Print Newsletter

Newsletter July 2005

The Choice of Funds website is www.superchoice.gov.au. This site will be used by the ATO and other Government bodies for communication with individuals, employers and the industry about choice of superannuation fund which commenced on 1 July 2005.

The site is aimed at a general audience and will include topics concerning the choice of funds, financial product advice and general superannuation related matters.  A new Super Choice Info Line has also been established, call 13 28 64.

The ATO has also launched an 'Employers Guide' which provides employers with help about:

• Employee eligibility
• Employer Default Funds
• Completion of Standard Choice Form
• SG Obligations
• Record Keeping
• Potential Penalties

If you need any assistance in relation to employee superannuation choice please contact our office.

For all eligible employees a Choice of Superannuation Funds "Standard Choice Form" needs to be completed by the employer and provided to the employee prior to 29 July 2005.

Please note that there is no requirement for the employee to return the completed form to the employer if they are not making a choice.

The new personal income tax rates apply to all payments made to employees from 1 July 2005.  The new rates apply to all payments made on or after 1 July even if some of the payment related to work performed before this date.
To assist employers to apply the new rates the Tax Office has mailed the new weekly and fortnightly income tax tables to all employers.  These tables are also available from most newsagents.  You can also download the tax tables at:

http://www.ato.gov.au/businesses/pathway.asp?pc=001/003/024/008/001

The Commissioner has issued a determination setting out the thresholds and limits for superannuation amounts for 2005/06, which are summarised below

1. Tax free amounts of bona fide redundancy are $6,491 for the first year plus $3,246 for each year of service;
   
2. Superannuation age-based deduction limits are:
   -$14,603 for employees under 35 years of age
   -$40,560 for employees aged 35 to 49 years
   -$100,587 for employees aged 50 and over
   
3. Lump sum and pension RBLs are $648,946 and $1,297,886 respectively;
   
4. The maximum contribution base for each superannuation 9% guarantee contribution quarter is $33,720.

The ATO has released the long awaited draft booklet on service arrangements.  The booklet is designed to accompany TR 2005/D5 - "Deductibility of Service Fees paid to Associate Service Entities", by providing guidance as to whether the payments made under a service arrangement are commercially realistic and reasonably connected with the business.

The ATO's general approach is to allow a period of 12 months for taxpayers to review their arrangements with the benefit of the guidance provided.  The Commissioner has also clarified high risk cases being those where:

• the service fees paid are over $1 million and represent over 50 per cent of gross fees earned by the professional firm; or
• there are serious questions as to whether the services were in fact provided by the service entity.

The draft booklet is at 
http://www.ato.gov.au/content/downloads/n13086_05_2005.pdf

The ATO has released a Practice Statement providing guidance to individual taxpayers as to generally accepted documentation that may be used to substantiate deductions in the tax return.  The Practice Statement outlines that individuals without a receipt for work-related expenses may still be able to claim a deduction by maintaining other records, which include:

• online banking and credit card statements;
• online, email and photocopied receipts;
• BPay records.