Category Archives: Covid-19 Series

Covid19 NSW Business Relief Summary

Introduction

If your NSW business has been impacted by the Covid-19 “Delta outbreak” and the NSW public health stay-at-home orders (commencing June 2021) there are a range of measures to support you during this lockdown.

The measure available are for:

–  ABN Businesses (or Not for Profits),

–  In NSW,

–  With annualised turnover above at least $30,000 (at 30/6/20), and wages less than $10M,

–  Where the 2020 tax return is complete,

–  And the business has suffered a downturn of at least 30%.

2021 COVID Business Grant

–  One off Grant

–  Available for businesses suffering downturn of

–  30% (receive $7,500)

–  50% ($10,500)

–  70% ($15,000)

–  Comparing the 2-week period 26/6/21 – 17/7/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Business had income between $75K to $50M for FY2020

–  Applications close 13 September 2021

–  Link: https://www.service.nsw.gov.au/transaction/2021-covid-19-business-grant

2021 COVID Jobsaver

–  For businesses with turnover $75K – $250M p.a at 30/6/2020

–  Fortnightly payments (receive min $1,500 per week, MAX $100K p.w)

–  Equivalent to 40% of weekly payroll

–  Available for business suffering downturn of at least 30%

–  By comparing any 2-week period after 26/6/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Business must maintain employee ‘head count’

–  Sole traders eligible for $1,000 p.w

–  Applications close 18 October 2021

–  Link: https://www.service.nsw.gov.au/transaction/jobsaver-payment

2021 COVID Micro business Grant

–  For businesses with turnover $30K – $75K p.a at 30/6/2020

–   Receive $1,500 per fortnight

–  Paid fortnightly

–  Available for business suffering downturn of at least 30%

–  Comparing any 2 week period after 26/6/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Cannot apply for NSW Covid Business or Covid Jobsaver

–  The business must be the owner’s primary income source

–  Link: https://www.service.nsw.gov.au/transaction/2021-covid-19-micro-business-grant

Revenue NSW Payroll Tax Relief

DEFERRAL

–  Ability to defer payments due on 2020-21 Annual reconciliation

–  Interest free

–  Any business paying payroll tax is eligible for deferral

WAIVER

–  Any NSW business with 30% decline in turnover is eligible for a 50% waiver in payroll tax bill

–  Eligible for businesses with wages up to $10M

Revenue NSW Land Tax Relief

–  Land Tax waivers for landowners who can demonstrate they provided Rent relief for tenants in distress;

–  Up to 100% of the Land Tax bill

–  Available until 31 December 2021

Commercial Landlord Hardship Fund

–  Administered by Service NSW

–  Provide grants of up to $3,000 per month to small commercial or retail landowners who suffer hardship due to the changed leasing arrangement with tenants who are financially impacted by COVID-19 in 2021, and have not claimed any land tax relief for rent reductions provided between 1 July 2021 and 31 December 2021

–  Available per eligible property

–  The fund is limited (once the funds are disbursed – the scheme is over)

–  Link : https://www.service.nsw.gov.au/commercial-landlord-hardship-fund-guidelines

JobMaker Hiring Credit

On 6 October 2020 as part of the 2020–21 Budget, the government announced a new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit. The JobMaker Hiring Credit will be administered by the ATO.

The measure is subject to the passing of legislation.

How does it work?

Eligible employers will have access to a JobMaker Hiring Credit for each new job they create over the 12 months from 7 October 2020, for which they hire an eligible employee, for a maximum claim period of 12 months from their employment start date.

Employers will register with the ATO and make claims quarterly, with claims commencing in February 2021.

How much is available?

The JobMaker Hiring Credit will be:

  • $200 per week for each eligible employee aged 16 to 29
  • $100 per week for each eligible employee aged 30 to 35.

An employer cannot claim JobKeeper and JobMaker Hiring Credit at the same time.

Eligibility – Employers
To be eligible, employers must:

  • hold an Australian Business number (ABN)
  • be up-to-date with their tax lodgement obligations
  • be registered for Pay As You Go (PAYG) withholding
  • be reporting through Single touch payroll (STP).

Eligibility – Employees
Eligible employees must have worked an average of at least 20 hours per week over the quarter for the employer to qualify for the payment. Employees that start and/or stop employment during a quarter must meet a similar test based on the length of time in employment.
For the employer to be eligible, new employees must:

  • be aged 16 to 35 years
  • be in receipt of income support payments (such as JobSeeker Payment, Youth Allowance (Other), or Parenting Payment) for at least one of the three months before they were hired.

Further information can be found here: https://www.ato.gov.au/General/New-legislation/The-Australian-Government-s-Economic-Response-to-Coronavirus/

ATO scam calls may soon be a thing of the past

Last year, some 107,000 ATO impersonation scam calls were reported to the authorities. The real number is likely to be much higher, given that most of these type of calls go unreported. Scammers are increasingly using technological advances to appear more legitimate and nab unsuspecting victims.

One technique commonly used is “spoofing”, where scammers use software to mislead the caller ID technology on mobile phones and modern fixed line phones. Rather than transmitting the actual, typically overseas, phone number the call is coming from, the software “overstamps” it with another phone number. Commonly, the numbers used are widely publicised, such as the legitimate numbers used by the ATO.

Tip: The ATO has recently alerted the community to an SMS scam which claims that you’re due to receive a tax refund and asks you to click on a link. The ATO will never send an email or SMS asking people to access online services via a hyperlink.

Due to the prevalence of these scams and the large amount of money lost by individuals, Australian telcos, the ATO and the Australian Communications and Media Authority (ACMA) recently collaborated on a three-month trial of technology to block scam calls appearing to originate from legitimate ATO phone numbers. Under the Scam Technology Project, participating telcos used software to identify calls which had been “overstamped” with specified ATO phone numbers and blocked them.

According to the government, the trial has been “highly successful” in blocking spoof calls from specified ATO numbers. While this blocking technology will not stop scammers randomly ringing Australians pretending to be from the ATO, it will stop specific ATO numbers appearing in the caller ID on the recipient’s phone, making the scam seem less convincing.

Tip: If you receive a call from someone who says they are from a government department, such as the ATO, but you’re not sure whether the call’s legitimate, the best course of action is to hang up and phone back on a widely publicised number from an official website or source.

Additional cash flow boost coming for businesses

If your business is one of many that received the initial cash flow boosts as a part of the government’s COVID-19 economic stimulus measures, prepare for more help coming your way. When you lodge your monthly or quarterly activity statements for June to September 2020, your business will receive additional cash flow boosts.

Generally, the additional amount will be equal to the total amount that you initially received and will be split evenly between the lodged activity statements. Quarterly payers will generally receive 50% of their total initial cash flow boost for each activity statement, while monthly payers will generally receive 25% of their total initial cash flow boost for each activity statement.

However, if you’ve made adjustments or revised your activity statements after lodgment, the amount of additional cash flow boost payments you receive may be different.

Remember, if you haven’t made payments to employees subject to withholding, you need to report zero for PAYG withholding when lodging your activity statements to ensure you receive the additional cash flow boost payments. It’s important that you don’t cancel PAYG withholding registration until you have received the additional cash flow boosts.

Expanded instant asset write-off for businesses

If you’ve purchased assets for your business, remember that you may be eligible to claim an immediate deduction under the instant asset write-off, which was recently expanded.

From 12 March to 30 June 2020 inclusive, the instant asset write-off threshold for each asset increased to $150,000 (up from $30,000) for business entities with aggregated annual turnover of less than $500 million (up from $50 million).

To get it right, remember:

  • check if your business is eligible;
  • both new and secondhand assets can be claimed, as long as each asset costs less than $150,000;
  • assets must be first used or installed ready for use between 12 March and 30 June 2020;
  • a car limit applies for passenger vehicles;
  • if the asset is for business and private use, only the business portion can be claimed;
  • you can claim a deduction for the balance of a small business pool if its value is less than $150,000 at 30 June 2020 (before applying depreciation deductions); and
  • different eligibility criteria and thresholds apply to assets first used or installed ready for use before 12 March 2020.

Don’t jump the gun and lodge too early

Tax time 2020 is here, but it’s likely to be anything but routine. Many individuals on reduced income or have increased deductions may be eager to lodge their income tax returns early to get their hands on a refund. However, the ATO has issued a warning against lodging too early, before all your income information becomes available. It’s important to remember that employers have until the end of July to electronically finalise your income statement, and the same timeframe applies for other information from banks, health funds and government agencies.

For most people, income statements have replaced payment summaries. So, instead of receiving a payment summary from each employer, your income statements will be finalised electronically and the information provided directly to the ATO. Your income statements can be accessed through myGov and the information is automatically included in your tax return if you use myTax.

Tip: Tax agents can also access this information, and we’re here to help you get your return right this year.

Although you may be eager to lodge as soon as possible, the ATO has warned against lodging too early, as much of the information on your income may not be confirmed until later. It’s generally important to wait until income statements are finalised before lodging a tax return to avoid either delays in processing or a tax bill later on. Your income statement will be marked “tax ready” on myGov when it’s finalised, and other information from banks, health funds and government agencies will be automatically inserted into your tax return when it’s ready towards the end of July.

If you still choose to lodge early, the ATO advises carefully reviewing any information that’s pre-filled so you can confirm it’s correct. When lodging early you’ll
also have to formally acknowledge that your employer(s) may later finalise income statements with different amounts, meaning you may need to amend your tax return and additional tax may apply.

Tax return tips

With the great disruptors of the Australian bushfires and the global coronavirus (COVID-19) pandemic, and the associated government economic stimulus measures, there are some key tax-related matters for everyone to be aware of this year.

The ATO has a range of approaches to support taxpayers through tax time 2020, especially where new circumstances mean you might be receiving a different type of income or be able to claim new deductions. The ATO’s Tax Time Essentials page (www.ato.gov.au/taxessentials) provides a one-stop-shop for the things that are a little different this year and how they impact tax returns.

People accessing super early as a part of the COVID-19 early release scheme can rest assured that this money will not form a part of their assessable income. To date, 1.98 million people have withdrawn an average of $7,475 from their super under the scheme.

Another key difference this year is the introduction of the optional simplified method for claiming work from home expense deductions. This method allows you to claim 80 cents for each hour you worked from home from 1 March 2020 to 30 June 2020, to cover all deductible expenses. However, if you were working from home before 1 March 2020 or have documented actual expenses that work out to be more than 80 cents per hour you can still use the usual method to claim expenses related to working from home.

If you were unable to work from home and had to take leave or were temporarily stood down, if your employer made any kind of payment, either regular or one-off, those amounts will need to be declared as wages and salary on your return and tax will apply at your usual marginal rates. This applies regardless of whether the payments are funded by the government JobKeeper scheme.

If you’ve been made redundant or had your employment terminated, any payment you receive may consist of a tax-free portion and a concessionally taxed portion, which means that you could potentially pay less tax.

FBT: cars garaged at employees’ homes during COVID-19

The ATO has published a fact sheet to assist employers in determining if they have an FBT liability where cars are garaged at employees’ homes because of COVID-19.

The fact sheet states that the ATO will accept that an employer isn’t holding a car for the purposes of providing fringe benefits where the car isn’t being driven at all, or is only being driven for maintenance purposes. Provided that the employer elects to use the operating cost method and maintains odometer records, the employer will not have an FBT liability for
a car. Without electing to use the operating cost method or not having odometer records, the statutory formula method applies and an FBT liability will arise as the car garaged at the employee’s home is taken to be available for private use.

Where a home-garaged car is being driven by an employee for business purposes, the ATO says the employer may be able to reduce the taxable value of the car fringe benefit by taking into account the business use, provided the employer has logbook records and odometer records for the period in question. Logbook records will need to be for at least:

  • 12 continuous weeks; or
  • until the car stops being garaged at home, if this is less than 12 weeks.

The fact sheet also provides information on logbook requirements for car fringe benefits and options for employers to consider where COVID-19 has impacted driving patterns.

Loans put on hold and debt forgiveness: ATO’s views

Loans put on hold and debt forgiveness: ATO’s views

The ATO has “clarified” its position on loans put on hold during COVID-19. The ATO will consider a debt to be forgiven for tax purposes if:

  • the debtor is somehow relieved from the legal obligation to repay it; or
  • there is evidence that the creditor won’t insist on repayment or rely on the obligation for repayment.

A debt is not considered to be forgiven if a creditor only postpones an amount payable and the debtor acknowledges the debt – unless there is evidence that the creditor will no longer rely on the obligation for repayment.

The Div 7A implications are specifically spelt out (as a debt forgiven by a private company can be treated as a deemed dividend). For these purposes, a debt is forgiven if a reasonable person would conclude a creditor will not insist on payment or rely on the borrower’s obligation to pay. However, simply allowing more time to repay a debt due to COVID-19 will not result in the debt being treated as forgiven.

PM announces pandemic leave disaster payment for Victoria

Prime Minister Scott Morrison announced on 3 August 2020 a Federal Government “pandemic leave disaster payment”. The payment will be a one-off amount of $1,500, available to workers in Victoria who have no sick leave available who have to self-isolate for 14 days as a result of an instruction by a public health officer.

It will only apply to workers in Victoria, where the Government has declared a “state of disaster” and imposed Stage 4 lockdowns, which are expected at this point to run until mid-September.

The Victorian Government has already announced that it will provide a disaster payment, principally made to those on short-term visas; that is, those who are not permanent residents or citizens of Australia who otherwise wouldn’t have accessed Commonwealth payments. The Federal Government will provide its payment to those who fall outside that scope and who don’t have leave available to them because it has been used up.

Accessing the Federal Government payment

Services Australia has provided further details on its website. It states that, to get this payment, the applicant must:

  • be at least 17 years old;
  • live in Victoria; and
  • have no income from paid work, including sick leave entitlements.

In addition, the Victorian Department of Health and Human Services must also have told the applicant to self-isolate or quarantine. They must have done this because the applicant:

  • has COVID-19;
  • has been in close contact with a person who has COVID-19;
  • cares for a child, aged 16 years and under, who has COVID-19; and/or
  • cares for a child, aged 16 years and under, who has been in close contact with a person who has COVID-19.

If a person has to self-isolate more than once, they can claim this payment each time. However, a person cannot get this payment if they already receive:

  • an income support payment, ABSTUDY Living Allowance, Paid Parental Leave or Dad and Partner Pay;
  • the JobKeeper payment; or
  • the Victorian Coronavirus (COVID-19) Worker Support Payment.

Coronavirus Worker Supplement Payment (Victoria)

The Victorian Government announced its Coronavirus Worker Supplement Payment on 30 July. To be eligible for a one-off $1,500 Coronavirus (COVID-19) Worker Support payment, the claimant must have been instructed by the Department of Health and Human Services:

  • to self-isolate or quarantine at home because they are either diagnosed with coronavirus (COVID-19) or are a close contact of a confirmed case; or
  • that a child aged aged under 16 in the claimant’s care needs to self-isolate or quarantine at home because they are either diagnosed with coronavirus (COVID-19) or are a close contact of a confirmed case.

To receive the payment, the claimant must:

  • be 17 years and over;
  • be currently living in Victoria (including people on Temporary Protection Visas and Temporary Working Visas 457 and 482);
  • be likely to have worked during the period of self-isolation or quarantine and are unable to work as a result of the requirement to stay at home;
  • not be receiving any income, earnings or salary maintenance from work;
  • have exhausted sick leave entitlements, including any special pandemic leave; and
  • not be receiving the JobKeeper payment or other forms of Australian Government income support.

There is no requirement for a claimant to be a citizen or permanent resident to be eligible for the Victorian Government payment.

JobKeeper changes: turnover test and employment start date

Prime Minister Scott Morrison announced further changes to JobKeeper on 7 August 2020. The changes are intended to ensure that eligibility for the revised JobKeeper scheme – to commence on 28 September 2020 – will be based on a single quarter tax period, rather than multiple quarters as previously announced. Employees hired as at 1 July 2020 will now also be eligible to receive JobKeeper.

Treasury has updated its JobKeeper factsheets as at 7 August 2020 to incorporate the PM’s announcements.

The JobKeeper rules implemented in March 2020 in response to the COVID-19 pandemic were due to finish on 27 September 2020. The Government then announced on 21 July 2020 that the scheme would be extended for six months (until 28 March 2021), in an amended form.

The key highlights of JobKeeper Version 2 – to start on 28 September – are that:

  • the extended scheme will apply at a top rate of $1,200 per employee (down from the current $1,500) per JobKeeper fortnight from 28 September 2020 until 3 January 2021, then drop to $1,000 until 28 March 2021;
  • lower rates will apply for part-time and casual employees; and
  • businesses will be required to re-test their eligibility for the payment scheme to access the extension.

Changes to turnover test

The latest changes relate to the eligibility test announced in JobKeeper Version 2.

JobKeeper Version 2 originally required that, from 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper payments would have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements. That is, at that time businesses would have been required to reassess their eligibility for the JobKeeper extension with reference to their actual turnover in the June and September quarters 2020.

The PM has eased the proposed changes to turnover tests for businesses Australia-wide.

The changes mean that businesses will now only be required to show the requisite actual decline in turnover for the September quarter, rather than for both the June and September quarters. Similarly, businesses will only need to demonstrate a decline in turnover for the December 2020 quarter, rather than each of the June, September and December 2020 quarters.

JobKeeper reference date now 1 July 2020

For JobKeeper fortnights beginning on or after 3 August 2020, the reference date for determining certain employee eligibility conditions has been changed from 1 March 2020 to 1 July 2020. The purpose of this change is to extend the scope of JobKeeper so that “it also benefits employers of more recently engaged employees”.

Importantly, the changed rules preserve the existing eligibility of employees for JobKeeper payments; that is, those for whom employers are currently receiving JobKeeper, termed “1 March 2020 employees” because they satisfied the rules as at that date.

As a result, for JobKeeper fortnights beginning on or after 3 August 2020, an individual can be an eligible employee if they:

  • meet the eligibility requirements with reference to the new 1 July 2020 date; or
  • qualify as a 1 March 2020 employee.

Newly eligible employees

The later reference date provides the opportunity for qualifying employers to access JobKeeper for those employees who they engaged after 1 March 2020 and who were in an employment relationship as at 1 July 2020. That is, for new employees engaged after 1 March.

The changes also allow employers to qualify for JobKeeper payments for those employees who do not qualify as 1 March 2020 employees, but became eligible by meeting the conditions under the new 1 July 2020 reference date.

Existing and re-employed employees

The amending rules make no changes to the existing eligibility of employees who are already covered by JobKeeper; that is, those for whom the employer has been receiving the benefit based on their status as at 1 March 2020. In other words, eligible 1 March 2020 employees do not need to retest (and potentially lose) their eligibility for their employer due to the introduction of the 1 July 2020 date, or satisfy any new nomination requirements.

Although employees do not qualify as 1 March 2020 employees if their employment has ceased since 1 March, they may qualify for JobKeeper if they are engaged by another employer as at 1 July 2020. Further, if 1 March 2020 employees are made redundant by an employer and are later re-employed by the same employer (including after 1 July 2020), there is scope for them to qualify without further testing.

Employer obligations

Employers that are already participating in the JobKeeper program are required to give a notice to all employees about the revised JobKeeper reference date, other than:

  • employees to whom the employer has previously given a notice in writing advising that the employer has elected to participate in the JobKeeper scheme;
  • employees who had previous provided the employer with a nomination form in relation to the JobKeeper scheme;
  • individuals who the employer reasonably believes do not satisfy the 1 July 2020 requirements; and
  • employers that are ACNC-registered charities that have elected to disregard certain government and related supplies and the individual’s wages and benefits are funded from such government and related sources.

Further, to be eligible for the JobKeeper payment for any newly eligible employees under the 1 July 2020 reference date, a qualifying employer must provide notice to the ATO of information about that employee and their nomination. Where an employer has provided this notification to the ATO for entitlement to receive JobKeeper payments in respect of the eligible employee, the employer must notify the employee within seven days.

For those employers entering JobKeeper for the first time, the notification requirement will apply to all of their employees.