On 27 July 2022, the Government introduced the Treasury Laws Amendment (Electric Car Discount) Bill 2022 into Parliament.

This Bill implements the Government’s plan to remove fringe benefits tax (FBT) to make electric cars (aka ZEVs – Zero and Low Emission Vehicles) cheaper so that more families who want them can afford them.

The legislation will amend the Fringe Benefits Tax Assessment Act 1986 to exempt from FBT the use of eligible ZEVs made available by employers to employees.

This FBT exemption will apply to battery electric cars, hydrogen fuel cell electric cars and plug‑in hybrid electric cars. (Sorry Toyota Hybrid owners!)

The exemption will be available for eligible electric cars with a first retail price below the luxury car tax threshold for fuel efficient cars ($84,916 for 2022‑23) first made available for use on or after 1 July 2022.

Interestingly, car benefits that are exempt from FBT under this exemption will continue to be included in an employee’s individual fringe benefits amounts for the purpose of determining the employee’s reportable fringe benefits amount (RFBA). This is achieved by proposing to amend section 135P of the FBTAA. This is the first time a specific measure has been introduced to treat an exempt benefit as still being a reportable fringe benefit. Presumably, this is aimed at preventing ZEVs from being used to reduce income-tested benefits and payments.

We eagerly await the draft Bill’s receipt of Royal Assent and will let you know when the legislation FBTAA has passed.

Remember, you can reach out to your Halletts adviser anytime if you have questions in relation to the purchase or salary packaging of your Electric Vehicle.

For more information:  https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/electric-car-discount-bill-introduced-parliament?utm_source=miragenews&utm_medium=miragenews&utm_campaign=news

Key responsibilities of company directors

When you make a business decision as a company director, you must, amongst other things, ensure that you:

    • make the decision in good faith and for a proper purpose
    • do not have a material personal interest in the decision and make it in the best interests of the company
    • find out and assess how any decision will affect your company’s business performance, especially if it involves a lot of the company’s money or could have a material impact on the company’s reputation
    • keep informed about your company’s financial position and performance, ensuring your company can pay its debts on time
    • get trusted professional advice when you need assistance to make an informed decision
    • make full and frank disclosure about any material personal interests you do have

Management of Company assets, debts, employees, and investments

As a company director it is important you understand that:

    • the company owns the assets so you cannot treat company property, assets or funds, as if they are your own.
    • the company is generally responsible for paying debts incurred by the company, which may include trade creditors, employees and statutory bodies such as the Australian Taxation Office. If there are grounds for suspecting that the company is insolvent, you must not trade, incur debt, or continue to conduct business as usual. Instead, you should immediately seek trusted professional business advice.
    • any money invested in the company (e.g. through loans to the company or by owners or investors buying shares in the company) belongs to the company and must be used for a proper company purpose.
    • the owners or shareholders of the company are entitled to take a dividend payment (e.g. money) from the company, but only after the company has ensured it has the ability to pay its debts owing to trade creditors and other types of creditors who have lent money to the company, employees and statutory authorities.
    • while a company is usually responsible for paying its debts, a director may become personally liable. This generally occurs when a director breaches their legal obligations (e.g. the company continues to trade while it is insolvent).

If your company has employees, you should find out if there are any Pay As You Go (PAYG) withholding or Superannuation Guarantee Charge (SGC) amounts owed to the Australian Taxation Office (ATO) by the company.

If you fail to meet a PAYG withholding or SGC liability by the due date, you may become personally liable for a penalty equal to the unpaid amount under the ATO’s Director Penalty Regime.

Remember, you can reach out to your Halletts adviser anytime if you have questions in relation to being a company director.

More information available at: https://asic.gov.au/for-business/small-business/starting-a-company/small-business-company-directors/

Jim Chalmer’s first Budget was handed down last night and, while we waited for news of a raft of tax changes that would keep accountants and lawyers gainfully employed for years to come, we were saddened to find there were very few, if any, tax measures announced. So, scrolling through the plethora of Budget summaries that we (and probably you) have received, here’s our take on a few items of interest: Keeping Shtum on the Stage 3 tax cuts No mention means they are probably here to stay, which is good news, but only for those who would like to pay less personal tax from 1 July 2024 than they currently are…   Parents Paid parental scheme changes:
    • From 1 July 2023, either parent will be able to claim.
    • Will be expanded by 2 additional weeks a year from 1 July 2024 until it reaches 26 weeks from 1 July 2026.
    • The maximum childcare subsidy rate for all families earning less than $530,000 (!) in household income will be increased.
    • The current higher childcare subsidy rates for families with multiple children aged 5 or under in child care will be maintained.
    • Can earn an additional $4,000 in 2022-23 before their pension is reduced (from $7,800 to $11,800).
    • Will be able to earn more (up to $90,000 for singles or $144,000 combined for couples) and still qualify for the Commonwealth Seniors Health Card.
  Supporting pensioners who want to work or work more hours, to do so.     Downsizer super contribution eligibility age to be lowered to 55 (from 60) – less house more super     Energy Grants for small and medium sized enterprises The Government will provide funding to support small to medium enterprises to fund energy efficient upgrades, supporting studies, planning, equipment and facility upgrades that will improve energy efficiency, reduce emissions or improve the management of power demand.  $62.6M allocated over 3 years (which is about one each of these for each of the 2.35 million small businesses)     More money to ATO to target taxpayer compliance and international tax
  • Increased penalty unit from $222 to $275 per unit from 1 January 2023
  • Personal Income tax Compliance Program (‘PITCP’!) to extended a further 2 years to 30 June 2025 (targetting over-claiming of deductions and incorrect reporting of income)
  • Shadow economy compliance program and ATO tax avoidance taskforce extended to 30 June 2026
  • Tax Practitioners Board to be given more money to investigate tax advisers
  Deductible Gift Recipients (DGRs) Autralians for Indigenours Constitutional Recognition will be specifically listed as a DGR for donations made from 1 July 2022 to 30 June 2025.     Struggling to find much else, but…   Australia has signed a new international tax treaty with Iceland, so here is a beautiful photo of Reykjavik for your viewing pleasure… Please feel free to contact us if you need anything or have any queries. With love and gratitude from the Halletts Team 😊