Tax News & Tips

This week we have some information for you on renewing your ATO Business Portal Authorisation and some important information on Depreciation and Immediate Deductions.

ATO Business Portals: Renewing your Business Authorisation

The use of the Business Portal has become a normal daily activity for many lodging Business Activity Statements and Single Touch Payroll obligations. In setting up the Business Portal, it was necessary to establish a Relationship Authorisation Manager to control who can view, edit and manage a business’s transactions with the ATO.

If you're listed as a primary person in Relationship Authorisation Manager (RAM), your business authorisation is valid for up to 12 months and needs to be renewed. Before it expires, the ATO will send reminder emails to the email address you used to link the business and notifications will appear in RAM.

You should renew your authorisation before it expires to continue accessing government online services or managing authorisations for the business. You can renew an individual or multiple business authorisations at once when you see the notification in RAM from 40 days before expiry.

Your renewal does not affect authorisations you've set up for others, such as authorisation administrators and authorised users. They can continue to access government online services on behalf of the business.

Depreciation and Immediate Deductions

We are currently operating under the business taxation rules where most taxpayers are able to claim an immediate deduction for the purchase of depreciable assets until 30th June 2022.

There are a few issues to be aware of:

  • The immediate deduction for passenger carrying vehicles e.g. Landcruiser Wagon, Prado is limited to the business portion of the car limit. The car limit for the 2021 financial year is $59,136. There is no provision for the excess cost above the car limit to be claimed under any other depreciation rules.

  • Please note that a passenger carrying vehicle is considered to be any passenger vehicle designed to carry a load less than one tonne and fewer than 9 passengers.

  • Upon determining the business use of a Passenger carrying vehicle, the maximum income tax deduction and GST entitlement is a percentage of the Car limit, not the full value. For example a Toyota Landcruiser costing $95,000 has a business use of 75%. The maximum claim that can be made for this vehicle is:

    • $4,032.00 GST Credit Entitlements (($59,136 / 11) *75% )

    • $41,328 Income Tax Deduction under the immediate write off provisions (($59,136-4032)* 75%)

  • The asset must be held ready for use before the tax deduction can be claimed. So for items delivered after 30th June 2021, you will not be able to claim a depreciation deduction until the next financial year.

  • If you purchase the asset in one entity and hire it to another entity, different rules apply.

The rules get very complicated, so please check with our office before you make the acquisition.

Please note that alternative concessions and rules will apply for Primary production assets; e.g. fencing, water storage & conveyance and fodder storage which generally, are immediately deductible on acquisition for new assets. As with all tax matters, there are “some twists and turns” so please check with our office before you buy.

Dominique Schuh