset in your 2013-14 income tax assessment, there is no change to the types of net medical expenses you can claim.

f you did not receive the offset in your 2013-14 income tax assessment, you can only claim net medical expenses relating to disability aids, attendant care or aged care”.

If you are eligible, an income test still applies based on your family status and adjusted taxable income.

For the 2013–14 financial year onwards, excess concessional contributions are no longer subject to excess contributions tax. If your contributions exceed the cap, the amount will now be included in your assessable income and taxed at your marginal tax rate, rather than the excess concessional contributions tax rate of 31.5%.

You will also have to pay the excess concessional contributions (ECC) charge on the increase in your tax liability. This charge is applied to recognise that the tax on excess concessional contributions is collected later than normal income tax.

To reduce your tax liability, the tax office will apply a 15% tax offset to account for the contributions tax that has already been paid by your super fund provider.

You may elect to withdraw up to 85% of your excess concessional contributions from your superannuation fund to help pay your income tax assessment when you have excess concessional contributions. Any excess concessional contributions withdrawn from your fund will also no longer count towards your non-concessional contributions cap.

Example: Excess concessional contributions

During the 2013–14 financial year, Mary (aged 51), salary sacrificed money to super, and her total contributions were $35,000. Because Mary’s concessional cap was $25,000, Mary’s excess concessional contributions total $10,000.

Mary lodges her income tax return, and has taxable income of $70,000. The ATO then includes the $10,000 of excess concessional contributions, which increases Mary’s taxable income to $80,000. Mary will be assessed at her effective marginal tax rate of 34% (including 1.5% Medicare levy).

The additional tax payable as a result of the excess concessional contributions is $3,400.

Mary is now entitled to a tax offset equal to 15% of her excess concessional contributions, decreasing her tax liability by $1,500.

With the inclusion of the excess concessional contributions (ECC), Mary’s tax liability has increased by $1,900 ($3,400 – $1,500), and the ECC charge will be applied to this amount.

Mary doesn’t have to do anything; we will notify her by sending the following:

• an income tax notice of assessment
• an excess concessional contributions determination
• an excess concessional contributions fact sheet
• an excess concessional contributions election form.

Mary has 21 days to pay her account. She decides to take up the option to withdraw some of her excess concessional contributions from one of her super funds to help pay her tax debt.

Mary completes the excess concessional contributions election form and decides to release the full amount of $8,500. She sends the election form to the ATO, which then issues a release authority to Mary’s nominated fund to have the money released to the ATO. Upon receipt of the money, the ATO offsets the amount against any debts Mary has, before refunding her the balance.

(End of example)

Including ECC in your assessable income may impact your pay as you go instalments. For more information, refer to PAYG instalments.

If you have excess concessional contributions reported to us after you have lodged your income tax return, we will amend your income tax return to include the ECC. We will send you an income tax notice of amended assessment, excess concessional contributions determination and fact sheet, and excess concessional contributions election form.

For the years before 1 July 2013, if we identify you have ECC, we will write to you so you can check that the information used in our calculation is correct. If this information is correct, you will be assessed to pay excess contributions tax.

• For the 2011–12 and 2012–13 financial years only, if you have exceeded your concessional (before tax) contributions cap by $10,000 or less, you may receive a once-only offer to have the ECC refunded to you and assessed at your marginal tax rate, rather than pay excess contributions tax. See Offer to have excess concessional contributions refunded for the 2011-12 and 2012-13 years only.

Excess concessional (before-tax) contributions charge

From 1 July 2013, the excess concessional contributions (ECC) charge is applied to the additional income tax liability arising as a result of having ECC included in your income tax return. The intent of the ECC charge is to acknowledge that the tax is collected later than normal income tax. The charge is payable for the year a person makes ECC. If you don’t pay the ECC charge by the due date, general interest charge (GIC) may apply.

The salary sacrificing or “concessional” cap for superannuation is to be increased to $30,000 for the 2014-15 year, up from the current amount of $25,000.

The cap is the limit on how much can be salary sacrificed into super in a financial year and includes the compulsory super paid by employers.

The non-concessional (after tax) cap will increase to $180,000 from July 1, up from the current amount of $150,000. The non-concessional cap is maintained at six times the concessional cap.

For those who meet certain age qualifications the cap has already been raised. Those aged 60 and over in the current financial year have a salary sacrifice cap of $35,000 and this higher cap will be expanded from the 2014-15 financial year to cover everyone over 50.

Salary sacrifice caps include the 9.25 per cent compulsory superannuation guarantee, which the government intends to increase, after a two-year pause at 9.25 per cent (for 2014-15 and 2015-16) after which it progressively increases to 12 per cent by 2021.

Excess contributions tax is levied on contributions in excess of the caps. Excess concessional contributions are automatically included by the Tax Office in an individual’s assessable income. Those who make excess concessional contributions are taxed on the contributions at their marginal income tax rate.