Tag: COVID19

company tax return

Business debt on ATO’s watchlist

Posted on | by Allan Hall

The five types of business debt at the top of the tax office’s watchlist

The Australian Taxation Office (ATO) has unveiled the top five categories of business debt that have captured its attention, signalling the end of the unprecedented leniency extended to late payers during the COVID-19 lockdowns.

Speaking at the Tax Institute Tax Summit in Melbourne, Vivek Chaudhary, the ATO’s deputy commissioner of lodge and pay, emphasised the necessity of offering substantial support to taxpayers, including small businesses, amidst lockdowns and stringent public health measures.

The ATO’s arsenal during the pandemic included payment plans, deferred deadlines, waived penalties and interest, and the option to file without immediate payment, all aimed at aiding businesses during challenging times. Chaudhary acknowledged the positive outcomes of these measures but also pointed out their impact on payment behaviour, with an increasing number of businesses failing to meet tax deadlines compared to the pre-pandemic period.

Chaudhary identified five priority payment categories where the ATO’s renewed focus will be most evident:

  1. Topping the list is the unpaid Superannuation Guarantee Charge (SGC), a penalty imposed on businesses that fail to fulfil their Superannuation Guarantee obligations. Notably, small businesses owe the majority of this debt, totalling $1.8 billion. To ensure compliance, the ATO has equipped itself with tools such as garnishee notices, payment directives, Director Penalty Notices, and potential legal actions to secure SGC payments.
  2. Chaudhary expressed concerns about new self-assessed debts raised by employers, suggesting that taxpayers might be waiting for the ATO to prompt payment before taking action.
  3. Refund fraud remains a significant worry, with fraudsters siphoning billions of dollars from the tax system through counterfeit GST refunds.
  4. The ATO is also monitoring substantial aged debts exceeding $100,000, and
  5. Debts arising from audit actions initiated by the ATO. Chaudhary emphasised that while some audit adjustments stem from genuine errors, others result from negligence, recklessness, or deliberate attempts to evade tax payments, and such cases will receive no leniency, with heightened expectations for debt settlement.

Consequently, the ATO is reverting to its pre-pandemic compliance strategies to transition from the COVID-induced payment culture to a more standard payment approach. ATO commissioner Chris Jordan revealed that the ATO is pursuing approximately $50.2 billion in collectable debt, with small businesses accountable for over $33 billion of this total.

Read the full speech Addressing collectable tax debt – Tax Institute’s Tax Summit 2023 here »

CONTACT ALLAN HALL BUSINESS ADVISORS

keyboard

Support to help businesses go digital

Posted on | by Allan Hall

Digital Solutions — Australian Small Business Advisory Services

Round 1 of the Digital Solutions program will end on 31 March 2023.

What do you get?

The Digital Solutions – Australian Small Business Advisory Services program works with small businesses to make the most of digital tools and offers broader advice specific to your business needs such as:

  • how digital tools can help your small business
  • websites and selling online
  • social media and digital marketing
  • using small business software
  • online security and data privacy.

Digital Solutions is a 7-hour packaged service that offers 3 hours of one-on-one tailored support as well as group workshops or webinars.

Who is this for?

Small businesses with fewer than 20 full-time (or equivalent) employees, as well as sole traders, can access services at the subsidised rate. The service is available across all metropolitan and regional areas in Australia. 

How much does it cost?

The Digital Solutions program is $44 for 7 hours of support and your first interaction with the service is free. 

About the Digital Solutions advisers

Digital Solutions advisers hold formal qualifications in business or information technology-related disciplines and have at least 2 years’ experience providing digital advice to small or medium-sized businesses.

Contact your local Digital Solutions provider

There are Digital Solutions providers in each state and territory across Australia. Complete a short form to connect with your local provider.

CONTACT A PROVIDER NEAR YOU

Support for businesses affected by COVID-19

Digital Solutions providers are also offering general business advice to support you through this difficult time, including: 

  • business crisis management and business continuity planning
  • finance management and boosting cashflow
  • staff management and creating a safe work environment
  • retaining and staying connected to customers
  • resilience and wellbeing
  • COVID-19 stimulus packages for small business.

Find more at coronavirus information and support for businesses.

CONTACT ALLAN HALL

Safety Work Principles COVID-19

Pandemic Leave Disaster Payments extension

Posted on | by Allan Hall

Pandemic Leave Disaster Payments will be extended indefinitely

The Prime Minister has confirmed that pandemic leave payments will be extended indefinitely following this week’s National Cabinet meeting.

That’s the payment to COVID-struck workers who don’t have access to sick leave and are forced to stay home under mandatory isolation periods.

The scheme was to be turned off at the end of September 2022, despite the 5-day isolation requirement remaining in place. Sick people, “whether from COVID or from other health issues”, should stay home — and there’s a responsibility for the government to cover them financially for the appropriate period which is designated,” the Prime Minister said.

Federal and states/territories are splitting the bill. At the next meeting, the National Cabinet will look at shortening the isolation period, with the Prime Minister noting other nations are “gradually moving towards COVID being treated like other health issues.”

CONTACT ALLAN HALL

covid

Getting help during coronavirus (COVID-19)

Posted on | by Allan Hall

If you need a payment during coronavirus (COVID-19)

There’s support available if you or your family were affected by coronavirus (COVID-19).

Pandemic Leave Disaster Payment is support if you can’t earn an income because you or someone you’re caring for has to self-isolate or quarantine due to COVID-19.

Crisis Payment for National Health Emergency (COVID-19) is a one-off payment. It’s for people who get an income support payment and are in severe financial hardship due to COVID-19.

If you need ongoing financial support

If you need another payment or service, read more about getting a Centrelink payment.

CONTACT ALLAN HALL

flag_of_new_south_wales_state_nsw

Small business fees and charges rebate NSW

Posted on | by Allan Hall

Claim back up to $3,000 in fees

Apply by 24 June 2022 to ensure you can claim eligible fees and charges before the rebate closes on 30 June 2022.

APPLY ONLINE

If you’re a sole trader, the owner of a small business or a not-for-profit organisation in NSW, you may be eligible for a small business fees and charges rebate of $3,000.

This rebate helps businesses recover from the impacts of COVID-19 and encourages growth by reducing the cost of running a business. Eligible businesses or not-for-profits only need to apply for the rebate once, but can submit multiple claims until the full value of $3,000 is reached.

Funds can be used to offset the costs of eligible NSW and local government fees and charges due and paid from 1 March 2021. These include, but are not limited to:

  • food authority licences
  • liquor licences
  • tradesperson licences
  • event fees
  • outdoor seating fees
  • council rates
  • road user tolls for business use.

View the full list of eligible fees and charges. This list is updated regularly.

Employing businesses can claim 50% of the cost of COVID-19 rapid antigen tests (RATs) up to the full rebate value of $3,000 to help them assist their workers to test when required.

The rebate cannot be used for fines or penalties, fees and charges that have the key purpose of discouraging behaviours or inducing behaviour changes, Commonwealth government charges, rent on government premises, or taxes. See the guidelines for more information.

Note: If you’ve already registered for the rebate, you do not need to do anything – you will receive an automatic $1,000 increase to your rebate. Businesses newly registering will have a rebate of $3,000.

Eligible businesses and not-for-profit organisations have until 24 June 2022 to apply for the rebate. You can submit claims for eligible fees and charges until 30 June 2022.

Check eligibility and how to apply here »

CONTACT ALLAN HALL

Please be aware that there is a high level of scamming activity around COVID-19 rules and regulations and, in particular, grants and relief. These scams are increasingly sophisticated and many involve impersonation such that they may appear to come from legitimate advisors (such as Allan Hall).

At Allan Hall, we will never request money upfront, deposits, transfers to personal accounts, payments via gift cards or other unexpected or unusual payment methods. If in any doubt, contact us via phone before taking actions that appear to be at the request of Allan Hall.

covid test

Tax rules and exemptions for COVID-19 testing

Posted on | by Allan Hall

FBT, COVID-19 tests and the otherwise deductible rule

Be aware of the rules and exemptions regarding COVID-19 testing

Whilst FBT obligations do exist, there are exemptions and deductions that can be granted when providing COVID-19 tests to employees

You may have to pay Fringe benefits tax (FBT) if you:

  • provide your employees or their family members with COVID-19 tests such as a rapid antigen test, or
  • pay for a polymerase chain reaction test.

However, the otherwise deductible rule (or a different concession or exemption) may apply to eliminate or reduce any FBT payable.

Types of benefits that may arise from providing COVID-19 tests

Different types of benefits may arise for FBT purposes when you provide, or pay for, your employees’ or their family members’ COVID-19 tests.

The types of benefit that may arise under the FBT law are:

  • an expense payment benefit – where you pay for, or reimburse, an employee’s or their family member’s, COVID-19 test.
  • a property benefit – where you purchase the COVID-19 tests and give them to your employees or their family members for free or at a discount.
  • a residual benefit – where you provide your employees or their family members with a COVID-19 test that isn’t an expense payment or property benefit.

Exemptions from FBT

Some benefits are exempt from FBT. If an exemption applies, you won’t need to:

  • pay FBT for providing the COVID-19 tests to your employees, or reimbursing them for their cost
  • consider whether the otherwise deductible rule applies.
Work-related medical screening

Work-related medical screening tests are exempt from FBT if both of the following apply:

  • testing is carried out by, or on behalf of, a legally qualified medical practitioner or nurse, and
  • testing is available to all employees.

If only some of your employees get COVID-19 tests, the tests are still exempt if they are offered to all employees.

If the tests you provide or reimburse do not meet these requirements, you may need to pay FBT unless the minor benefits exemption or ‘otherwise deductible rule’ apply.

Minor benefits exemption

This exemption will only apply if:

  • the tests are provided infrequently and irregularly
  • the cumulative value of the tests provided to an employee during the FBT year is less than $300.

The otherwise deductible rule

You can reduce the taxable value of an expense payment, property or residual fringe benefit by what’s known as the otherwise deductible rule.

This is the amount your employee would have been entitled to claim as a once-only income tax deduction if they had provided or paid for the COVID-19 test themselves.

There are special records that must be kept for the otherwise deductible rule to apply.

When the otherwise deductible rule applies to COVID-19 testing

From 1 July 2021, if an employee paid for a COVID-19 test for a work-related purpose they could have claimed a deduction if certain conditions were met.

To have claimed a deduction for the cost incurred to buy or pay for a COVID-19 test, your employee must have:

  • used the test for a work-related purpose, such as to determine if they can attend or remain at work
  • received a qualifying COVID-19 test, such as a
    • polymerase chain reaction (PCR) test through a private clinic
    • other tests in the Australian Register of Therapeutic Goods, including rapid antigen test (RAT) kits

The otherwise deductible rule only applies to the extent that your employee could have claimed the work-related portion of the expenditure on COVID-19 tests as an income tax deduction. For example, if you buy a multipack of COVID-19 tests and allow your employee to use some for private purposes (such as by other family members or for leisure activities), the otherwise deductible rule only applies to the portion of the expense, property or residual benefit used for a work-related purpose.

For the otherwise deductible rule to apply, you must have the appropriate records, including the relevant declaration(s).

When the otherwise deductible rule doesn’t apply

The otherwise deductible rule doesn’t apply:

  • to COVID-19 tests you provide if
    • your employee uses the test for private purposes – for example, to test their children before they return to school or daycare
    • your employee works from home and doesn’t intend to attend the workplace, or
    • you haven’t received the declarations that are required under the FBT law
  • to any travel or parking expenses you pay or reimburse your employees to get their COVID-19 test. This is because these expenses do not have a sufficient connection to your employee obtaining or undergoing a COVID-19 test to be regarded as being incurred in respect of testing them for COVID-19.

Keeping records for COVID-19 tests

To apply the otherwise deductible rule, you must keep records, including:

  • a record of the costs of COVID-19 tests you pay for your employees (including those you reimburse them for) and the dates you paid for them. This may include a receipt or invoice.
  • a completed appropriate employer declaration or employee declaration.

CONTACT ALLAN HALL

business recovery

Where Opportunity Lies small business report

Posted on | by Allan Hall

Australia’s new small business boom

A Xero study shows Australia’s small business boom is expected to continue over the next ten years.

Research into Australia’s small business sector reveals that our small business boom is expected to continue over the next ten years, with an additional 3.5 million new small businesses expected to be established.

While the pandemic disrupted thousands of businesses, it also created opportunities for new businesses in a variety of industries. For example, while brick-and-mortar stores were bleeding, e-commerce reached new heights. Similarly, Fintech and Edtech companies saw a significant increase in their consumer base.

Prior to the pandemic, small businesses accounted for 99.8% of total businesses, 66% of employment, and 55% of value added in Australia. This rapid growth in response to an economic crisis is unprecedented, and it is the polar opposite of what happened after previous periods of economic uncertainty, such as the 2007-09 Global Financial Crisis.

READ REPORT

According to the study, the following external factors are likely to have contributed to the increase in new business registrations:

  • Job uncertainty: reduced hours, redundancies, limited opportunities for pay rises 
  • Great resignation: Australians re-evaluated their job satisfaction and sought greater enrichment, control, and flexibility in their work. 
  • Digitalisation: increased use of technology and digitalisation has decentralised many workplaces creating opportunities for business owners to work in regional areas. 
  • New opportunities: the rise of the gig economy, digital ways of working, and favourable business lending have created the conditions for more budding entrepreneurs to take the plunge.

Australia’s small businesses are investing in their recovery, with an uptick in financing for equipment and machinery financing among small businesses.

The Federal Budget included provisions that allow small businesses to receive a $120 tax deduction for every $100 spent on employee training or technology investment, up to a maximum of $100,000 per year.

According to Xero, the landmark report arrives at a hopeful chapter in our nation’s pandemic journey: one that sees a surge in small business creation as Australians adapt to uncertainty.

CONTACT ALLAN HALL

covid tests

Employee COVID-19 tests now tax deductible

Posted on | by Allan Hall

COVID-19 test expenses

From 1 July 2021, if you’re an employee, sole trader or contractor and you pay for a COVID-19 test for a work-related purpose, you can claim a deduction.

When you can claim COVID-19 testing

From 1 July 2021, to claim a deduction for the cost you incur to pay for a COVID-19 test, you must:

  • use the test for a work-related purpose, such as to determine if you can attend or remain at work
  • get a qualifying COVID-19 test, such as a
    • polymerase chain reaction (PCR) test through a private clinic
    • other tests in the Australian Register of Therapeutic Goods, including rapid antigen test (RAT) kits
  • pay for the test yourself (that is, your employer doesn’t give you a test or reimburse you for the cost)
  • keep a record to prove that you incurred the cost (usually a receipt) and were required to take the test for work purposes.

You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.

When you can’t claim COVID-19 testing

You can’t claim the cost of a COVID-19 test where any of the following apply:

  • you use the test for private purposes – for example, to test your children before they return to school or daycare
  • you receive a reimbursement for the expense from your employer or another person
  • you work from home and don’t intend to attend your workplace.

You also can’t claim a deduction for the travel or parking expenses you incur to get your COVID-19 test because these expenses don’t have a sufficient connection to you using a COVID-19 test.

Keeping records for COVID-19 tests

You need to keep records of COVID-19 tests to demonstrate that you paid for the test and the test was required for work-related purposes. This may include a receipt or invoice, and correspondence from your employer stipulating the requirement to test.

If you don’t have a record of your expenses before the law changed on 31 March 2022, the ATO will accept reasonable evidence of your expenses. Reasonable evidence is documentation that shows the cost of the test and the requirement to take it for work purposes. This may include:

  • bank and credit card statements
  • a diary or other documents, including receipts, that show a pattern of buying COVID-19 tests after the law change that could reasonably have applied from 1 July 2021.

CONTACT ALLAN HALL

Compliance cogs

COVID-19 Leave, Testing & Isolation Requirements

Posted on | by Allan Hall

COVID-19 Guide to Leave, Testing and Isolation Requirements

Navigating changes in employment legislation related to Covid-19 has been difficult for many business owners across Australia.

As COVID-19 hospitalisation/ ICU numbers decrease and vaccination numbers increase, the NSW Government is committed to easing restrictions, including no longer needing to wear masks in offices from Friday 25 February 2022. Although testing and isolation requirements have been in place across each State for some time now, with many employees returning to work in communal office environments in NSW it will remain important for employers to have access to up-to-date Covid-19 related processes and leave options.

The below information provides a guide regarding leave, testing and isolation requirements to support you in managing your employees. For assistance in resolving employee-related queries or situations which are not covered below, please get in touch with our HR Consultants for support on 1300 675 393 or at [email protected].

Illness

Employees should stay home if they have cold symptoms, such as coughing/fever/sore throat/shortness of breath/loss of taste or smell or other symptoms of COVID‑19.

If employees develop symptoms while at work, they should be directed to:

  1. separate themselves from other employees;
  2. notify their manager; and
  3. make arrangements to go home immediately.

If employees are unfit for work due to symptoms, they can access their Personal (Sick/Carer’s) Leave. If the symptoms are mild, employees may request to continue working from home and this may or may not be suitable depending on their position and specific situation.

Close contact of COVID-19 positive

If your employee is notified that they are a close contact of a person with COVID-19, advise them to separate themself from other employees, notify their manager and make arrangements to go home immediately. You can advise them to follow the Testing and Isolation Rules that apply in your state as per the table below.

Confirmed Case of COVID-19

If an employee tests positive for COVID-19 they should self-isolate immediately and notify their manager. You can advise them to follow the Testing and Isolation Rules that apply in your state as per the table below.

Employees should follow all medical advice to recover from their infection as soon as possible. Employers must take the necessary steps to determine possible exposure to COVID-19 by colleagues in the workplace and undertake appropriate sanitisation and quarantine if necessary. Employees may return to the office only in accordance with advice from the relevant health authorities in each State or Territory.

If an employee has contracted the virus (or has caring responsibilities for someone who has contracted the virus) and has consequently fallen ill, they will be entitled to Personal (Sick/Carer’s) Leave. An employer’s standard Notice and Evidence requirements will apply.

Quarantining or Self-Isolating

Employees may be required to quarantine or self-isolate, and consequently not be able to work, for a number of different reasons, including but not limited to:

  • contracting the COVID-19 virus;
  • an enforceable government direction;
  • a government-imposed travel restriction; or
  • a lawful and reasonable direction made by the employer to get tested which has led to a quarantine/self-isolation period.

Payment during Self-Isolation Period:

  • If an employee is unwell and unfit to work (or caring for a family or household member who is unwell) during the quarantine/self-isolation period they will be eligible for paid personal (sick/carer’s) leave (full-time/part-time employee) or unpaid personal (sick/carer’s) leave (casual employee)
  • If an employee is fit to work and has the capacity to continue to work during their quarantine or self-isolation period (which will be dependent on their role and eligibility to work from home), they will continue to be paid for the work they are doing.
  • If an employee is fit and able to work, however cannot continue to safely perform work whilst quarantining at home, they may have other paid or unpaid leave options or other flexible work arrangements available to them, including:
    • access to untaken paid Annual Leave entitlements
    • access to paid Long Service Leave entitlements (as applicable)
    • access to Unpaid Pandemic Leave for up to 2 weeks (this entitlement is only available to certain award covered employees – see below for further information)
    • access to Leave Without Pay
    • access to Pandemic Leave Disaster Payment through the Government for eligible employees (see below for further information)
    • other flexible work arrangements, such as an agreement to work to make up time upon conclusion of the isolation period

Unpaid Pandemic Leave – Award covered employees

Most Awards have been temporarily amended to give employees access to Unpaid Pandemic Leave. Two weeks of unpaid pandemic leave is available to all employees (including casuals). The employee will not receive payment, however, any time taken under this leave type will count as service and the employee will continue to accrue paid leave entitlements as if they were working.

Note: Unpaid Pandemic Leave does not apply to non-award covered employees.

Pandemic Leave Disaster Payment:

If any employee cannot work and earn an income, has no sick leave entitlements and has been directed to self-isolate or quarantine or needs to care for someone who needs to self-isolate or quarantine they may be eligible for the government funded Pandemic Leave Disaster Payment. There are eligibility criteria for the lump sum payment. Further details can be found here: https://www.servicesaustralia.gov.au/pandemic-leave-disaster-payment

State and Territory Testing and Isolation Rules

CONTACT US

Our experienced HR Consultants are available to support you with any employee-related questions. Please get in touch with us today on 1300 675 393 or at [email protected].