The key measure announced is the “Jobs Plan” consisting of $619m to enhance services to help people find jobs and to fund wage subsidies to get people back to work, particularly women aged over 45. Payroll tax concessions will also be expanded and small to medium businesses will be eligible for a tax credit for hiring and rehiring workers.
While many businesses are focusing on meeting ever changing health regulations as well as the health of their customers and staff. The tax side of things shouldn’t be neglected, especially GST. The ATO has recently provided some insights on its methodologies for selecting entities for its GST assurance programs as well as how it tailors its compliance approach and the tools it has at its disposal.
A series of administrative measures to assist businesses experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic has been announced by the ATO. These include deferring the payment date and amounts due on BASs, income tax assessments, FBT assessments, and excise by up to 4 months.
Every year, trustees of SMSFs have to ensure that the fund’s assets contained in the financial statements and accounts are at market value for the associated audit. Due to COVID-19 impacts on the 2020 and 2021 financial years, the ATO has provided a concession for trustees of SMSFs in relation to valuation evidence. It will allow auditors to lodge an Auditor/actuary contravention report with reasons as to why to the trustee was unable to obtain the appropriate evidence. If the ATO deems the reason to be COVID-19 related, no penalties will apply.
The JobSeeker COVID supplement has once again been extended for a further 3 months accompanied by an associated cut in rate. The first extension was due to end on 31 December 2020, but the extension will allow the supplement to run until 31 March 2021 which will be welcome news for many individuals still struggling with unemployment. However, beware that the original supplement rate of $550 per fortnight, which was cut to $250 per fortnight in September, will be further cut from 1 January 2021 to $150 per fortnight.
Rental property deductions have many rules, and the ATO is on the lookout for incorrect claims. Some expenses can be deducted immediately, while others will need to be claimed over time. Stay on top of the rules and avoid ATO headaches this tax time.
Temporary concessions for bankruptcy actions and director liability claims have been extended to 31 December 2020. This will bring welcome relief for businesses who need more time to get back on their feet. However, businesses who have clients or customers in financial difficulty should seek assistance from their advisors on the next steps forward.
The government has handed down its big spending budget in a bid to revive the economy. In terms of individuals, as expected, the government has confirmed that it will bring forward and backdate the previously legislated tax cuts by 2 years.
The ATO has outlined options for businesses struggling with the economic downturn including deduction of business losses and offsetting losses in future years. It is also assisting taxpayers with waiving interest and penalties in certain circumstances.
If your business is in relatively good shape and have been contemplating an asset purchase, now is the time. Not only will you be helping the Australian economy get back on its feet, you’ll be doing your business a favour by taking advantage of the instant asset write-off threshold of $150,000.