From 28 May 2012, the regulation and administration of business names throughout Australia will shift from the current state and territory based system to a national system regulated by the Australian Securities and Investments Commission.

The new national scheme will introduce a number of efficiencies into the business name regime in Australia, including:

• one register and registration process — with registration of new business names taking effect Australia-wide; and
• easing the administrative burden of registering and maintaining many registrations for one name.
• to address the confusion caused under the current system that allows identical, or nearly identical, names to be registered in various states and territories. The new system will prevent identical, or nearly identical, business names from being registered.

What happens with current business name registrations?

One state or territory If you currently have a business name registered in a state or territory, then you will not be required to register it again with ASIC. Instead, ASIC will automatically transfer all current business names registered in any state or territory to the national register. The registration details from the previously registered business name, including the principal place of business and expiry date, will be transferred to the new register.

More than one state or territory If you have a business name registered in more than one state or territory, then each of those registrations will be transferred to the new register. You may then decide:

• to retain all the registrations, or:
• to keep one business name registration (for example, the one with the latest expiry date) and to cancel the others.

However, ASIC has said[1] that if it is able to reliably determine that the business names are identical and registered to the same holder then it may act on its own to combine multiple identical registrations.

Identical business names in different jurisdictions owned by different people When the business names are transferred to the new register, there may be two or more identical or nearly identical business names registered in different states or territories to different people. To reduce confusion, ASIC has said that it will provide additional information on the new register to assist people to differentiate between identical, or nearly identical, business names – for example:

• the state or territory in which the business name was registered; or
• the former state or territory business name registration number.

If these identifiers are not sufficient to reduce confusion, then ASIC may add a distinguishing word as an additional identifier – for example, the name of the relevant state or territory. Although this identifier will not form part of the business name, it will help people distinguish between identical registered business names. ASIC will notify the people who own the relevant business names before making any changes.

• expanding the director penalty regime to superannuation guarantee (SG) amounts
• ensuring that directors cannot have their director penalties remitted by placing their company into administration or liquidation when unpaid pay-as-you-go (PAYG) withholding or SG amounts remain unpaid three months after the due dates
• restricting access to PAYG withholding credits for company directors and their associates where the company has failed to pay withheld amounts to the Commissioner of Taxation

In Germany, Ireland and the UK losses can be carried back to the previous year. The Canada and France have allowed three year carry back in recent years.

Mr Swan said

It may make sense for Australia to have a carry back period within this range. Perhaps with a cap, like many of these countries, to protect the integrity of the tax system.

The business tax working group will deliver its report on the tax treatment of losses in the next two weeks.

• $1.26 billion in tax liabilities raised; $287.44 million in tax collected
• 65 people charged with serious offences
• 22 people convicted of serious offences
• $105.25 million in assets restrained
• $307.6 million gathered in improved voluntary compliance

There are also 12 criminal investigations currently in progress.

Data matching is one of the main indicators the ATO uses to detect businesses participating in the cash economy.

How the ATO collects the data

The ATO has obtained details of individuals or businesses that hold a trade account with purchases between $10,000 and $3 million in the 2009-10 financial year from a major Australian warehouse chain.

How the ATO uses the data

Building industry data is being used to pilot the approach of using supplier data to identify businesses in the building industry who use cash transactions to avoid their tax obligations or who fail to report some or all cash transactions.

The data is used to identify:

• individuals and businesses that may be running a part of their normal business activities off the books or operating underground by avoiding their obligations to register and lodge returns, particularly in relation to transactions between consumers and business
• risks and trends of non-compliant behaviour by individuals and businesses that operate in the building services industry.

Where they identify taxpayers that appear to have not declared all, or part, of their income the ATO will either:

• write to them asking them to explain the inconsistency and offering them the opportunity to make a voluntary disclosure
• contact them directly through our audit area.

In cases where individuals or businesses fail to comply with their obligations – even after being reminded of them – other actions may be appropriate, including default assessments of tax liabilities.

The Australian Government has now released draft amendments to disallow deductions against taxable government assistance payments that are eligible for a rebatable benefit following the High Court’s decision in FCT v Anstis [2010] HCA 40.

Government assistance payments that are currently eligible for the beneficiary rebate include, but are not limited to:

• Austudy
• ABSTUDY
• Newstart Allowance
• Youth Allowance (student)
• Youth Allowance (jobseeker)

The amendment is proposed to have effect from 1 July 2011.

• replacing the integrity rules restricting access to losses
• allowing immediate loss refundability
• allowing losses to be carried back and offset against previous years’ profits
• allowing losses carried forward to be uplifted by a determined benchmark rate.

The Interim Report says the bias derives from the way Australia allows for tax deductions of losses, which it says can become “trapped” and unavailable as a tax relief vehicle for entrepreneurs. “In some regards,” the Interim report says, “trapped losses represent a windfall gain for governments.” Current treatment of losses also makes cashflow management cumbersome.

The final report on the tax treatment of losses is expected in March 2012.

Superannuation changes

• The Government will pause the indexation of the superannuation concessional contributions caps for one year in 2013-14.
• In response to industry feedback, the Assistant Treasurer said the Government would undertake further consultation on compliance cost issues raised by industry in relation to the higher concessional contributions cap for those aged 50 and over.
• The Government will streamline the low income superannuation contribution (LISC) so that individuals automatically benefit from it without being burdened with extra paperwork. Rather than requiring eligible workers to fill out a tax return or other type of form, the ATO will verify an individual’s income using available data.
  • Individuals who receive less than 10% of their income through employment or business will not be eligible.
  • Individuals will only receive a payment if their LISC entitlement is at least $20, to reduce administration costs.
• The Government will reduce the matching rate and maximum payment of the voluntary superannuation co-contribution from 1 July 2012, when the new LISC commences. [No details were given of these reductions.]
• The Government will extend to the 2012-13 year the current drawdown relief for minimum payment amounts for account-based, allocated and market linked pensions. [This means the minimum drawdown for these pensions will be 75% of the required amount for the 2011-12 and 2012-13 years ie a 25% reduction in the minimum drawdown amounts.] Regulations giving effect to this change will be made before the new financial year.

Source: Treasurer’s press release Nos 148 and 149; Assistant Treasurer’s press release Nos 160 and 162, 29 November 2011