ATO Support for Businesses Affected by COVID-19

Your team at Morrows will assist you with ATO support, contact, applications and registrations to get the best outcome for you and your business.

In response to the escalating economic impact of the COVID-19 pandemic, the ATO has outlined some support measures that will be available to businesses that have been adversely affected by the outbreak.

Concessions that may be eligible include:

1. Four Month Tax Deferral

Eligibility:

• Businesses affected by COVID-19

Concession:

• Payment dates for Income Tax, Business Activity Statements, Fringe Benefits Tax, and Excise payments can be deferred for up to four months
• This will be granted at ATO discretion on case-by-case basis

2. GST Reporting Cycle

Eligibility:

• Businesses with a turnover of $20 million or less

Concession:

• Businesses currently reporting on a quarterly basis may elect to change to a monthly basis, to access GST refunds earlier
• The earliest this can apply from is 1 April 2020
• Changing the GST reporting cycle does not mean you also have to change the PAYG Withholding reporting cycle
• However, if registered for fuel tax credits, this will then need to be reported monthly
• The GST reporting cycle can be changed through a tax agent or the online business portal
• If the GST cycle is changed to monthly, it must remain in place for 12 months

3. Cash Payment for Employers

Eligibility:

• Businesses that pay wages to staff and withhold tax on these wages
• An annual turnover of less than $50 million

Concession:

• A cash payment of up to $25,000 is available on Business Activity Statements or Instalment Activity Statements lodged for the periods 1 January 2020 to 30 June 2020
• Employers who withhold tax on their employees’ salaries will be eligible for a payment of 50% of the amount withheld, up to a cap of $25,000 for the current financial year
• The payment will be a credit to the business’ integrated client account, enhancing a refund or reducing a debt
• The concession is calculated automatically, and will be processed in the March and June 2020 quarters for quarterly lodgers, and March, April, May, and June 2020 months for monthly lodgers
• Monthly lodgers will receive a payment calculated at three times the rate for the March lodgement, to ensure similar treatment to quarterly lodgers for the first quarter of the year
• If you are an employer who pays wages but is under the reporting thresholds for PAYG Withholding, you are still eligible for a cash payment of $2,000
• This cash payment will be tax free income for the business, and will be calculated automatically on the relevant BAS lodgement

4. Amending PAYG Instalment Rate

Eligibility:

• Businesses on a quarterly PAYG Instalment system
• Businesses on a monthly PAYG instalment system with base assessment instalment income of $500M or less

Concession:

• For quarterly payers, if you vary your instalment amount for the March 2020 Quarter, you can also claim a refund for excess instalments paid for the September 2019 and December 2019 quarters
• For monthly payers, you will need to contact the ATO to discuss varied instalment rates and refunds
• Taxpayers who receive income from Trusts that will experience an impact on their distributable income (investment trusts and business operating through a Trust) can vary their PAYG Instalment Rate accordingly

5. Penalties and Other Tax Liabilities

Eligibility:

• All businesses with existing payment plans, or interest and/or penalties applied to tax liabilities

Concession:

• Where a business has incurred interest or penalties on tax liabilities after 23 January 2020, the ATO will consider remitting these interest and penalty charges
• If a business has an ongoing tax liability, the ATO will consider entering a low interest payment plan
• Both these measures can be arranged through communication with the ATO

Next steps

We encourage you to reach out to your Morrows Tax team contact to discuss whether any of the above are accessible as that could assist in receiving some immediate cashflow and alleviating some compliance pressure.

As new announcements are made by government and financial institutions, we will continue to keep you abreast of developments.

Contact your Morrows Adviser to work through the opportunities and concerns.