Blog

Coronavirus: Government’s JobKeeper Payment

A major part of the Government’s response to the Coronavirus (or ‘COVID-19’) pandemic is the ‘JobKeeper Payment’ Scheme.

The JobKeeper Payment is a wage subsidy that will be paid through the tax system (i.e., it will be administered by the ATO) to eligible businesses impacted by COVID-19.

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ATO reminder about salary packaged super

The ATO has provided employers with a recent reminder that, from 1 January 2020, there has been a legislative change to ensure that when an employee sacrifices pre-tax salary in return for an additional concessional contribution into superannuation, it will not result in a reduction in the 9.5% Superannuation Guarantee (‘SG’) obligation their employer has even though doing so reduced their Ordinary Time Earnings.

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New vacant land tax measures

A new ‘vacant land’ measure limits the deductibility of costs incurred on or after 1 July 2019 (i.e., from the 2020 income year) that relate to holding vacant land, even if the land in question was first held before that date.

Importantly, however, the new provisions include (amongst other exceptions) a ‘carrying on a business’ exception.  This exception means that the limitations will not apply to the extent that the ‘vacant land’ is used, or available for use in carrying on a business, including a business carried on by either the taxpayer (i.e., the owner of the land) or by a specified related entity. 

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New super guarantee amnesty

On 6 March 2020, the government introduced a superannuation guarantee (‘SG’) amnesty.

This amnesty allows employers to disclose and pay previously unpaid super guarantee charge (‘SGC’), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 (double SGC) penalty.

In addition, payments of SGC made to the ATO after 24 May 2018 and before 7 September 2020 will be tax deductible.

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New laws can make directors personally liable for GST

The government recently passed new legislation designed to strengthen laws to “crack down on illegal phoenixing activity by dodgy business operators who try to avoid their obligations to their customers, employees and creditors.”

In particular, the changes allow the ATO to collect estimates of anticipated GST liabilities, and make company directors personally liable for their company’s GST liabilities in certain circumstances (basically by including these liabilities in the director penalty notice regime).

Importantly, the expansion of the director penalty notice regime to include GST liabilities will commence from 1 April 2020.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.


Coronavirus: Government announces new tax measures

The Government has announced a number of economic responses to the Coronavirus (or ‘COVID-19’) pandemic, including economic stimulus packages worth billions of dollars.

Some of the key tax measures include:

  • From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
  • A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions.
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ATO’s support measures to assist those affected by COVID-19

The ATO will also implement a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak.

Options available to assist businesses impacted by COVID-19 include:

  • Deferring the due dates for income tax payments, Fringe Benefits Tax payments (‘FBT’) and excise payments up to 12 September 2020 for businesses in financial difficulty; and
  • Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
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ATO on property investments

The ATO has reminded taxpayers in a property business or thinking about investing in property that there are things they should know, such as:

  • they need a clearance certificate from the supplier when buying property over $750,000;
  • they may have to pay the GST on the sale of brand new residential property separately to the ATO; and
  • income from property activities could increase their total business turnover.
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Australia’s economic response to the Coronavirus

Updated 23/03/2020

On the 12/03/2020, the government announced an “Economic Response” to the continuing Coronavirus outbreak. These have since been enhanced.

These measures are likely to be available to many of our clients, both individual and in business.

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Director Penalty Notices now extended to GST

As of 18 February 2020, GST has been added to the current Director Penalty Notices (DPN) regime.

From then, Directors risk facing personal liability if their company fails satisfy its GST obligations.

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