Staying JobKeeper compliant with bring-forward payments for the holiday season
The ATO says that where an eligible employer with a regular fortnightly pay cycle (or shorter) makes additional payments to its employees in the JobKeeper fortnight immediately before its holiday closure, and those additional payments relate to a future JobKeeper fortnight or fortnights during that holiday closure, it will treat the additional payments as having been paid in the subsequent fortnight or fortnights for the purposes of satisfying the wage condition.
Key dates issued for employers interested in the JobMaker Hiring Credit
The ATO has published the key dates employers will need to know if they want to take advantage of the JobMaker scheme. For example, to start claiming from 1 February 2021, and that the credit applies to all eligible new positions created until 6 October 2021. It also provides a table of all the JobMaker claim periods.
Payroll relief for contractors in Victoria who ordinarily perform services for the public
Payments made to a contractor in Victoria may be excluded from a payroll tax liability under certain conditions. The Victorian SRO has issued a revenue ruling, PTA-021v2, that spells out the factors the Commissioner generally considers in determining this exclusion.
PBO releases medium-term fiscal projections
The Parliamentary Budget Office has put together a research report (download it here) that describes the medium-term fiscal projections for 2020-21. The report provides detailed analysis and projections of Australian government receipts and payments over the forward estimates and the medium-term period. It shows the profound impact that the COVID-19 pandemic will have on Australia’s fiscal position.
Mid-Year Economic and Fiscal Outlook (MYEFO) 2020-21
The Mid-Year Economic and Fiscal Outlook (MYEFO) updates the economic and fiscal outlook from the previous budget. Clause 14 of the Charter of Budget Honesty requires the release of a MYEFO each year by the end of January, or six months after the last budget, whichever is later. As well as updating the economic and fiscal outlook, the MYEFO updates the budgetary position. In particular, the MYEFO takes account of all decisions made since the release of the budget which affect expenses and revenue and hence revises the budget aggregates. An appendix to MYEFO summarises all policy decisions taken since the budget.
PCG spells out working from home additional running expenses claims
The practical compliance guideline PCG 2020/3 states that as a result of COVID-19, a significant number of employees and business owners are working from home and incurring additional running expenses in relation to their income-producing activities, but also covers the “shortcut method” of claiming 80c an hour. The PCG is in force until 30 June 2021.
Global exchange of financial account information: Latest report
The OECD has released its report on the implementation of new international standards on the automatic exchange of information for tax purposes by countries worldwide. The Peer Review of the Automatic Exchange of Financial Account Information has been published by the Global Forum on Transparency and Exchange of Information for Tax Purposes. The OECD says that 88% of jurisdictions that engaged in automatic exchange since 2017-18 were deemed to have satisfactory legal frameworks in place.
Key COVID focus areas of financial reports highlighted by ASIC
ASIC has highlighted key focus areas for financial reporting by companies for years ending 31 December 2020. Under COVID-19 conditions, ASIC expects directors, preparers of financial reports and auditors to pay particular attention to asset values, provisions, solvency and going concern assessments, events occurring after year end and before completing the financial report, as well as disclosures in the financial report and Operating and Financial Review (OFR). As the impact of COVID-19 continues, the areas identified are complemented by guidance provided in frequently asked questions on the ASIC website.
WA to exempt some apprentice wages from payroll tax
The WA Government has announced a payroll tax exemption for eligible employers on wages subsidised through the Boosting Apprenticeships Commencements scheme to help recovery from COVID-19. The scheme applies to apprentices or trainees of eligible businesses who commence and undertake training between 5 October 2020 and 30 September 2021. The scheme reimburses eligible businesses up to 50% of wages paid to an apprentice or trainee, to a maximum of $7,000 per quarter.
Ruling issued on withholding tax exemption for foreign resident super
Law companion ruling LCR 2020/3 provides technical guidance on key concepts relating to sovereign immunity and the “superannuation fund for foreign residents” withholding tax exemption. The ruling will provide certainty to foreign investors in understanding their eligibility for certain tax exemptions when they invest in Australia. The ruling includes eleven examples that illustrate the application of the law.
TPB’s last webinars for the year are on today
Just in case you’re scrambling for some last minute CPD hours, the TPB is hosting two webinars today, at 1pm and 3pm AEDT. Details and registration can be found here.
Requirement for SMSFs to prepare reports 45 days early dropped
The final version of the instrument Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2020, registered this week, has dropped an earlier proposal contained in its exposure draft to have SMSFs prepare financial statements 45 days before lodgment.
ATO to issue certificates for taxpayers who apply for travel support
To support clients applying for the COVID-19 Consumer Travel Support Program payment being administered by Services Australia, the ATO will be issuing a certificate of tax information. If your clients apply, you may receive their certificate of tax information. To help ensure integrity and to simplify the process, the ATO will only issue certificates for ABNs that have been provided to the ATO by Services Australia following an initial grant application. If you receive a certificate on behalf of your client, you should forward this as soon as possible, to support them to meet the application deadlines for the program.
COVID early release of super over Christmas-New Year period
If your clients have been adversely financially affected by COVID-19, they may be able to access some of their superannuation early. The ATO says end-of-year pubic holidays may delay COVID-19 early release of super processing and payments. Applications must be received in myGov by 11.59pm AEDT on 31 December 2020 (this means 8:59pm local time in WA). Processing and payments by super funds may occur into January 2021. If your clients have issues applying online between 29 and 31 December, they can call 1300 66 22 11 between 10am and 6pm AEDT (this line will be activated on these days only).
Research shows inflation expectations improved, but still down from pre-COVID
A Roy Morgan survey between April and November has revealed that Australians expect an inflation rate of around 3.4% for the next two years. The result is up from recent months but significantly down on pre-pandemic expectations. A consistent element found in the Roy Morgan research is that home owning taxpayers are more likely to have higher inflation expectations than renting taxpayers.
JobMaker Hiring Credit payment estimator
The ATO has constructed an estimator tool for employer clients that are keen to get a feel for the amount of JobMaker payments that their situation will generate. The estimator does not determine eligibility, and the calculated results are based solely on the information provided at the input details section. The ATO emphasises that the exact amount of your JobMaker Hiring Credit payment will be calculated only when you complete your claim form.
Services Australia’s guidance for clients on JobKeeper and its income support payments
The agency many of your clients may still refer to as Centrelink, Services Australia, has published guidance that some of your clients may find useful, which deals with other income support payments that Services Australia manages and their interactions with the temporary JobKeeper COVID-19 support payment. These include JobSeeker, the Youth Allowance, Parenting Payment, Disability Support Pension and the Age Pension.
Economic impact of COVID’s second wave and the early recovery
The Australian Statistician, Dr David Gruen, has provided a summary of the early recovery of the Australian economy, tempered by second wave COVID-19 impacts and continued restrictions. In an article released via the ABS, Recovery tempered by second wave impacts – the September quarter 2020, Gruen says the COVID-19 period saw the fastest and largest fiscal response to an economic event in Australian history, with several hundred policy interventions announced across all levels of government. Expenditure on the JobKeeper wage subsidy alone totalled around $70 billion by 30 September 2020, compared to total Commonwealth government expenditure of $57 billion on all stimulus policies in response to the 2008-09 global financial crisis (GFC).
Tax avoidance taskforce 2019-20 highlights
The ATO says that its Tax Avoidance Taskforce last financial year managed to raised $4.3 billion in liabilities and collected nearly $2.5 billion in cash from audits in the 2019-20 financial year. The ATO’s compliance activities generated $2.7 billion in tax liabilities and $1.6 billion in audit yield from large public groups and multinational corporations, wealthy individuals and private groups. It has also included its stated focus for the current income year, which is on specialist large market advisers that promote and implement tax avoidance schemes, and engage in uncooperative, misleading and obstructive behaviour, including the misuse of legal professional privilege (LPP) during reviews and audits.
Treasury consulting on education and training expense deductions
In the 2020-21 Budget, the Federal Government announced that it would consult on allowing individuals to deduct education and training expenses they incur, where the expense is not related to their current employment. A consultation paper has now been released. Individuals can currently deduct education or training expenses they incur that are sufficiently related to their current employment, reflecting the general principle in the income tax law that allows deductions for expenses incurred in the course of earning assessable income. Comments and submissions are open until 22 January 2021.
SMSF trustees note: TBC indexation reliant on December CPI
The ATO notes, in regard to the indexing of the transfer balance cap, that this will only occur if the result for the consumer price index for the December 2020 quarter is 116.9 or higher. The CPI figure for the September 2020 quarter released on 28 October was 116.2. If TBC indexation is triggered by the December CPI, this will apply from 1 July 2021. The ATO emphasises that once indexation of the general transfer balance occurs, there will be no single transfer balance cap which applies to all individuals.
User guide provided by ATO supplements online help available for agents
A user guide provided by the ATO complements the help section available in the system Online services for agents (which the ATO has started to refer to by the acronym OSfA). It reminds practitioners that the functions available to you in OSfA depends on if you are a tax or BAS agent, your Access Manager permissions, and of course if a function is relevant to your client.
Updated guidance issued on adjusting unclaimed super
The ATO states that if a practitioner becomes aware of a material error or omission in a previously unclaimed superannuation money statement, you have 30 days from when you find the error or omission to lodge a valid adjustment request. To help lodge a valid adjustment, the ATO has recently updated its guidance Adjusting unclaimed superannuation to include examples of what it would consider to be a valid or invalid adjustment request.