Daily updates: 30 Nov – 4 Dec

4 December

Some JobKeeper entities can elect to exclude government grants from turnover
A form has been provided by the ATO to elect to exclude government grants from the JobKeeper turnover test. The election is only available to entities that are a charity registered with the Australian Charities and Not-for-profits Commission (ACNC), and not a university or school. The election cannot be cancelled once it is made, applies to all decline in turnover tests, and can only be made if, by applying the election, the entity still meets the original decline in turnover test and the actual decline in turnover test for JobKeeper extension 1.

Economic activity makes a partial comeback, according to ABS
While the quarter to June 2020 suffered a -7% decline in activity, the Australian Bureau of Statistics reports that the quarter to September showed a partial recovery in that the decline in economic activity, while still in decline, was shown to be less of a fall at -3.8%. The ABS says this indicates a seasonally adjusted rise in economic activity of 3.3%. It says household spending drove the economy, rising 7.9% due to increased spending on both goods and services.

Parliamentary library issues paper on OECD’s approach to multinational tax
The paper, Multinational tax: the OECD’s Pillar One proposal, seeks to provide background information about the OECD’s attempts to provide countries with a “fair share” of tax from highly digitalised multinationals that have a significant economic presence, but a limited, or no, physical presence in the host country (broadly known as the Pillar One proposal).

Mark this on your calendar: ATO’s closure dates over Christmas/New Year
The ATO says it will close for the festive season at midday Thursday 24 December 2020 and reopen Monday 4 January 2021. It says if you are planning on working during our office closure period we recommend you check our system maintenance page beforehand. This page will be updated with the details of upcoming maintenance we have planned at the time of our closure, including January maintenance. See this page for details of the availability of operational dashboards, lodgment, the super clearing house and more.

3 December

Report into TPB leads government to reconsider accountants’ advisory role in super
The final report into the TPB recently released has prompted the government to review what advice accountants and tax practitioners can or cannot provide to clients in regard to superannuation. This is in light of the removal of the accountants’ exemption. One of the recommendations in the final report, which the government has indicated it agrees with (see recommendation 7.2), states: “Having recommended the regulatory burden on tax (financial) advisers is to be reduced, the review believes it is reasonable that a similar level playing field should be considered for accountants.” Although the government says consideration will also be given to recommendations in this area stemming from the Hayne report.

Guide released by Federal Government on payment times reporting scheme
The Department of Industry has released a guide on the required transparency from large businesses to small businesses in order to comply with the reporting requirements of the payment times reporting scheme that was legislated earlier this year. The scheme comes into force from 1 January 2021.

SA will be handing out more $100 COVID recovery vouchers soon
The South Australian Tourism Commission’s $4 million voucher scheme launched in October provided $100 vouchers for use at participating CBD hotels, and $50 vouchers to spend in regional and suburban accommodation as part of a significant tourism stimulus package to further boost the visitor economy and local jobs. And they are coming back! The SA Government has announced that a second round, which will be expanded to interstate visitors, will launch from 5 January 2021. Bookmark this page and come back then.

Screen production in Australia gets a tax incentive boost
The Federal Government is to provide $30 million in funding to Screen Australia over two years to support the production of Australian drama, documentary and children’s film and television content. A large portion of the increased support is to come from the harmonisation of the Producer Offset to a flat 30% for eligible television and feature film content. See this fact sheet for more details.

2 December

JobKeeper deadlines extended for Christmas/New Year period
The ATO has extended the date that employees need to be paid for JobKeeper fortnight 20 from Sunday 3 January 2021 to Monday 4 January 2021. Also, for JobKeeper fortnights 21 and 22 only (from 4 January and 18 January respectively), the wage condition will be satisfied if payments are made to employees by 31 January 2021. See this ATO page and scroll down to just below the table “JobKeeper fortnights”.

ATO’s own performance scorecard has a few red marks this tax time
The ATO regularly publishes its current year service commitment performance, based on a set of criteria with an achievement status ranked by a colour-coded “on-target or not” score — a green tick for satisfactory, an amber horizontal line for a marginal miss of less than two percentage points from the target measure, and a red X for a larger fail. The self-assessed scorecard for the latest month, to 31 October, is mostly a well-deserved green, but there is one service commitment marked with a red “fail”, with another two dismally so. Its commitment to resolve 85% of taxpayer complaints within 15 business days was in the red (just) for delivering an 82% score. However the commitments to finalise 60% of SG employee notification cases within four months scored a poor 14% of the 60% aspired-to score, and 57% of the hoped-for 90% finalisation within nine months.

Data match program announced for online selling
The Commissioner has announced via the Commonwealth Gazette a program of data matching that will be conducted. The ATO will acquire data on Australian sales made through online selling platforms for 2018-19 through to 2022-23 financial years. These records will be electronically matched with ATO data holdings to identify non-compliance with registration, lodgment, reporting and payment obligations under taxation laws. The data collected may contain client identification details and the account details of individuals and businesses.

The following builds on questions stemming from our recent Full Expensing of Assets webinar (access the recording here). This is the last in this series.

If an entity chooses to exit the small business depreciation concessions in the year ending 30 June 2021, will they still have to wait 5 years before re-entering? Read more

1 December

e-Invoicing consultation has eye on mandatory adoption
Treasury has issued for consultation an options paper containing scenarios looking at the mandatory adoption of electronic invoicing by businesses. Treasury says it will also consult broadly with industry representatives and other interested parties on the topics discussed in this consultation paper. It notes that according to Deloitte Access Economics estimates, every time an e‑Invoice replaces a paper invoice it can deliver up to $20 in cost savings to the businesses involved. Interested parties are invited to comment on the issues raised in this paper by 18 January 2021.

JobKeeper uptake far fewer than expected
The Federal Government has indicated that its data shows that around 450,000 fewer businesses and around 2 million fewer employees qualified for JobKeeper in October than in September. Around 86% of workers qualified for the Tier 1 payment of $1,200 per fortnight, with around 14% on the Tier 2 payment of $750 per fortnight.

Rental deferral determination for SMSFs now in force
As a result of the financial impacts of COVID-19, some self-managed super fund trustees have needed to provide rental relief in the form of deferrals to a related party tenant. The determination to allow this, SPR 2020/2 (Self-Managed Superannuation Funds (COVID-19 Rental income deferrals – In-house Asset Exclusion) Determination 2020) is now registered and became effective from 27 November 2020.

Proposed changes to FBT record keeping still on the cards
The ATO is reminding employers and their tax agents that the Federal Government has proposed that it will provide the Commissioner of Taxation with the power to allow employers to rely on alternative records, such as existing corporate records where adequate to finalise their FBT returns. This would be an alternative to employee declarations and other prescribed records. When enacted, the change will have effect from the start of the first FBT year (1 April) after the date of royal assent of the legislation, which cannot be earlier than 1 April 2021.

The following builds on questions stemming from our recent Full Expensing of Assets webinar (access the recording here). Further Q&As will follow in coming Daily Updates.

Can an entity with a turnover of more than $10 million elect to use the small business depreciation rules and transfer existing assets to a general small business pool and then write off the pool balance if the value is less than $150,000? Read more

30 November

HomeBuilder scheme extended to 31 March 2021
The Federal Government has announced that the HomeBuilder scheme will be extended past its previous expiry date of 1 January 2021 to the end of March. Price caps are to be raised during the extension period for builds in NSW and Victoria (from $750,000 to $950,000 NSW and $850,000 Victoria), but the size of the grants will decrease to $15,000 (down from $25,000). The reduced grant is for building contracts (new builds and substantial renovations) signed between 1 January 2021 and 31 March 2021 inclusive, however the extended deadline is for all applications, including for the original $25,000 grant and the new $15,000 grant. Applications can now be submitted up until 14 April 2021 (inclusive). This will apply to all eligible contracts signed on or after 4 June 2020. Government data (scroll down) shows that as at 20 November nearly 24,000 grants have been applied for.

Government response to TPB review raises spectre of heavy sanctions for errant agents
In response to the released review of the Tax Practitioners Board, which has been welcomed by the TPB, the government has agreed to 20 of the 28 recommendations the review put forward. Misconduct by tax practitioners has come under focus, with options floated for permanent disbarment from the tax profession, enforceable undertakings, interim suspensions, quality assurance audits, infringement notices, and external interventions to wind up a practice. Recommendations also include a call to introduce a new administrative penalty regime, administered by the ATO, to impose penalties on tax practitioners who demonstrate an intentional disregard of the taxation laws.

Changes to incumbent ABN arrangements
New regulations, to commence 1 April 2021, have been registered. The New Tax System (Australian Business Number) Regulations 2020 put in place improvements to the operation of the Australian Business Number system before the existing regulations sunset. While the changes do not substantially affect the operations of the ABN system, improvements have been made by repealing redundant provisions, simplifying language and restructuring provisions for ease of navigation.

The following builds on questions stemming from our recent Full Expensing of Assets webinar (access the recording here). Further Q&As will follow in coming Daily Updates.

  • Can a taxpayer elect to leave the small business depreciation rules and adopt the normal depreciation rules to avoid having to instantly write-off large purchases? Read more

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