The most common and frequently asked questions we have been asked by our clients include:

      1. How can my business practically access the Boosting Cash Flow payments?

            If you are an eligible employer, the first “cash flow boost” payments will automatically be credited to your activity statements                      when you lodge them for the March 2020 and June 2020 quarters (or the months of March 2020, April 2020, May 2020 and June              2020 if  you are on a monthly lodgement cycle). The earliest time when the Australian Taxation Office (“ATO”) will give you the                      credit is 28 April 2020.

            You will receive a credit equal to 100% of the PAYG withheld in the relevant activity statement however the total initial “cash flow              boost” payments cannot exceed $50,000. Where you are not required to withhold any PAYG (e.g. due to employee’s                                          salary/wages being below tax free threshold), you will get a minimum credit of $10,000.  

            In addition, you will get additional “cash flow boost” payments for the periods June to September 2020, equal to the total initial                “cash flow boost” payments received. Quarterly lodgers will receive 50% of the total initial cash flow boosts in each quarterly                      activity statement, while monthly lodgers 25% in each monthly activity statement.

             Where the cash flow boost exceeds your other tax liabilities in the relevant activity statement, you will receive a refund within 14                 days. If it is less than other tax liabilities, it means you will pay less to the ATO.

             However, to be eligible, it is important to note that not only does your employing business need to have an aggregated (prior                     year) annual turnover of less than $50 million, it must also have:

      • Held an Australian business number on 12 March 2020 and continues to be active;
      • Made eligible payments you are required to withhold from (even if the amount withheld is zero), including salary/ wages, director fees, eligible retirement/termination payments, compensation payments, voluntary withholding from contractor payments.
      • Either (i) derived business income in the 2019 income year and lodged your 2019 tax return on or before 12 March 2020; or (ii) made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020 [for the ATO to determine your eligibility].

             If you did not have a lodgment deferral in place, you will not become eligible if you lodge or amend returns for                                                   those periods now.

        2. Can a company include the accelerated tax depreciation under the Backing Business Investment measure in its                         Research and Development Tax Incentive claim?

             According to the explanatory memorandum to the new tax legislation, companies will be able to include the tax depreciation                     calculated under this accelerated depreciation measure as part of their eligible expenditure claimable in their Research and                       Development Tax Incentive, provided the depreciating asset meets the requirements in section 355-305 of the Income Tax                           Assessment Act 1997 (“ITAA 1997”).

       3. My business is suffering from severe cash flow hardship due to significant loss of customers and disruption to                            supplies? Can I apply for deferral of lodgement and payment of my various tax obligations? Is there any                                        government assistance available to me?


          (a) Payment Deferral & Payment Plan

                 If your business or yourself has been affected by COVID-19, the ATO generally may grant you an extension to pay your income                     tax, PAYG income tax instalments, PAYG tax withholding, GST, FBT and excise by up to 6 months.

                 In addition, the ATO will consider remitting interest and penalties incurred after 23 January 2020.

                 Furthermore, the ATO may enter into a low interest payment plan with you to help you pay your existing and ongoing tax                             liabilities.

           (b) GST

                  You can consider temporarily changing your reporting cycle to improve your cash flow.

                   If you report quarterly and are due for a GST refund, moving to monthly reporting means you can get the refund sooner                                 rather than having to wait till after the end of the relevant quarter.

                   However, before you make the change, please be aware that    

        • You can only change from the start of a quarter.
        • Once you choose to monthly GST cycle, you must keep monthly reporting for 12 months before you can                        revert quarterly reporting.

           (c) Pay As You Go (PAYG) Instalments 

                You can vary / reduce your PAYG income tax instalment in your current activity statement, as well as claiming a refund of any                      previous instalments made for the 2020 financial year.    

          (d) Superannuation Guarantee 

                Unfortunately, you will still need to meet any superannuation guarantee obligations for your employees as the Law does not                      allow any variation of due date or wavier of super guarantee charge (where contributions are late or unpaid).

           (e) Payroll Tax

                 In New South Wales (NSW), payroll tax for businesses with grouped Australian wages of less than $10 million will be waived for                   3 months (i.e. the rest of year ending 30 June 2020).

                 When you lodge your annual reconciliation due on 28 July 2020, your annual payroll tax liability will be reduced by 25% of the                   amount of tax you would have had to pay for the 2020 year.

                 As part of the NSW stimulus package (Stage 2), payroll tax for these businesses can also be deferred for 3 months. Further                             details are yet to be published by NSW Revenue.

                 For businesses with grouped Australian wages over $10 million, payroll tax can be deferred (up to $4 billion) for 6 months from                   the month of March 2020 (normally due on 7 April 2020).

                 When you lodge your annual reconciliation due on 28 July 2020, your annual payroll tax liability will be reduced by 25% of the                   amount of tax you would have had to pay for the 2020 year.

                 In addition, the NSW payroll tax tax-free threshold will increase from $900,000 to $1 million for the financial year commencing                     on 1 July 2020.

               If your business operates in another State or Territory, there may also be payroll tax deferral or concessions in that State or                           Territory, please refer to our stimulus packages summaries COVID-19 State/Territory Stimulus Packages

                Please contact us to discuss further or assist you with any of the above options.

       4. I am in financial difficulty as my employment has been terminated as a result of the economic impacts of COVID-19.              What do I need to do in order to access my superannuation earlier than my retirement age?

            If you are an eligible individual, you will be able to apply online through myGov to access up to $10,000 of your superannuation                from mid-April 2020 to 30 June 2020, and a further $10,000 from 1 July 2020 until 24 September 2020, in order to temporarily                      access your superannuation (before retirement age).

            Once the ATO has approved the application, it will notify your superannuation fund without the need for you to also                                      apply to the fund.

             Please refer to our Australian Federal Stimulus Package summary for eligibility requirements.

       5. My business is employing a few apprentices and trainees but volume of trade has significantly decreased as a result              of COVID-19. How can I access the 50% wage subsidy as announced by the federal government to keep them                                employed?     

            If you are an eligible small business, you must have your eligibility assessed by an Australian Apprenticeship Support Network                   (AASN) provider. You can register for the wage subsidy from early April 2020 to 31 December 2020.

             The registration application is yet to be released however you can monitor the progress on:  Apprenticeship Support    

        6. Does the increased threshold of Instant Asset Write Off to $150,000 apply to the purchase of luxury cars?

              The increased instant asset write off can be claimed on luxury cars if they are purchased from 12 March 2020 to 20 June                          2020. However, our view is that the amount of immediate tax deduction will still be subject to the luxury car limit of $57,581 for                  the year ending 30 June 2020. The new tax legislation has not temporarily removed the car limit adjustment required under                        section 40-230 and section 328-200 of the ITAA 1997.

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