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State Government Response

Tax Payments

The JobKeeper Package


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Stimulus for Businesses

As of March 30, businesses can access a variety of assistance options. The Government will provide up to $100,000 to eligible small & medium-sized businesses and not-for-profits – only those with aggregated annual turnover under $50 million and which employ workers may be eligible. Employers will receive up to 100% of wages withheld. The instant asset write-off has increased from $30,000 to $150,000, and has expanded to include businesses with aggregated annual turnover under $500 million. The Government also introduced a 15-month investment incentive for these businesses. They’ll be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. Businesses with trainees or apprentices can apply for a subsidy of 50% of their wages for nine months – from January 1 to September 30. More information can be found on the ATO website.

UPCOMING KEY DATES

April

21 April
Lodge and pay quarter 3, 2019–20 PAYG instalment activity statement for head companies of consolidated groups.
Lodge and pay March 2020 monthly business activity statement.

28 April
Lodge and pay quarter 3, 2019–20 activity statement if electing to receive and lodge by paper and not an active STP reporter.
Pay quarter 3, 2019–20 instalment notice (form R, S or T). Lodge the notice only if you are varying the instalment amount.
Make super guarantee contributions for quarter 3, 2019–20 to the funds by this date.

Employers who do not pay minimum super contributions for quarter 3 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly (NAT 9599) by 28 May 2020.

30 April
Lodge TFN report for closely held trusts if any beneficiary quoted their TFN to a trustee in quarter 3, 2019–20.
Lodge lost members report for the period 1 July 2019 to 31 December 2019.

May

15 May
Lodge 2019 tax returns for all entities that did not have to lodge earlier (including all remaining consolidated groups), and are not eligible for the 5 June concession.

Due date for companies and super funds to pay if required.

21 May
Lodge and pay April 2020 monthly business activity statement.
Final date to add new FBT clients to your client list to ensure they receive the lodgment and payment concessions for their fringe benefits tax returns.

Lodge and pay Fringe benefits tax annual return if lodging by paper.

26 May
Lodge and pay eligible quarter 3, 2019–20 activity statements if you or your client have elected to receive and lodge electronically.

28 May
Pay Fringe benefits tax annual return if lodging electronically.
Lodge and pay quarter 3, 2019–20 Superannuation guarantee charge statement - quarterly (NAT 9599) if the employer did not pay enough contributions on time.

Employers who lodge a Superannuation guarantee charge statement - quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They still have to pay the remaining super guarantee charge.

Support for Individuals

The Government has temporarily expanded eligibility to income support payments. Both existing and new recipients of JobSeeker payments, Youth Allowance JobSeeker, Parenting, Farm Household Allowance and Special Benefits will receive a new Coronavirus supplement at a rate of $550 per fortnight. Social security, veterans, and other income support recipients will get two separate $750 payments – the first from March 31, and the second from July 13. The Government will also allow affected individuals to access their superannuation accounts early, and tax-free. Individuals can withdraw up to $10,000 in 2019-20 and in 2020-21. The Government will also temporarily reduce superannuation minimum drawdown rates, and reduce social security deeming rates.

The JobKeeper Package

Businesses significantly impacted by the Coronavirus will have access to the $130 billion JobKeeper payment package. JobKeeper will ensure employers and their workforce stay connected and business restarts quickly after the crisis. Businesses and not-for-profits will receive $1,500 minimum per fortnight to pay employees for up to six months. Employers are eligible if their turnover of less than $1 billion has fallen by more than 30%, or over $1 billion turnover falls by more than 50%. The first payments will be received in May – businesses can register their interest in the program on the ATO website.

Flow of Credit

The Coronavirus Small and Medium Enterprise Guarantee Scheme provides a guarantee of 50% to Small and Medium Enterprise (SME) lenders to support new short-term unsecured loans to SMEs. The scheme guarantees up to $40 billion of new lending. Small businesses will be able to access credit quickly through a temporary exemption from responsible lending obligations, for lenders providing credit to existing small business customers. The Reserve Bank of Australia announced a package to put downward pressure on borrowing costs for households and businesses. Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25%, through a term funding facility. This will reinforce the benefits of a low cash rate by reducing funding costs for banks, which in turn will help reduce interest rates for borrowers. The Government is also providing the Australian Office of Financial Management with $15 billion to invest in structured finance markets used by smaller lenders. The Australian Prudential Regulation Authority has announced temporary changes to its expectations regarding bank capital ratios. This will support banks’ lending to customers, particularly if they take advantage of the new funding facility being offered by the RBA.

Contractor or Employee?

The difference between a contractor and an employee is not always clear cut. The courts and tax office take a number of factors into account when determining the actual status, such as hours worked, superannuation, method of payment and leave to name a few. Any written agreement stating the nature of the relationship is certainly relevant, but it’s not conclusive, and should not be relied solely upon. Both employers and contractors need to be fully aware of their situation as serious penalties are involved with sham contracting arrangements. Find out more here.

"Holiday home" included in tax concession test

A taxpayer company has been unsuccessful before the Administrative Appeals Tribunal (AAT) in a claim to secure the capital gains tax (CGT) concessions for small businesses.

In this case, the AAT affirmed the Commissioner's decision that the taxpayer did not satisfy the "maximum net asset value" test for the purposes of qualifying for the concessions. The AAT found that the individual who controlled the company could not exclude from the test his interest in a Queensland property, which he claimed was used for "personal use and enjoyment".

TIP: The small business CGT concessions are intended to offer small business taxpayers a range of unique tax concessions. However, despite being targeted towards taxpayers who typically have less complicated affairs, the rules are riddled with complexities that may not appear obvious at first glance.

Each concession has its own particular rules. However, there are two basic conditions for the relief - either the taxpayer is a small business entity (SBE) or is a partner of a partnership that is an SBE, or the taxpayer satisfies the maximum net asset value test. If you have any questions, please contact our office.

Small business benchmarks catch out florist

The AAT has recently dismissed an appeal by a florist against the Tax Commissioner's decision to issue income tax and GST assessments following an ATO audit of her florist business.

The taxpayer had reported that the cost of goods sold in her business represented 83% of her reported business income. The ATO had selected the taxpayer for audit because this figure was outside what it considered to be the industry benchmark range of between 44% and 54%.

In this case, the taxpayer was unable, due to a lack of evidence, to prove to the AAT that the assessments were excessive.

TIP: The Tax Commissioner has warned that businesses operating outside the relevant benchmarks could be subject to ATO review and/or audit, and where the businesses do not have adequate records to substantiate their performance, the ATO will make a default assessment using the appropriate small business benchmark.

Businesses may want to consider reviewing their record-keeping practices and assess whether they are at risk of an audit. Please contact our office for further information.

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Disclaimer: This is not advice. Information provided in this bulletin may be in the form of summaries and generalisations - it may omit detail that could be significant in a particular context or to your personal circumstances. You should not act solely on the basis of material contained in this bulletin. Before you start any transactions, you should obtain appropriate professional advice relevant to your particular circumstances. Links to third-party websites are inserted for your convenience, but do not constitute endorsement of material at those sites or any associated product or service. Changes in legislation may occur quickly and we therefore recommend that our formal advice be sought before acting in any of the areas. The information in this bulletin is provided on the basis that all persons accessing the bulletin undertake responsibility for assessing the relevance and accuracy of its content.

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