Daily updates: 19-23 October

23 October

NEWS
ABS: Less reporting fall in turnover in October compared to July
The Bureau of Statistics (ABS) has just published a report that shows the proportion of businesses reporting a fall in their monthly revenue decreased from 47% in July to 31% in October. Its latest Business Impacts of COVID-19 Survey also showed that almost three quarters (73%) of businesses had not sought additional funds over the previous six months. Almost two in five of all businesses (38%) reported that available cash on hand could sustain their business operations for six months or more, while 29% reported that cash on hand could sustain operations for less than three months.

Law companion ruling addendum for JobKeeper decline in turnover
LCR 2020/1 has an addendum that aims to clarify that the ruling addresses the original decline in turnover test introduced by the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 and does not cover in detail the actual decline in turnover test that was introduced as an additional requirement for JobKeeper fortnights from 28 September 2020 by the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 8) 2020. It also includes minor updates to reflect legislative amendments to the original decline in turnover test following the extension.

Future investment risk from climate study released by Australian Council of Superannuation Investors
To assess climate risk, investors require sufficiently granular climate-related disclosure to adequately understand their investment exposure and consider the impacts of transition and physical risks. This research provides an overview of the current state of climate-related disclosures in ASX200 companies. To reach their conclusions, researchers reviewed all publicly available documents produced by ASX200 entities as at 31 March 2020.

JOBKEEPER EXTENSION Q&As

The following builds on questions stemming from our recent JobKeeper extension webinar (members can access the recording here). Further Q&As will follow in coming Daily Updates.

  • How was turnover (and the turnover test) determined under the JobKeeper rules for fortnights 1 to 13 (March to September 2020)? On a cash or accruals basis? Read more
  • How is turnover (and the turnover test) determined under the rules for the JobKeeper extension period? Read more

22 October

NEWS
JobKeeper and general interest charge
Online services for agents now includes a critical response account for transactions relating to the JobKeeper payment scheme. This account may show amounts your clients owe if the ATO is asked to amend the JobKeeper payment amounts they have claimed. From 28 September 2020, general interest charge (GIC) will automatically apply to outstanding amounts in your clients’ critical response accounts. GIC applied before this date will be remitted, and you will see this on the account. See here for more on JobKeeper overpayments.

APRA updates early release initiative and COVID-19 data collections
The Australian Prudential Regulation Authority (APRA) has determined the need for changes to the Early Release Initiative (ERI) data collection and COVID-19 Pandemic Data Collection (PDC). Some data collection has been discontinued from 30 September 2020. Updated ERI reporting requirements for superannuation entities are available on the APRA website. Updated FAQs on the PDC are available at: Frequently asked questions – Pandemic Data Collection.

Two thirds of working Australians keenly feel the COVID impact
Researcher Roy Morgan has tracked the impact of COVID-19 on the employment situations of Australians, which shows that two-thirds of working Australians (67%) have had “a change to their employment” due to the pandemic. Just before the end of the financial year, 11.2 million working Australians (72%) reported a change to their employment circumstances because of COVID-19. By the first month of the new income year, there were still 10.4 million reporting their employment situation had changed. Nearly three-quarters of working Tasmanians (74%) have had a change to their employment due to the impact of the Coronavirus, which is just ahead of people working in Victoria (71%) and New South Wales (70%). The impact has been noticeably less in the three states which have dealt most effectively with COVID-19. Only 57% of working people in South Australia have had a change to their employment and 62% in each of Western Australia and Queensland.

JOBKEEPER EXTENSION Q&As

  • What does the term Legacy Employer mean? Read more
  • Do employees that have been stood down still qualify for JobKeeper for the post-27 September 2020 extension period?
    Read more

21 October

NEWS
Tax Practitioners Board’s annual report highlights difficulties and challenges ahead
In something of an understatement, the TPB’s annual report states that 2019-20 has been one of the most challenging years for the TPB and tax practitioners. The just-released annual report reflects the TPB’s focus on keeping tax advice to consumers of the highest standard, with an increase in practitioner termination of registration (up129%), sanctions (a 32% increase), with also a slight growth in written cautions. There has also been a 25% increase in the ATO referring matters to the TPB.

JobMaker Hiring Credit legislation passes lower house, prepares for Senate amendments
The Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020, otherwise known as the JobMaker scheme, has moved to the Senate among reports that Greens senators intend to move amendments to quarantine larger businesses from JobMaker payments, which are made when a busines puts on certain cohorts of employees based on age. Schedule 1 to the bill amends the act to allow the Treasurer to make rules for a kind of Coronavirus economic response payment that is primarily intended to improve the prospects of individuals getting employment or increase workforce participation.

Surprisingly low “mortgage stress” during COVID: Roy Morgan
New research from Roy Morgan found that in the three months to August 2020, 20.2% of mortgage holders were “at risk” (751,000) which is near the record low of 723,000 reported a year ago in the three months to October 2019. The researcher notes however that the significant support provided to the economy by the Federal Government, as well as measures taken by banks and financial institutions to support borrowers over the last six months, is not going to last forever.

JOBKEEPER EXTENSION Q&As
The following builds on questions stemming from our recent JobKeeper extension webinar (members can access the recording here). Further Q&As will follow in coming Daily Updates.

  • As we move into the JobKeeper extension period, what has not changed from the JobKeeper rules as they applied up until 27 September 2020? Read more
  • I’ve also heard about a 10% test. What is that related to? Read more

20 October

NEWS
ATO provides options when JobKeeper overpayments discovered
Under the first version of the JobKeeper scheme put in place in the earlier stages of the COVID-19 crisis, eligibility to participate was determined by a decline in “projected GST turnover” — not the actual GST turnover that JobKeeper 2.0 requires. This put an unintended dampener on uptake and a reported reluctance of some businesses to even apply — a survey at the time indicated that 40% of eligible business clients did not take up JobKeeper. The ATO has flagged again the options for when an overpayment does not have to be repaid, and when overpayments do have to be repaid.

Three years of transitional land tax relief in SA
Significant reforms to the aggregation rules for landowners in South Australia, for which some property owners may be facing much higher land tax bills, has led RevenueSA to offer a three-year package of relief. A transition fund has been established for relief of up to $50,000 in 2020-21, $30,000 in 2021-22 and $15,000 in 2022-23 for eligible individuals and company groups. Applications are now open.

Crypto-currency and tax: An OECD perspective
Crypto-assets, and virtual currencies in particular, are in rapid development and tax policymakers are still at an early stage in considering their implications. As such, the OECD has prepared with the participation of over 50 jurisdictions the report Taxing Virtual Currencies which is the first comprehensive analysis of the approaches and policy gaps across the main tax types (income, consumption and property taxes) for such a large group of countries.

The 85% lodgment benchmark off the table this year
The ATO has repeated its earlier call-out to tax practitioners that for the 2019-20 lodgment program, it will not be applying the usual 85% lodgment performance score. “We acknowledge that your current focus is on guiding your clients to understand and access relevant COVID-19 support measures at this time. Additionally, the devastating bushfires that affected large parts of Australia during 2019-20 may have significantly disrupted your lodgment program,” the ATO says.

19 October

NEWS
JobKeeper rule changes for child care providers
Employees who work for a child care subsidy (CCS) approved provider will no longer be eligible for JobKeeper payments. This includes sole traders operating a child care service. To prepare for this change, the ATO says if an employer has staff working in child care they should assess if these staff duties relate principally to the delivery of a CCS approved service.

AMA (NSW) says Victorian Court of Appeal decision could close NSW practices
The president of the Australian Medical Association NSW says a Victorian court decision on payroll tax has potentially placed GP and other specialist practices in NSW in danger of being forced to close. “Standard procedure for many medical practices is for the practice to manage the money by receiving payment on behalf of the doctors and later distributing it to them,” Dr Danielle McMullen said. “A decision by the Victorian Court of Appeal, in relation to a similar business model, demanded that payroll tax be applied to money before it is distributed to individual staff, despite the fact the money was only being held on their behalf. These practices are incredibly common throughout NSW and are now pretty much the standard for how medical care is offered outside hospitals.”

Administrations and defaults on the rise for September 2020
According to the CreditorWatch Business Risk Review for September 2020, in comparison to August 2020, the number of businesses entering into administration rose for the first time since June, up 11% in September; while the number of business defaults increased by 23% in September – the first increase recorded since May 2020. Victoria recorded a 23.8% increase in business administrations, following a 49.3% decrease in August. Queensland recorded a 24.1% increase in business administrations, following a decrease of 25.4 in August, but NSW recorded a further 1.6% decrease in business administrations, following a 34.3% decrease in August.

COVID-19 and gambling risks
The global COVID‑19 pandemic and related government restrictions led to changes in the availability of gambling in Australia, with land‑based gambling venues temporarily closed and major national and international sporting codes suspended. The Federal Government’s Institute of Family Studies has completed research into the social impacts this has had. The research findings from this study aim to inform the development and implementation of policy and practice responses to prevent and reduce gambling-related harms in Australia.

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