The ATO has begun issuing determinations to people who exceeded their concessional superannuation contributions cap for the 2017–2018 financial year. These determinations will also trigger amended income tax assessments and additional tax liabilities. Individuals can elect for the ATO to withdraw their excess contributions from their super fund to pay any additional personal tax liability.

TIP: Concessional contributions include all employer contributions, such as the 9.5% superannuation guarantee and salary sacrifice contributions, and personal contributions for which a deduction has been claimed.

You have 60 days from receiving an ECC determination to elect to release up to 85% of your excess concessional contributions from your super fund to pay your amended tax bill. Otherwise, you will need to fund the payment using non-superannuation money.

The ATO has released an updated version of Practice Statement PS LA 2001/6, its guidance on calculating and substantiating home office running expenses and electronic device expenses that are claimed as tax deductions.

The basic principles have been amended to emphasise that you must actually incur the expenses you claim, and that there must be a real connection between your use of a home office or device and your income-producing work. On the other hand, the requirement that your income-producing use must be substantial – not merely incidental – has been removed.

There is new information on what type of evidence you need to be keep, and the cents per hour rate you can claim for eligible home office running expenses has increased from 45 cents to 52 cents per hour, effective from 1 July 2018.

The Federal Government intends to make it easier, cheaper and quicker for small businesses to resolve tax disputes with the ATO. It will establish a Small Business Concierge Service within the Australian Small Business and Family Enterprise Ombudsman’s office to provide support and advice about the Administrative Appeals Tribunal (AAT) process to small businesses before they make an application. The government will also create a dedicated Small Business Taxation Division within the AAT.

The end of the FBT year is fast approaching and the ATO has revealed certain areas of concern for employers.

Living-away-from-home allowance (LAFHA)

An allowance to compensate employees living away from home to work, employers are susceptible to claim reductions for ineligible employees, not obtaining the required declarations from employees, and claiming deductions for exemptions (such as invalid accommodation and food components).

Provided motor vehicles

Employers are reportedly not declaring the use of employer-provided motor vehicles on FBT returns, resulting in inconsistent exemption applications and additional compliance costs. A car benefit can be taxable even if the employee has not driven the car – it only has to be available for their private use.

Employee contributions

The ATO has identified that employers are often not able to show the employee’s obligation to make an employee contribution. Without an agreement in place with the employee, employers are unable to offset an existing liability. It has also been reported that employers have been taking advantage of excess employee contributions from one fringe benefit type to offset an FBT obligation relating to another fringe benefit type.