Affected by bushfire or COVID-19?
If you live in one of the identified postcodes impacted by the bushfires, the ATO automatically deferred any lodgments or payments you have due. For example, the 2019-20 FBT return is not due until 25 June 2020.
You, or your agent, don’t need to apply for these deferrals.
If you use a tax professional to lodge on your behalf, you may have a different deferred due date.
The ATO will also consider lodgment and payment deferrals for businesses affected by COVID-19. However, deferrals are not automatic so you or your tax or BAS agent will need to contact the ATO.
Tip! Contact your tax or BAS agent to check your due date for lodgment or payment. If necessary, they can contact the ATO to seek a deferral.
Employee super contributions – claiming a deduction
The ATO has reminded employers that super contributions are only considered to be paid for the purpose of claiming a tax deduction once they have been received by the super fund, not the date the Small Business Superannuation Clearing House (SBSCH) accepts them (if the employer uses the SBSCH).
To ensure you can claim a deduction for the 2019–20 income year, you need to allow processing time for your super payments to be received by your employees’ super funds before the end of the 2019-20 income year. The ATO says that payments need to be accepted by the SBSCH by 23 June 2020.
Remember to check with your employees if you need to update their super fund details in your SBSCH account, including a change of ownership of a superannuation product.
There is no change to when SG quarterly payments are due – the next quarterly due date is 28 July 2020.
Note! From 1 January this year, you cannot use an employee’s salary sacrificed super contributions to satisfy your super guarantee obligations. Talk to your tax adviser about your super guarantee obligations.
STP exemption for small employers
If you are a small employer (19 or fewer employees), the ATO has extended to 1 July 2021 the Single Touch Payroll (STP) exemption in relation to closely-held payees. A closely held (related) payee is someone who is directly related to the business, company or trust that pays them, such as family members of a family business, directors or shareholders of a company or beneficiaries of a trust.
This STP exemption for closely-held payees applies automatically and you do not need to apply to the ATO to access it. However, you should keep records to support your decision to apply the concession. Alternatively, you can notify the ATO and apply for the exemption through the Business Portal. Your registered tax agent can also apply for an exemption on your behalf.
If you have any other employees (also known as arm’s length employees), they must be reported through STP on or before each payday, unless you are eligible for a micro employer (1-4 employees) reporting concession.
Micro employers who need more time to move to STP reporting can ask their registered tax or BAS agent to report on their behalf on a quarterly basis. This can continue until 30 June 2021.
End-of-year finalisation through STP
The ATO has reminded employers that they need to make a finalisation declaration.
The declaration generally has to be made by 14 July each year. However, if you started reporting through STP in the 2019-20 financial year and have 19 or fewer employees, you have until 31 July 2020 to make the finalisation declaration.
If you have 20 or more employees, you should be reporting closely held payees each pay day along with arms-length employees. The finalisation due date for closely held payees is 30 September 2020.
If you have 19 or fewer employees and are voluntarily reporting your closely held payees, you can also finalise by 30 September 2020 for the 2019-20 financial year.
Benefits of e-invoicing
The ATO has been promoting the benefits of e-invoicing – by simplifying and automating the exchange and processing of invoices.
According to the ATO the benefits for business include cost savings, fewer errors and reduced payment times. In addition:
- a business will save time by not having to re-key or scan invoices, or chase missing information; and
- the e-invoicing network provides a safer and more secure channel than email.
E-invoicing is also environmentally friendly.
The ATO recommends that you keep an eye out for digital service providers rolling out e-invoicing solutions in the second half of 2020.
Applying for a government contract?
Businesses and their first-tier subcontractors tendering for Commonwealth Government contracts over $4 million (including GST) must supply a statement of tax record (STR) provided by the ATO. If you received one last year, you may need to apply for a new one.
The STR must show satisfactory engagement with the tax system, so it’s important to keep your tax obligations up to date, including registration, lodgment and payment.
Apply early to allow time for processing before the tender closing date. The ATO generally takes 4 business days to process applications.
Your tax agent can apply on your behalf.
An STR is valid for 6 or 12 months depending on if you have an Australian tax record of less or more than 4 years.
Company directors beware
Company directors can be liable for unpaid PAYG withholding amounts – both where the company fails to deduct PAYG amounts from salaries and wages and where, if it makes deductions, it fails to pay those amounts to the ATO. This is known as the director penalty regime. It also applies to unpaid superannuation guarantee charge.
The director penalty regime has now been extended to unpaid GST, luxury car tax and wine equalisation tax. This applies in relation to GST instalments, net amounts and assessed net amounts for GST instalment quarters and tax periods (as appropriate) that start on or after 1 April 2020.
Tip! If you are running a company and it is experiencing difficulties in meeting its tax obligations, talk to your tax adviser without delay. They can discuss the matter with the ATO and may be able to arrange for additional time to pay.
Read our complete June 2020 Taxwise Business Newsletter here