ATO Announcements Friday March 27

In light of recent ATO and Government updates I thought it necessary and hopefully helpful to keep you updated.

First off, the Government has enacted legislation surrounding the economic response to help with the impact of the virus. The ATO is all over this and has set up a ‘one stop shop’ for all things COVID-19. You can view this here: https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/

The website covers all topics from giving individuals early access to their superannuation, reducing the superannuation minimum drawdowns, the instant asset write off and of course the cash flow assistance to employers.

I have summarised the help available below as well as created a flyer, which I have attached to outline the federal and state assistance for employers;

Individuals

If you have lost your job and want to apply for the new ‘Jobseeker Payments’ make sure you get a separation certificate from your employer ASAP and check out this link for eligibility https://www.servicesaustralia.gov.au/individuals/services/centrelink/jobseeker-payment/who-can-get-it or call Centrelink on 13 28 50. Please note that there are a large number of people calling but this is safer than attending their offices at the moment.

If you are:

• Unemployed

• Made redundant

• Have had your working hours reduced by 20% or more

• Eligible for jobseeker/youth allowance and or parenting payments

Then you are entitled to withdraw up to $10,000 of your superannuation, tax free from mid April and before 30 June 2020. Another payment of $10,000 will also be available after 1 July until 24 September 2020. I believe this is going to be made available via the ATO MyGov App.

You may also be eligible to withdraw superannuation on compassionate grounds due to medical treatment, palliative care, home loan payment or council rate payment so that you do not lose your home, accommodating a disability or expenses relating to a death or funeral of a dependant. This however will not be administered by the ATO and you will need to contact your super provider.

Fair work have also updated their website to update all Australians on the workplace laws: https://coronavirus.fairwork.gov.au/

To assist, I have also linked to the ATO ‘Working From Home Flyer’ as I know a lot of you are now working from home and will need to keep appropriate notes come tax time.

Sole Traders

As mentioned above, sole traders are able to access the $10,000 withdrawal from their superannuation fund as well as the additional $10,000 between 1 July and 24 September 2020 provided their work was either suspended or there was a reduction of 20% to their turnover.

Businesses (Sole Traders/Company/Trust’s)

If an Australian Business was an active business paying wages to workers and registered for PAYGW (whether you withheld tax or not) at 12 March 2020 then you may be eligible for the cashflow boost of between $20,000 to $100,000. This will be rolled out on lodgement of the March 2020 BAS. Additional requirements have also been released, and they are that you MUST have lodged either your 2019 Income Tax Return OR have lodged a BAS since 1 July 2018 on March 12 2020.

There are certain integrity measures to ensure that people are not taking advantage of the cashflow boost or benefit from the cashflow boost unfairly. The ATO’s stance on schemes in relation to cash boosts are:

“This may include restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.

Any sudden changes to the characterisation of payments made may cause us to investigate whether the payments are in fact wages. If the payments are wages, we may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may also have FBT obligations that have not yet been met”

So, what does that mean?

Unjustified pay rises are out and employing all your contractors from March, is out.

Small & Medium Business Loans

The Coronavirus SME Guarantee Scheme will provide support for these businesses. Under the Scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.

SMEs with a turnover of up to $50 million will be eligible to receive these loans. The Government will provide eligible lenders with a guarantee for loans with the following terms:

• Maximum total size of loans of $250,000 per borrower.

• The loans will be up to three years, with an initial six month repayment holiday.

• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

What else can businesses do?

• Defer payments dates of amounts due by up to 6 months. How? – Call the ATO on 1800 806 218 or ask me

• Vary their PAYGI amounts to nil for the March 2020 quarter as well as apply for a variation of the September 2019 and December 2019 PAYG Installments

• Remit any interest or penalties incurred after Jan 23 that have been applied to your tax liabilities

• Arrange payment plans with the ATO

• Call any of your lenders for plant and equipment finance or business loans – they may be able to put you on a repayment holidays for up to 6 months. Be sure to read the fine-print.

• Continue to meet your super payments for employees – this is absolutely necessary as there is no relief for Superannuation Guarantee!

Banned activities and businesses from Midnight tonight

• Food courts and shopping centres (takeaway still allowed)

• Café and Restaurants  (takeaway still allowed)

• Auction houses, real estate auctions and open house inspections

• Outdoor and indoor markets (excluding food markets) to be addressed by states and territories

• Beauty therapies

• Tanning, waxing and nail salons

• Tattoo parlours

• Massage parlours

• Amusement parks and arcades

• Play centres

• Nightclubs

• Cinemas

• Casinos, gaming or gambling venues

• Places of worship

• Real estate auctions and open for inspections

• Gyms, community and recreational centres, health clubs and fitness centres

• Yoga, barre and spin classes Saunas and wellness centres

• Public swimming pools

• Boot camps and personal training limited to 10 people maximum

• Weddings limited to no more than five people (including celebrant and witnesses)

• Funerals limited to no more than 10 people

• Family gatherings such as barbecues, birthdays and house parties not allowed

Should you need assistance in setting up a MyGov Account, the ATO have instructions at: https://www.ato.gov.au/Business/Single-Touch-Payroll/Single-Touch-Payroll-for-employees/Setting-up-your-myGov-account/ once you have logged in, there you can lodge an intention to claim.

As always, if you have any problems or queries, please do not hesitate to contact me on 03 9762 6652. Or subscribe here to get updates as they are announced.