Some of your business clients may wish to apply for the superannuation guarantee amnesty but may also, given the coronavirus crisis, be concerned that as a result of COVID-19 their circumstances may change and they will not be able to pay the liability.
The ATO has committed to work with taxpayers in these circumstances to establish a payment plan that is flexible to help business owners continue making payments. These arrangements include:
- flexible payment terms and amounts which it will adjust if circumstances change
- the ability to extend the payment plan to beyond 7 September 2020 (the end of the amnesty period). However, only payments made by 7 September 2020 will be deductible.
If, even after the ATO has done what it can to help, your client is unable to maintain payments, the law requires the ATO to disqualify them from the amnesty and remove the amnesty benefits. However:
- the disqualification will only apply to any unpaid quarters
- the ATO is able to advise which quarters are unpaid – for these quarters it will re-apply the administration component of $20 per employee included in the disqualified quarter
- it will also take your client’s circumstances into account when deciding whether a Part 7 penalty should be applied to their disclosure – a review of your client’s circumstances may result in the Part 7 penalty being reduced to nil.
The ATO says it also recognises that for some employers, applying for the amnesty will result in them receiving a refund. In particular:
- for those employers who are eligible and lodged a super guarantee charge (SGC) statement between 24 May 2018 and 6 March 2020, the ATO is amending their returns as quickly as possible so that any refunds can be paid
- if your client had made payments of SGC or contributions to employee super funds in 2017-18 or 2018-19 that are eligible for income tax deductions, you should include this deduction in your client’s tax return for the relevant year. Once the ATO has amended the return, it will pay any refund due as soon as possible. Generally this will be within 14 days.
To allow the ATO to issue refunds in a timely manner, it is best to make sure that your client’s financial institution account details are updated and correct. This can be done via the Business Portal or by phoning the ATO on 13 28 66.
The ATO acknowledges the difficult times the community has been experiencing recently with COVID-19 and the 2019–20 bushfires, however it says that the law does not allow it to vary the due date for lodgment of an amnesty application. If your client is a small or medium business and you or they need further assistance managing tax and super obligations, there is also the option of contacting the ATO’s Emergency Support Infoline on 1800 806 218.