Advice from business leaders and industry experts
Australian Taxation Office | 18 June 2020
We all know that many businesses and communities are being heavily affected by the challenging economic conditions created by the coronavirus (COVID-19) pandemic.
The ATO is working shoulder-to-shoulder with businesses to assist them through this difficult period and ease the pressure.
The ATO encourages businesses impacted by coronavirus (COVID-19) to get in touch to discuss relief options. The ATO website is updated with essential information for employers about tax and super changes that have now become law following the passage of the Government’s Economic Support Package through the Parliament. Additional support is also available to employers to help keep on top of obligations for tax and super.
Here are all of the ATO’s initiatives you should know about.
Enrolments are open for the JobKeeper Payment, which provides a wage subsidy to businesses that are significantly affected by coronavirus (COVID-19).
The JobKeeper payment ensures eligible employers remain connected to their workforce and will help businesses restart quickly when the crisis is over.
Before you start with your enrolment, here is what you should do:
Within seven days of enrolling for JobKeeper, provide all your relevant employees with the Employee Nomination notice. Once they complete this form and return it to you, your employees will be eligible and you can claim reimbursement of wages paid to those employees (where they have been paid a minimum of $1500 before tax per JobKeeper fortnight).
If you meet the eligibility criteria for the JobKeeper payment, you can enrol, identify your eligible employee and make a monthly business declaration for the JobKeeper payment through:
Reporting through STP may support your JobKeeper payment application and help you meet your monthly reporting requirements for the subsidy. STP reporting enables eligible employers to notify of their eligible employees, their eligibility start and finish periods, and the amounts those employees have been paid, including any JobKeeper top-up. Read more in the ATO’s JobKeeper guides or JobKeeper page.
To help during the economic downturn associated with coronavirus (COVID-19), eligible businesses that employ staff will receive tax-free cash flow boosts totalling between $20,000 and $100,000.
The cash flow boosts will be delivered as credits in the activity statement system when you lodge your activity statements up to the month or quarter of September 2020.
The initial boost is automatically applied when you lodge your activity statements for the March to June 2020 monthly or quarterly periods and will generally be equivalent to the amount you withheld from wages paid to employees (PAYGW). If you received initial cash flow boosts, you will receive additional cash flow boosts when you lodge your activity statements for each monthly or quarterly period from June to September 2020.
You don’t need to apply for the cash flow boost. All you need to do is lodge your upcoming activity statements and if you are eligible, the relevant cash flow boost amounts will be credited to your account.
The cash flow boost credit will first be used to reduce amounts owing from the same activity statement e.g. PAYGW and GST payable. If your PAYG and GST payable are less than the cash flow boost, the remaining credit will be refunded, generally within 14 days, rather than offset against any existing tax debts employers have.
The ATO website can help you determine if you’re eligible, and provides a variety of examples where a business may not fall within the general eligibility criteria and still be entitled to the cash flow boost. You can also check out the Eligibility companion guide for an overview of how eligibility is determined.
Find out more about eligibility, timing of lodgement, accessing the credits and what you can expect to receive on the ATO’s cash flow boost page.
If you stand down employees you are not required to make payments to the employee for the period of stand down. Generally, as salary and wages are not paid during the stand down period there are no pay as you go withholding (PAYGW) or superannuation guarantee (SG) obligations payable.
If you do pay monies to your employee during the stand down period these will be connected with their employment and as such PAYGW and SG will be payable subject to the usual rules.
If you won’t be paying employees for some time, you can let the ATO know that you no longer have a need to report via the Business Portal, phoning 13 28 66. Alternatively, your registered tax or BAS agent can contact the ATO.
Although some tax affairs can wait, as an employer you still need to meet your SG obligations for your employees.
By law, the ATO can’t vary the contribution due date, or the Superannuation Guarantee Charge (SGC) payable where contributions to your employee’s super fund are late or unpaid.
If you can’t pay in full by the quarterly due date, pay as much as you can as this will reduce the SGC. If you miss the due date or were unable to pay in full, you will need to lodge an SGC statement with the ATO. By lodging an SGC statement within a month of the quarterly due date, you will avoid additional penalties. If you can’t pay in full, the ATO will work with you to set up a payment plan.
You can find out more on the ATO’s missed or late SG payments page.
The superannuation guarantee amnesty is an opportunity to bring your SG obligations up to date without being charged the administration component or penalties. It applies to quarters between 1 July 1992 and 31 March 2018.
To access the amnesty, you will need to apply by 11.59pm 7 September 2020 and any payments you make before this date can be claimed as a tax deduction.
You may wish to apply for the amnesty but are concerned that, as a result of coronavirus (COVID-19), your circumstances may change and you will not be able to pay the liability. The law does not allow the ATO to extend the amnesty period beyond 7 September. However, they will work with you to establish a payment plan that is flexible to help you to continue making payments.
If you already lodged an SGC Statement between 24 May 2018 and 6 March 2020, you’ll automatically receive the benefits of the amnesty and you don’t need to apply again. If this puts you in a refund position, the ATO will issue the refund to you as quickly as possible. Make sure the ATO has your correct financial institution account details through the Business Portal.
For more information on eligibility criteria, benefits and how to apply go to the ATO’s SG amnesty page.
During these challenging times you may wish to provide extra assistance to your employees, in addition to their normal employee entitlements.
Certain benefits are exempt from FBT when provided to your employees or their associates in an emergency situation, such as emergency health care.
If you’ve provided fringe benefits to your employees over the last 12 months, you may need to lodge an FBT return. The due date for lodging and paying your 2020 FBT return has been deferred to 25 June 2020.
To find about more about FBT exemptions in emergencies and whether you need to lodge, visit the ATO’s Fringe Benefits Tax page.
The ATO have extended the STP exemption for small businesses (19 or fewer employees) to report their closely held payees through their STP-enabled software from 1 July 2020 to 1 July 2021. Find out more on the ATO’s Small employers – closely held (related) payees page.
Closely held payees include family members, directors or shareholders of a company, and beneficiaries of a trust.
If you have other (arm’s length) employees, you still have to report through STP for them.
Remember, employers with more than 20 employees need to make a finalisation declaration by 14 July each year. Employers with 19 or fewer employees will have until 31 July to make a finalisation declaration for this financial year. Let your employees know they can access their income statement through ATO online services via myGov to complete their tax returns.
Current circumstances may make paying difficult for you. If this is the case, the ATO has a range of options to support you.
For more information about paying go to the ATO’s additional support during COVID-19 and help with paying pages.
You should make sure that your financial institution account details are updated and correct via the ATO’s Business portal, or by phoning them on 13 28 66.
If you are eligible for a refund or payment of any amounts, this will allow the ATO to issue your refund in a timely manner.
If you need assistance with your obligations as an employer, the ATO is committed to helping you. It’s important for you to contact them as early as possible so they can work with you to find a solution and ensure you are not only meeting your obligations, but also accessing benefits you’re entitled to.
For more information around support available for business and employers during these difficult times, vist the ATO’s disasters page or phone their Emergency Support Infoline on 1800 806 218.