ATO SUPPORT IN THE TIME OF COVID-19
In addition to the role it will play in the Government Assistance packages, the Australian Tax Office (ATO) has also unveiled a number of initiatives in support of businesses
The ATO is focused on supporting the community through this period of disruption and uncertainty. For full and up to date details of support programs, please visit www.ato.gov.au
Tailored support available
On 12 March 2020, the Commissioner of Taxation issued a media release advising of a series of administrative measures to assist Australians experiencing financial difficulties as a result of COVID-19. You can find this media release on the ATO website and measures include payment deferral; adjustments to the GST reporting cycle; PAYG variation; and interest and penalty remission.
The ATO also recognises there may be a broader range of administrative and technical issues that are arising for you, including matters that concern PAYGW issues for your employees; fringe benefits tax; GST; tax residency; permanent establishments; thin capitalisation; lodgement implications; responding to ATO information requests; and compliance engagements.
The ATO has prepared a list of commonly asked tax questions regarding COVID-19 and this is available on the ATO website. You can also email COVID-19Taxissues@ato.gov.au
The ATO says it can also assist you with appropriate tailored arrangements that allow you to continue to manage and meet your tax obligations. If you have an existing dedicated ATO relationship manager within the Public Groups and Internationals business line of the ATO, you can also contact them for assistance. Employers will need to meet their ongoing super guarantee obligations for their employees.
A tailored compliance program
The ATO’s priority is to provide support to businesses in these difficult times. Its team has been reaching out to all large market taxpayers currently subject to compliance activity to provide support and determine what changes need to be made to current compliance activities.
Based on feedback, the ATO understands that the circumstances and needs vary significantly between organisations. As a result, a blanket approach to its compliance program is not appropriate and it will instead be focusing on providing a client experience designed for the individual circumstances of each large corporate.
The ATO will not be commencing any new audit or assurance cases over the coming period.
For existing cases, the ATO is managing each case based on the specific circumstances and needs expressed by each taxpayer.
The ATO says it will continue to monitor the changing circumstances and will work with large corporates and advisors to make further adjustments to compliance activity as required. If you have any questions, contact your client engagement case officer or your current relationship manager.
The ATO’s PAG approach
During this time the ATO’s Public Advice and Guidance Program will largely be on hold, except for critical advice and guidance, and advice relating to COVID-19 and its impacts on taxpayers. If you are concerned about the delay in the delivery of particular pieces of public advice and guidance, or have any other feedback, email PGIPAGUnit@ato.gov.au
Superannuation guarantee amnesty
On 6 March 2020 the superannuation guarantee (SG) amnesty was introduced. The amnesty allows employers to disclose and pay a 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 penalty. In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.
Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again. Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.
It is understood you may wish to apply for the superannuation guarantee amnesty but may be concerned that, as a result of COVID-19, your circumstances may change and you will not be able to pay the liability.
If you want to participate in the amnesty, the law requires you to apply by 7 September 2020. However, the ATO will work with you to establish a payment plan that is flexible to help you to continue making payments. These arrangements include flexible payment terms and amounts which will be adjusted if your circumstances change; and 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, after the ATO works with you, you are unable to maintain payments, the law requires the ATO to disqualify you from the amnesty and remove the amnesty benefits. However, the disqualification will only apply to any unpaid quarters; you will be advised which quarters are unpaid – for these quarters the ATO will re-apply the administration component of $20 per employee included in the disqualified quarter; and the ATO will also take your circumstances into account when deciding whether a Part 7 penalty should be applied to your disclosure – a review of your circumstances may result in the Part 7 penalty being reduced to nil.
Paying super is an important part of being an employer. If you’re not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.
On 24 March 2020, the Coronavirus Economic Response Package Omnibus Bill 2020 received royal assent. This forms part of the government’s measures to support businesses to withstand and recover from the economic impact of COVID-19.
This package includes measures available for eligible business with a turnover of less than $500 million, including:
• an instant asset write off threshold of up to $150,000 for assets acquired by 30 June 2020
• accelerated depreciation of 50 percent in the first year on new Division 40 assets acquired and installed ready for use by 30 June 2021.
Outside of business, the ATO will also work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation.
Unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented.
Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on its Emergency Support Infoline 1800 806 218, when they are ready, to discuss their situation.
For full and up to date information, visit www.ato.gov.au