By Moore Stephens

A free (and optional) super clearing house service is now available to small businesses with less than 20 employees to help them meet their super guarantee obligations.

The Small Business Superannuation Clearing House is administered by Medicare Australia and lets employers pay their super contributions to a single location in one simple electronic transaction.

Small businesses that register to use the service will have their super guarantee obligation discharged, as long as all of the following apply:

  • they pay the correct amount;
  • they pay by the super payment cut-off date;
  • the payment is accepted by the clearing house; and
  • the payment is not rejected by the super fund.

Employers who receive an employee's choice of fund nomination will have their choice obligation discharged if they pass the information to the clearing house within 21 days of receiving the choice of fund nomination.

Small businesses can register online for the service by:

  • visiting the Medicare website at www.medicareaustralia.gov.au/super; or
  • phoning Medicare Australia on 1300 660 048.

The Tax Office, the cash economy and benchmarks

One of the Tax Office's new weapons against the cash economy is its industry benchmarks.

These benchmarks set out the expected income and expenses of small, medium and large businesses, most of which operate in the cash economy. The ATO now has over 100 benchmarks and this year is ramping up its attack against the cash economy by issuing about 100,000 letters.

The letters basically question why the figures returned by taxpayers in their income tax returns do not fit the industry average.

The ATO expects that after the 100,000 questionnaires are issued, about 3,000 – 4,000 audits will be conducted.

Editor: Should you receive any queries from the Tax Office on benchmarks or any other matter, please contact our office immediately.

Use of assets in private companies

The Tax Office has advised that from 1 July 2009 (i.e., from the 2009/10 financial year just passed), where an asset is provided for the use of a private company shareholder (or associate), it will generally be treated as a 'payment' if the company provides them for:

  • free; or
  • less than their market value.

Example

Marina is a shareholder of a private company that owns a city apartment. The apartment is generally available for rent.

However, Marina asks the company not to rent the apartment out for a week so that she and her family can use it (for free) over a long weekend. Marina's use of the apartment is a 'payment' for the purposes of the deemed dividend rules.

The amount of any deemed dividend will be the amount the company normally charges for one week's rent.

Editor: There are a number of exceptions to these rules so please contact our office if you would like to know more about the operation of these new rules or the exceptions.

This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2009 Moore Stephens Australia Pty Limited. All rights reserved.