What’s new 21-22: Important changes for the new financial year

As July 1st approaches, it is vital that business owners and taxpayers alike, are aware of the key changes coming for the new financial year.

As July 1st approaches, it is vital that business owners and taxpayers alike, are aware of the key changes coming for the new financial year. The below information is likely to affect us all, whether we want it to or not, so please do read carefully.

Director Identification Number (DIN) legislation

The new Director Identification Number (DIN) system will see all directors confirming their identity, with a unique identifier for each person who consents to being a director.

This legislation, passed without amendment in June 2020, will be operated by the ATO. Its core purpose is to improve transactional activity between businesses and the government and to increase the accountability of corporations.

A few main points to be aware of:

  1. The DIN system will be rolled out with a vision to create a central Commonwealth Business Registry.
  2. The legislation aims to combat “phoenix activity” where companies are liquidated or abandoned to deliberately dodge debts and/or liabilities.
  3. A DIN will stay with a director throughout their lifetime, even if they cease to be a director in the future.

“A DIN with stay with a director throughout their lifetime, even if they cease to be a director in the future”

Changes in the Superannuation Guarantee Rate

From the 1st of July 2021, the Super Guarantee Rate will rise from 9.5% to 10%.

The upcoming rates changes are as follows:

1st July 202110.00%
1st July 202210.50%
1st July 202311.00%
1st July 202411.50%
1st July 202512.00%

 

When reviewing and planning staffing costs please ensure you include these rate changes as they are going to have a significant impact on the bottom line and cash flow for many small businesses.

By now, if you are an employer, you should be using software to process payroll to ensure you are STP compliant. Your payroll software should automatically update to incorporate the changes however we recommend checking when processing your first pay cycle for 2022 particularly if not using one of the major providers such as Xero, MYOB or QuickBooks.

As part of the 2021–22 federal Budget, the Australian Government announced it will remove the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay (although this measure is not yet law).

Award changes as of July 1st

The Fair Work Commission has announced a 2.5% increase to the national minimum wage. This will also apply to all award wages, with the award increase happening in 3 different stages. The first change is 1 July 2021. For more information CLICK HERE.

“From the 1st of July 2021, the Super Guarantee Rate will rise from 9.5% to 10%.”

ATO is chasing unpaid and late paid super

With the introduction of superannuation clearing houses and Single Touch Payroll (STP), the ATO has increased data matching capabilities and we are seeing the ATO being more pro-active in contacting employers about unpaid super.

What happens if super remains unpaid or you do not pay super or lodge a SGC statement on time:

  • Previously exempt earnings (like overtime) may become subject to SGC
  • Interest accrues until the SGC statement is lodged
  • Part 7 penalty can be as high as 200% of the SGC payable
  • SGC is not tax-deductible
  • Super paid late is not tax-deductible
  • You may be held personally liable for unpaid super & SGC.

This is a significant risk for employers not paying superannuation on time or not at all. Take action now and make sure you are complying with your superannuation obligations.

WorkCover Queensland changes

Get ready to renew your accident insurance policy from the 1st of July, 2021.

If you employ workers in Queensland, it’s time to start preparing to renew your WorkCover accident insurance policy. Find out who you need to cover and what payments to include in your wages declaration. Make sure your contact details with us are up-to-date so you don’t miss our notifications. Also, please be sure to cancel your policy now if you’re no longer employing.

Please CLICK HERE for more information.

Although these are seemingly small changes, we know they can have big consequences on small businesses. If you’re feeling overwhelmed with these changes, or any other aspects of your business accounting, please feel free to get into contact with us. We genuinely care about you and your success, and will do all we can to support you.

Lisa Hooton
Lisa Hooton is the founding director of Nurture Accounting in North Lakes QLD. She has 25 years experience in Public Practice with a passion for Small Business Compliance. Lisa is dedicated to Nurture’s clients and team, always learning, fun and spirited individual. Lisa is a guru in time and workflow managment. She is also an advocate for the development and implementation of automation and cloud systems in small business. Lisa is a supporter of women in small business and an active volunteer in the local community. Lisa lives with her husband of 24 years and 3 amazing daughters in Murrumba Downs QLD. She spends her downtime writing blogs and courses on business administration and management, is an avid gamer and loves a good road trip. BBus (hons). BArts (hons). CPA. MIPA. Registered Tax Agent. Registered ASIC Agent. Xero Certified Advisor and Xero Gold Partner.

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