Latest update 13 August 2020
Liaising with the ATO and Treasury on behalf of our members
Melbourne Stage 4 restrictions - CA ANZ engagement with ATO
The imposition of Stage 4 restrictions in Melbourne triggered a range of CA ANZ Tax Team interactions with the ATO, including:
- Liaison with ATO on statements and website updates, supporting taxpayers and tax agents.
- “New” JobKeeper applications for employers who have not hitherto applied.
- “New” JobKeeper enrolments for employees who have not hitherto been eligible (or who have switched enrolments from a previous employer)
- Fortnight 9 and 10 JobKeeper applications.
- “Cash gap” problems (employers have stood down employees due to Stage 4 restrictions and have no cash to pay the wages necessary to obtain the JobKeeper wage subsidy in arrears)
- Impact of Stage 4 restrictions on ‘business as usual’ ATO written engagement with taxpayers (correspondence from ATO on reviews, requests for information etc). We’ve suggested a review of ATO deadlines for responses from taxpayers and their intermediaries located in Stage 4 postcodes (or indicate ATO willingness to grant extended deadline for responses).
- Impact of Stage 4 restrictions on current ATO compliance and debt collection programs. We’ve suggested a review of timelines for taxpayers and intermediaries located in Stage 4 areas, offering deferment of activity until restrictions are eased.Re-publishing guidance on ATO change of tax agent address for correspondence, communications preferences in online services etc.
New COVID support payments announced - Tax treatment?
A raft of new COVID-19 support payments have been announced by Federal and State governments in the wake of new restrictions, particularly in Victoria. The CA ANZ Tax Team was already working with the ATO on website materials clarifying the tax treatment of various COVID-19 payments, and last week asked the ATO to update this draft guidance to address the tax treatment of these newly announced payments:
- Federal government: Pandemic leave disaster payment to those who have no more sick leave available to them ($1,500 per fortnight). See Legislation Update below (this payment is taxable).
- Federal government: Direct payments to childcare centres so they stay operational and staff are kept with an employment guarantee.
- Victorian government: $1,500 Coronavirus (COVID-19) Worker Support payment to financially support Victorian workers, including parents and guardians, who are required to self-isolate or quarantine due to coronavirus (COVID-19).
Joint bodies (again) offer help on JobKeeper 2.0
The joint professional associations have written to Treasury and ATO officials offering input to confidential consultations on the design, drafting and implementation of JobKeeper 2.0. Our aim is achieve well considered legislative instruments and sound guidance.
Joint bodies seek continued payroll tax exemptions for JobKeeper 2.0
The joint professional associations have written to State and Territory Treasurers seeking continuation of current payroll tax concessions for JobKeeper 2.0 payments.
Tax Team needs your feedback
Small Business Ombudsman seeks CA input on SME finance
Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, has been receiving mixed messages from the financial sector saying that it has significant available capital and is continuing to lend to small business, whilst feedback from small business and industry organisations is that capital is not flowing where it is most needed and there is significant red tape to even extend existing facilities. The CA Tax Team is keen to receive reader insights via email.
Submission on draft Legislative Instruments re Board approved courses
Chartered Accountants Australia and New Zealand (CA ANZ) lodged a submission to the Tax Practitioners Board (TPB) on the draft Legislative Instruments (LIs) in relation to Board approved courses, released for public consultation on 1 July 2020.
Submission to the TPB on the draft BAS services LI
CA ANZ has lodged a submission to the Tax Practitioners Board (TPB) on the draft Legislative Instrument in relation to BAS services (draft BAS LI). In our submission, CA ANZ opposed expanding the scope of permissible BAS services in the manner proposed, i.e. covering the full subject matter and nature of services in the draft LI at this time. We have previously expressed concerns about the inclusion of Superannuation-related services within the realm of BAS agents, however we consider that this proposed amendment has reached a point where it is excessive, undesirable and unacceptable. We also believe it creates more uncertainty with blurred boundaries into advising on some of the most complex areas of tax and super issues, such as a worker’s status. In our view, any decision to expand the scope of BAS services should only be made following a full review of the academic requirements for registration, as CA ANZ/CPAA recommended in our joint submission to the Review of the TPB. To do so now before that full review does not adequately balance or manage the risks to consumers. Consumer protection is the primary object of the TAS regulatory regime.
Meetings and Roundtable participation
First online R&D Roundtable meeting
CA ANZ Tax Team participated in the first online R&D Roundtable with AusIndustry and the ATO on Wednesday 5 August 2020. We requested that long-awaited guidance on eligible R&D expenditure (direct expenditure and overheads) be released by the ATO, and in this regard we referred to the ASBFEO report recommendations for specific joint guidance by the two administrators. The ATO advised that such guidance was underway but was delayed due to guidance on COVID-19 stimulus measures taking priority. We also emphasised the importance of R&D tax incentive entitlements at this time, particularly for start-ups that do not typically qualify for JobKeeper payments eg being pre-income.
FBT Working Group meeting
The CA ANZ Tax Team participated in a meeting of the ATO’s FBT Working Group last week (17 July 2020). Agenda items discussed included:
- Draft ATO guidance on FBT and car fringe benefits (car not used due to COVID restrictions) - expected to be published on ATO website soon
- Revised version of ATO guidance on novated leases and cash-contributions/trade-ins
- Whether car expense deductions of employees (for employee’s own car) need to be reduced by the amount of any reimbursement or payments for car expenses they receive from their employers (interplay between FBT and s51AH ITAA 1936)
- Associate lease of a car, and employee contributions.
Connect with the Australian Tax Team
Members are encouraged to stay engaged in the consultation process and share suggestions and feedback.Contact us