5 minute tax updates: 15-19 June

Payment times bill passes, goes to upper house
Cash flow boost and PSI clarification
COVID-19 “protective clothing” included in deductible claims
Draft instrument changes STP needs for closely held payees
ATO to review some taxpayers’ eligibility for cash flow boost
Director identification number a step closer
Ensuring JobKeeper employers are not subject to additional SG obligations

Penalty unit to increase from 1 July
Women in the workforce participation aid

Payment times bill passes, goes to upper house
The Payment Times Reporting Bill 2020 has been passed by the House of Reps, which includes a new obligation for large businesses and large government enterprises with an annual total income of more than $100 million to publicly report on payment terms and practices for their small business suppliers (that is, annul turnover of less than $10 million). Consequential amendments makes it possible for the Commissioner to disclose certain information coming out of the payments regime.

Cash flow boost and PSI clarification
The Treasury Laws Amendment (2020 Measures No 3) Bill 2020, which also treats some DGR statuses, extending the instant asset write off and PAYG instalment non-indexation (mentioned in previous 5 minute updates) also contains in its schedule 6 tweaks to the “boosting cash flow” rules to clarify that the payments for which an entity can receive a cash flow boost payment include those for which an amount must be paid to the Commissioner under the special obligations applying to certain personal service income payments. The amendment dates to the commencement of the cash flow boost.

COVID-19 “protective clothing” included in deductible claims
Your clients may be grateful to know that the ATO has announced, via a media release, that protective items such as face masks, gloves, sanitiser and anti-bacterial spray may be deductible. This pivots on these items not being supplied by an employer and not being reimbursed. Relevant clients may include those working in industries such as healthcare, retail and hospitality.

Draft instrument changes STP needs for closely held payees
Draft STP 2020/D3 provides a limited exemption for businesses that have closely held payees to report through single touch payroll for the 2019-20 and 2020-21 income years. Entities will not be exempt from having to report arm’s length issues, but may choose to voluntarily report these issues through STP. Doing so may free it from being obliged to provide income statements to closely held payees or make an annual report of these to the ATO. Comments are open until 9 July.

ATO to review some taxpayers’ eligibility for cash flow boost
The ATO has announced that it has determined that some businesses will need to provide more information before it can successfully determine if they are eligible for the cash flow boost. These reviews may cause delays for your clients receiving credits, however the ATO says it has options to help your clients with amounts owing while waiting for the outcome of any eligibility review.

Director identification number a step closer
A bill that was re-introduced after lapsing with the last federal election has just been passed by the Senate. The Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2019 provides for a unique identifier number, dubbed a director identification number (DIN), that will provide traceability of a director’s relationships across companies, enabling better tracking of directors of failed companies, and will prevent the use of fictitious identities. The aim is to prevent illegal phoenix activity. The amendments will be effective two years from assent or an earlier date if deemed necessary. Existing directors will be required to obtain a DIN within a period to be specified via legislative instrument. Penalties will apply to directors that fail to apply for a DIN in time.

Ensuring JobKeeper employers are not subject to additional SG obligations
The regulations contained in Superannuation Guarantee (Administration) Amendment (JobKeeper Payment) Regulations 2020 set out the requirements in relation to the SG responsibilities of employers receiving JobKeeper, and seek to make sure employers are not subject to additional SG obligations as a result of participation in the scheme. One key point is that amounts paid to employees that do not relate to the performance of work and are only paid to satisfy the JobKeeper wage condition do not form part of a salary base for the SG charge. Note also that as the JobKeeper scheme commenced on 30 March 2020, this means that there were two days in the quarter ended 31 March 2020 that were part of the first JobKeeper fortnight. Employers should check that super contributions that needed to be made by 28 April 2020 are correct.

Penalty unit to increase from 1 July
The amount of a penalty unit is to be increased from 1 July 2020, adjusted for CPI. The new value will be $222, up from $210. The government says this is the first CPI up-tick of penalty units since indexation was introduced in 2017. The new level of penalty will apply for offences committed from the same date.

Women in the workforce participation aid
Now law, the Paid Parental Leave Amendment (Flexibility Measures) Bill 2020 aims to make it easier for women to engage in employment by providing more flexible ways to access parental leave. From 1 July 2020, the legislation implements changes to the paid parental leave scheme to enable eligible claimants to claim up to 30 days of parental leave pay (PLP) within 24 months of the birth or adoption of a child, in addition to 12 weeks of PLP within 12 months of the child’s birth or adoption.

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