COVID-19 Home Office Concessions extended to 30th June 2021

The ATO has recently extended the home office 80 cents per hour shortcut method to 30th June 2021, for taxpayers who worked from home during the 2020/21 year.

The fixed rate of 80 cents per hour covers all the following running expenses:
• power, light and heating
• cleaning costs
• the decline in value and repair of home office items such as home office furniture and furnishings, phone, and computer or laptop devices
• phone and internet expenses
• stationery and computer consumables

Each individual working from home will be entitled to claim 80 cents per hour, irrespective of how many people live in the same house.

If you decide to use the shortcut method, it will be very important to keep a record of the hours worked (eg a timesheet, roster, diary or similar document).

You may, of course, continue to use the standard 52 cents per hour, or the actual cost deduction methods; the shortcut method is merely an alternative that has been offered as a concession in the current climate.

If you need more information, or help in determining which claim is best for you, please contact our office.

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Commercial tenancy relief scheme extended

The Victorian Government has further extended the Commercial Tenancy Relief Scheme until 28 March 2021.

The Scheme was introduced to relieve financial hardship faced by tenants as a result of coronavirus by providing:
• A moratorium to certain small to medium enterprises on commercial tenancy evictions for the non-payment of rent;
• A freeze on rent increases during the moratorium
• Rent relief by commercial landlords in proportion to (i.e. that matches) their tenants’ reduction in turnover due to coronavirus, made up of a minimum 50 per cent rent waiver (the remainder can be made up of a rent deferral)

The Government is also extending land tax relief to commercial or industrial landlords that provide rent relief to their tenants in 2021, and owner occupiers of commercial properties.

Small business tenants seeking rent relief from 1 January 2021 to 28 March 2021 will need to apply to their landlord in writing with evidence of their eligibility as soon as possible, as a landlord is only required to provide rent relief from the date of this application.

If a tenant has already made a request and is seeking further rent relief for this extended period, then they will need to make another request to their landlord supplying the required evidence.

Further details are available here

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Taxpayer wins first JobKeeper test case

A recent Administrative Appeals Tribunal (AAT) case has seen a sole operator claim JobKeeper payment despite not holding an active ABN on or before 12 March 2020, which is a key date under the integrity provisions of the JobKeeper scheme.

The case involved Jeremy Apted, a specialist valuer who had held an ABN since 2012, but canceled it in mid-2018 as he moved to retirement. Realising that retirement did not suit him, Mr. Apted, resumed his valuation business in September 2019 but did not reactivate his ABN because he mistakenly assumed that an ABN was only required if he was registered for GST.

On 31 March 2020, Mr. Apted applied to have his ABN reinstated, and this was granted (backdated to 1st July 2019) after he provided additional information. Having satisfied all other eligibility requirements, Mr. Apted applied for JobKeeper but this was rejected by the ATO on the basis that at the point in time on 12 March 2020, he had no active ABN.

The ATO argued that the integrity measure, which exists to deter taxpayers from backdating an ABN registration to qualify for JobKeeper, should apply in this case, but the AAT held that the backdated registration (which had been deemed appropriate by the Australian Business registrar) enabled Mr. Aspen to be eligible for JobKeeper payment.

While the ATO is yet to comment on whether it will challenge the decision, this is a win for small business owners who like Mr. Apted, did not (due to legitimate reasons) have an ABN at the key date of 12th March 2020.

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JobKeeper clawback begins

At the recent Senate Estimates hearing, Jeremy Hirschhorn, the ATO’s Second Commissioner, stated that $120 million in JobKeeper payments had been clawed back from those either deliberately seeking to rort the system or who had made reckless mistakes. Mr Hirschhorn went on to say that there did not appear to be widespread fraud across the Government’s stimulus measures and most mistakes were honest. In the cases identified so far, JobKeeper had not been clawed back from employers making honest mistakes but these employers were prevented from making future claims.

In September, the ATO noted that compliance checks had halted 55,000 JobKeeper applications at the very first stage, because they did not meet the eligibility criteria, and delayed $1bn in payments to more than 75,000 applicants for further review. Eleven matters have been referred to Serious Financial Crime Taskforce operations and around 50 matters referred for criminal investigation. But overall, the Tax Commissioner stated, “the vast majority of Australians have done the right thing and only claimed the amounts they were entitled to.”

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COVID-19 PAYG instalment variations – welcome concession from the ATO

Taxpayers who are concerned about reducing their September 2020 tax instalments will be pleased with the lenient approach that the ATO will take, as it is hard to be accurate in projecting future income so early in the financial year.

The ATO has indicated that it will not be applying penalties or interest for the 2021 income year for excessive variations of PAYG instalments when taxpayers make their “best attempt” to estimate their end of year tax.  

Normally, the ATO can apply penalties where the value of the varied instalments is less than 85% of the total tax payable, but due to the impact of COVID-19, the ATO will not be pursuing this in 2021. However, the way the ATO’s guidance has been worded does indicate that this is not a complete guarantee that penalties will not be payable in all circumstances.

You can find more information here.

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Hospitality industry grant opens

Applications are now open for the Victorian Government’s grants program to help hospitality businesses outside of the City of Melbourne prepare for COVID Normal, by creating safe outdoor dining spaces.

Under the “Outdoor Eating and Entertainment Package”, eligible businesses can apply for a grant of $5,000 that can be used to pay for practical things like umbrellas, outdoor furniture, screens and other equipment needed for new, expanded or enhanced outdoor dining and food service. Grant funds can also be used to assist businesses with training, marketing and other costs of modifying trading operations to focus on outdoor dining.

The program will remain open until 11.59pm on 11 December 2020 or until funds are exhausted, whichever is earlier.

You can apply here.

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Could this be your JobKeeper 2.0 lifeline?

If you are feeling stressed thinking you will miss out on the next phase of JobKeeper, because you have failed the Decline in Turnover basic test, the next few paragraphs could be the stress-relief you need.

Last Wednesday 23rd September, the ATO released details of its “alternative tests” for the next phase of JobKeeper.  These are tests that organisations can apply where the Decline in Turnover basic test does not produce the required drop of 15%, 30% or 50%.  Pass one of these alternative tests, and you’re back to receiving JobKeeper.

There are seven tests, which apply depending on your actual circumstances, as follows:

1. New businesses

2. Business with a substantial increase in turnover

3. Business with an irregular turnover

4. Business affected by drought or natural disaster

5. Business acquisition or disposal that changed the entity’s turnover

6. Business restructure that changed the entity’s turnover

7. Sole traders or small partnerships with sickness, injury or leave

The tests allow you to compare your current turnover to a period other than the one normally required.  So, for example, for the September 2020 quarter, you do not need to use the September 2019 quarter as a comparison.

For some of our clients, these tests have given their business a lifeline by allowing them to qualify for the latest round of JobKeeper support.

As you can imagine, the rules are complex and there are conditions, so if you are interested (or stressed!), why not give us a call on 98781477?  As we said at the start, it could well be the stress relief you need.

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Victorian government grants – up to $20,000

Last week the Victorian government announced its latest stimulus measures. A key component is the Business Support Fund 3, which provides Victorian businesses and charities with grants ranging from $10,000 to $20,000.

Applications for this grant opened on Friday 18th September 2020 and will close at 11.59pm on 23rd November 2020.

While there are similarities to previous Business Support Grants from the Victorian state government, this time the scope is narrower.

To be eligible for a grant from this program, applicants must:
• operate a business located within Victoria; and
• be registered as operating in an industry that has an industry restriction level of Restricted, Heavily Restricted, or Closed; and
• participate in the Commonwealth Government’s JobKeeper Payment scheme; and
• employ people, and be registered with WorkSafe; and
• have had an annual payroll of less than $10 million in 2019-20; and
• be registered for Goods and Services Tax (GST) at 13th September 2020, with some concessions for Charities and some businesses; and
• hold an Australian Business Number (ABN) at 13th September 2020; and
• be registered with the responsible Federal or State regulator.

As with earlier similar grants, integrity measures apply.

Unlike earlier versions of this grant, larger employers may receive a higher grant. Only one grant per ABN is permitted. An eligible organisation will receive:
• $10,000 if its annual payroll is less than $650,000
• $15,000 if its annual payroll is between $650,000 and $3 million
• $20,000 if its payroll is between $3 million and $10 million.

This grant is specifically aimed at industries which have been unable to operate freely due to the government limiting their scope of operations, being those with a restriction level of Restricted, Heavily restricted, or Closed. The grant will apply where restrictions will not be eased between the First Step and the Second Step of Victoria’s roadmap for reopening. A list of eligible industries is available on this page (see Eligible ANZSIC classes fact sheet). As eligibility for this grant will depend on whether the industry code (the ANZSIC class code) for your organisation is listed on the government’s list, it is imperative that organisations check, and if necessary, amend their ANZSIC code on the Australian Business Register (ABR) before applying. You can access the ABR here. RDL Accountants is also able to check and, if necessary, amend your ANZSIC code on your behalf.

Once you have checked eligibility, including your ANZSIC code, you can apply for the grant here. RDL Accountants is also able to apply on your behalf. The government expects to process grants within 5 business days.

You can access further information on this page, including a link to frequently asked questions. Our office is also able to assist you. Just call us on 9878 1477, or email us at contact@rdlaccountants.com.au.

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The JobKeeper Extension

In late July 2020, the Federal Government announced an extension to the JobKeeper measure beyond its 27th September 2020 conclusion date, with further measures announced in light of the recent COVID19 restrictions imposed in Victoria. At present, we are awaiting legislation to enact these changes.

To be eligible for JobKeeper from 28th September 2020, the government has set out following additional criteria:-

  1. The decline in turnover test is required to be re-tested on a quarterly basis;
  2. The decline in turnover test is based on actual GST turnover rather than projected turnover;
  3. Employees may qualify for JobKeeper if they were eligible employees at 1st July 2020 (previously 1st March 2020).
  4. A two-tier payment rate based on the eligible employee’s or business participant’s average working hours per week;
  5. The current $1,500 per fortnight payment rate will be reduced on 28th September 2020, and then reduced further on 4th January 2021 until 28th March 2021.

What does it mean for business owners?

Employers should identify any employees who may have missed out on JobKeeper because they were not employed on 1 March 2020, as they may now qualify for JobKeeper from 3rd August 2020. This could potentially capture newly hired employees, and long-term casuals who have been regularly and systematically employed for at least 12 months at 1st July 2020. If you have employees impacted by this change, you will still need to work through the eligibility requirements, including providing JobKeeper Payment Employee Nominations and meeting the wage condition, but just remember that these changes are not yet law.

Employers should also consider the following action steps as we move towards this second phase of JobKeeper.

  1. Re-test the decline in turnover test: maintain good and timely records to determine whether the decline in turnover test has been satisfied on an ongoing basis.
    To be eligible for the JobKeeper extension for the period from 28th September 2020 to 3rd January 2021, employers will need to compare the actual GST turnover for the September quarter only.
    To be eligible for the JobKeeper extension for the period 4th January 2021 to 28th March 2021, employers will need to compare the actual GST turnover for the December quarter only.
  2. Identify additional eligible employees on 1st July 2020: more employees may now qualify for JobKeeper, including newly hired employees, and long-term casuals who have been regularly and systematically employed for at least 12 months at 1st July 2020.
  3. Determine the type of worker: employers should assess if employees worked 20 hours or more per week on average in either the four weeks of pay periods before 1st March 2020 or 1st July 2020 (whichever is applicable). Similarly, business participants should consider how they can ascertain hours actively engaged in their business for the month of February 2020 or June 2020.
  4. Meet the wage condition: pay the eligible employees according to the new rates of JobKeeper depending on whether they are full-time or part-time employees.

Under the new arrangements, the following reduced JobKeeper rates will apply, depending on the classification of the worker as explained above, being either full-time (ie 20 hours or more) or part-time (less than 20 hours):-

For the period from 28th September 2020 to 3rd January 2021:
• $1,200 per fortnight for full-time employees;
• $750 per fortnight for part-time employees

For the period from 4th January 2021 to 28th March 2021:
• $1,000 per fortnight for full-time employees;
• $650 per fortnight for part-time employees

The RDL JobKeeper team is able to assist you in ensuring that you correctly assess and maximise your entitlement to this stimulus payment.

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Superannuation Amnesty ending soon

The superannuation guarantee (SG) amnesty provides employers with a one-off opportunity to “self-correct” underpayments of superannuation for any period up to the March 2018 quarter, with minimal sanctions, and the ability to claim a tax deduction for the underpaid superannuation. The amnesty only applies to “voluntary” disclosures.

The door is closing on this extremely generous concession. If you want to participate in the amnesty, the law requires you to apply by 7th September 2020. This date remains, despite any disruptions from Covid, as it is the legislated date, and the ATO does not have discretion to extend it.

To qualify for the amnesty, employers must either pay the full amount owing by 7th September 2020, or if the business cannot pay the full amount, enter into a payment plan with the ATO.

Employers should note that only payments made by 7th September 2020 will qualify for a tax deduction. In addition, if you agree to a payment plan and do not meet the payments, the amnesty will no longer apply to you.

If you need help in applying for this amnesty, please contact our office.

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