5 February 2021
STP phase 2 commencement to be delayed
A legislative instrument will issue soon around the implementation of single-touch payroll (STP) phase 2. The major change from previous announcements is the start date will now be 1 January 2022 (previously 1 July 2021 — see “Expanding data collected” on this page). This next phase of STP reporting is purportedly aimed at employers that report information about their employees to multiple government agencies, and also supports the administration of the social security system with relevant data provided to Services Australia directly.
STP instrument spells out the amounts to be notified
A new legislative instrument tied in with the above determines which amounts will be required to be reported via STP. There are also some amounts for social security purposes that can be reported via STP. It replaces a similar earlier instrument and has additional amounts listed. Entities can choose to commence reporting now, but must do so from 1 January 2022.
Larger withholding clients may need more time to lodge
If your client finds themselves unable to lodge their activity statement and pay withheld amounts on time, it may be wise to contact the ATO’s large service team to discuss circumstances. Note however that deferral requests can’t be submitted via Online services for agents. Lodgment deferrals extend the due date for lodgment of a document and provide additional time to lodge without incurring a failure-to-lodge-on-time penalty. The ATO says that while it may take more time to process requests at peak times, it generally approves deferral requests unless special circumstances apply.
Victorian congestion levy ruling addendum
A ruling was issued this week by the Victorian State Revenue Office, CL 001, titled Congestion levy – parking space for multiple motor vehicles. The ruling, which applies to both public and private car parks, explains how to determine the number of parking spaces that are leviable under the Congestion Levy Act 2005 where a space allows for the parking of multiple vehicles.
Update to practice statements regarding GST and PAYG liability penalties and records
The law administration practice statement PS LA 2011/2 provides guidance on the policies and practices for administering penalties for large entities that do not electronically notify or pay GST or PAYG liabilities. Rules make an entity liable to a penalty if the entity does not keep or retain records in a manner required by taxation law. Also updated is PS LA 2005/2, which covers the penalties for failure to retain or keep records.
4 February 2021
Permanent establishment guidance updated
Following on from Tuesday’s Daily Update item that the ATO’s guidance on permanent establishments (PEs) for foreign companies expired last weekend, and that at the time there was no indication of an extension, late yesterday the ATO published an update to its PE compliance approach (perhaps it reads TSA’s Daily Update). The update states that the previous guidance has now been extended to 30 June 2021.
ATO provides guidance on JobMaker’s additional eligible employees
An overview has been published by the ATO on identifying and nominating eligible additional employees for the JobMaker Hiring Credit, with a promise of a fact sheet being made available soon. It also notes that employers that are not eligible to claim the JobMaker Hiring Credit may be able to claim other support payments from the Department of Education, Skills and Employment.
Activity statements digitally delivered can cause problems
With digital activity statements, the key problem for most tax agents is those clients who either do not have a myGov account or have turned off their notifications in their myGov account. As the instalment notice is not arriving at the office of the tax agent, it is only the notification through myGov that alerts a client to an activity statement being issued. Demand-for-payment letters are starting to issue from the ATO.
New credit reporting rules will see financial hardship information included for first time
The National Consumer Credit Protection Amendment (Mandatory Credit Reporting and Other Measures) Bill 2019 passed Parliament yesterday, which will see consumers’ financial hardship information retained on a person’s credit report for 12 months or more, no matter the duration of the financial difficulty it relates to. The legislation also introduces free access to credit scores and access to a free credit report every three months.
Priorities for 2021 statement from APRA
The Australian Prudential Regulation Authority has released its policy and supervision priorities for the coming year, with a key focus to further enhance the resilience and “crisis readiness” of Australia’s financial system. Much of the planned agenda for 202 was suspended in March last year when COVID-19 issues took centre stage. The 2021 priorities are divided into two separate policy and supervision information papers.
3 February 2021
Is FBT payable on COVID-19 protective items provided to staff?
The ATO has settled the above question with a “yes” but quickly adds a “however”. It says an employer may need to pay FBT on items given to employees to help protect them from contracting COVID-19 while at work. These include gloves, masks, sanitisers and anti-bacterial spray. “However these benefits are exempt from FBT under the emergency assistance exemption,” the ATO says, “if you provide them to employees who have physical contact with, or are in close proximity to, customers or clients while carrying out their duties, or are involved in cleaning premises.”
ATO publishes a JobMaker Hiring Credit estimator tool
With the commencement this week of the first claim period for the JobMaker scheme, eligible employers can start claiming payments in arrears every three months from 1 February 2021 for up to 12 months for each additional eligible employee. They can receive payments for each eligible additional employee they hire between 7 October 2020 and 6 October 2021 of up to $10,400 over a year for each one aged 16 to 29, and up to $5,200 over a year for each one aged 30 to 35. The ATO has made available a JobMaker Hiring Credit payment estimator to find how much they may receive.
Deductible gift recipient family adds community sheds to the list
Men’s and women’s sheds can now apply to be included as deductible gift recipients (DGRs) and enjoy an endorsement that means people making donations to the sheds can deduct amounts of $2 or more from their tax. There are some requirements a community shed needs to meet to be eligible to apply for DGR endorsement. There are two ways to apply for DGR status for a shed. For more details, see the ATO’s webinar recording (CPD value) on this new DGR category.
If your client needs to update their email on their myGov app
The ATO advises that the latest myGov app allows for easy updating of the user’s email address (this was an issue with earlier versions of the app). Clients can now go to “My identity” when in the myGov app, select the email address recorded and follow the prompts. If they use multiple devices, each device will need the latest version of the app.
2 February 2021
ATO guidance on permanent establishments under COVID conditions expired on the weekend
While its updated guidance on permanent establishments (PEs) under pandemic conditions establishes that compliance resources will not be applied to cases where a foreign company inadvertently may have a PE because of travel restrictions, it is worth noting that the ATO’s guidance expired on 31 January 2021. The guidance had already been extended, but as yet there is no indication of a further extension.
More choice over SG payment receiving fund for employees
From 1 January 2021 on, compulsory superannuation contributions are required to be directed to the super fund chosen by the employee, which they can nominate through their myGov account on a standard choice form (or on a form an employer can provide). Already existing employees need to be given this choice as well, although should they fail to nominate a fund, the employer can direct SG payments to a previous or default fund.
JobKeeper extension two is on now
The second extension to JobKeeper, with the tier one and two payment levels of $1,000 and $650 per fortnight respectively, is now in force until 28 March. Eligible participants can enrol until the end of the program, with the ATO reminding taxpayers that even if they didn’t qualify for the first extension, they may still be eligible for the current extension.
Private wealth and withholding tax on overseas interest
The ATO has launched a campaign focusing on non-resident withholding tax relating to interest expenses paid overseas for the 2018 and 2019 income years. It says relevant taxpayers who it identifies will receive an initial letter followed up by a telephone call.
Missed SG deadline of 28 January? Step to be taken now
Just in case you have a business client who has taken their eye off the SG ball due to any number of reasons (new year fogginess, COVID strains etc), the ATO is reminding them that the law is firm about SG due dates. A superannuation guarantee charge statement should be lodged with the ATO by 1 March 2021 to avoid penalties, even if the client can’t pay in full.
1 February 2021
JobMaker Hiring Credit scheme first claim period opens today
The first claim period for the JobMaker Hiring Credit starts today, 1 February 2021, and remains open until 30 April 2021. The ATO notes that applicants can register at any time until the scheme ends, but when you register will affect the periods you can claim for.
Centrelink debt recovery activity re-commences today
Also coming into force today is Services Australia’s re-start to its debt recovery efforts. In April 2020, the agency froze 1.3 million debts to ease financial pressure on affected household budgets during the COVID-19 strife. This hiatus ended yesterday, and contact with identified debtors will start to be made from today in order to organise repayments.
JobKeeper rip-offs just didn’t happen, ATO says
Over the weekend the ATO was quick to point out that some media reports purporting that the JobKeeper program had fallen victim to fraudulent payouts were incorrect. If your client has read about fictitious employers and equally fictitious or deceased workers receiving JobKeeper payments, the ATO is reassuring the public that there have been no ultimately successful claim for deceased or other fictitious employees, and that its effectiveness in implementing JobKeeper and managing fraud with the scheme was recently confirmed by the Australian National Audit Office.
Advance pricing arrangement guidance
The ATO says its advance pricing arrangement program is an important part of its compliance assurance strategy, and has therefore provided an overview of general information about advance pricing arrangements and certain specific information for taxpayers. It says the guidance needs to be read in conjunction with practice statement law administration PS LA 2015/4.
Australia’s post-COVID debt risk a looming iceberg, says report
The Centre for Independent Studies has issued a report which looks at a fiscal landscape that has changed dramatically and rapidly since March 2020. It says the much delayed delivery of Federal and state/territory budgets in recent months now makes it possible to construct a comprehensive picture of the debt outlook up to 2024. This includes the updated Federal 2020-21 budget estimates released in the mid-year review in December.