Financial advisers have until 1 January 2022 to pass the FASEA exam to continue providing financial product advice. There are 3 exam sitting periods left – July, September and November (don’t forget you have to book well in advance to sit the exam).
If an adviser fails the FASEA exam, they can resit but must wait 3 months before resitting under the current rules. This means that the July sitting is the last opportunity for many advisers to have a safety net of one more sitting if they fail.
As part of the new powers provided to the Treasurer (see the Legislation section on the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021), the Government will extend the cut‑off date to 30 September 2022 for advisers who have attempted the exam twice prior to 1 January 2022. A slight reprieve but only if you have failed twice by the end of 2021.
The ATO has announced that taxpayers can apply for an extension of the repayment period where they are unable to make their Division 7A annual minimum repayments by the end of the 2020-21 income year due to the ongoing effects of COVID-19.
The extension can be requested by completing a streamlined online application. As part of this process the ATO will require the borrower to confirm the shortfall amount, that the COVID-19 situation has affected them and that they are unable to pay their Division 7A annual minimum repayment as a result. If the application is approved, the ATO will advise the borrower that they will not be considered to have received an unfranked dividend. This is subject to the shortfall being paid by 30 June 2022.
This is similar to the extension which was made available for minimum repayments that could not be made by the end of the 2019–20 income year. If a taxpayer obtained the extension last year, they must make up the shortfall of the 2019–20 minimum repayment by 30 June 2021. If a taxpayer does not meet this deadline, they will need to either obtain a further extension of time for the 2019-20 minimum repayments outside the streamlined process (i.e., by contacting the ATO) or amend their 2019-20 tax return to include a dividend.
The ATO has indicated that failing to meet the 85% on-time lodgement benchmark for the 2020–21 lodgement year will not cause tax agents to lose access to the lodgement program. While uncommon, it is possible for tax agents who fail to meet the 85% on-time lodgement benchmark to have access to the lodgement program revoked if they repeatedly post poor lodgement results.
The statement is welcome for the many practitioners who are struggling to meet lodgement deadlines due to the impact of COVID-19 and the additional demands imposed in dealing with access to the stimulus measures.
However, the ATO has not provided any blanket lodgement deferral for taxpayers, and it is still necessary to request extensions for your clients if required.
Treasury has released Exposure Draft legislation for consultation looking at the issue of the use of technology in meetings, to execute company documents and send meeting-related materials.
The reforms permanently apply the COVID-19 temporary relief measures.
The Bill provides a statutory mechanism for companies to execute documents electronically. When a company executes a document:
Provisions also allow companies and registered schemes to hold physical and hybrid meetings – wholly virtual meetings are allowed if “expressly required or permitted” by the constitution.
The business portal will be shut down at the end of July 2021 and is basically replaced by the ATO’s ‘Online services for business’ from this date.
Practitioners should be aware that it is possible to apply for a payment-only deferral for eligible tax obligations for their clients, including income tax and FBT.
In order to lodge a payment deferral application there must be exceptional or unforeseen circumstances beyond your client’s control such as natural disasters, serious illness, or legal impediments to payment (see PS LA 2011/14 for guidance).
In lodging the application, tax agents need to provide full details of the client’s exceptional or unforeseen circumstances that prevented them from paying by the due date and the steps taken by the client to mitigate the effects of those circumstances. It is also necessary to demonstrate that the client can make full payment once the circumstances have been resolved and that the client will pay their continuing tax-related liabilities on time once the circumstances are under control.
The application is made by completing the payment deferral application form through Online services for business.
A helpful resource has been added to the ATO website to enable you to check which small business concessions are available for business entities based on their aggregate turnover. At present there are a number of different turnover thresholds for different concessions due to changes made in recent years.
As noted by the ATO, most of the concessions have further eligibility criteria which need to be satisfied, however links to the guidance for each concession are provided.
If you have any queries in relation to the above measure, please do not hesitate to contact Suran, Daniel, Jack, Nathan or myself by calling our direct lines/mobiles, through the switchboard (1300 066 235) or by emailing us.