To assist businesses (including sole traders) that are experiencing financial difficulty as a result of the Coronavirus, the Australian Taxation Office (ATO) is implementing some relief options:
A. Payment Deferrals
The ATO will work with businesses affected by the Coronavirus to defer some payments and vary instalments due by up to 6 months. This includes the following instalments:
– Income tax;
– Activity statement;
– Pay as you go (PAYG);
– Fringe benefits tax; and
– Excise payments.
B. Monthly GST Credits
Businesses with turnover of more than $20 million are required to report and pay monthly.
Businesses with turnover of less than $20 million may consider temporarily changing their reporting cycle to monthly to get quick access to GST refunds they may be entitled to. The following conditions apply:
– A change is effective from the start of a quarter (i.e. a change now will take effect from 1 April 2020);
– Changing a GST cycle does not mean changing a PAYG withholding cycle;
– Once reporting is changed to monthly, this will apply for 12 months before an election can be made to revert to quarterly reporting; and
– For businesses registered for fuel tax credits, these will be claimed monthly.
C. PAYG Income Tax Instalments
Quarterly PAYG instalment payers can vary PAYG Instalments on the March 2020 quarter activity statement.
This can be done by lodging a revised activity statement before the instalment is due and before the tax return for the year ended 30 June 2020 is lodged.
Where a variation is made, a refund can also be claimed for any instalments made for the September 2019 and December 2019 quarters.
The ATO will not apply penalties or charge interest to varied instalments for the 2019-20 financial year.
Special arrangements apply for businesses with base assessment instalment income of $500 million or less.
D. Remitting Interest, Penalties and Low Interest Payment Plans
For businesses who need help to pay existing and ongoing liabilities, low interest payment plans may be arranged with the ATO. Further, the ATO will also consider remitting interest and penalties incurred later 23 January 2020.
E. Superannuation Guarantee Payments
Employers still need to meet superannuation guarantee obligations for their staff. By law, the ATO cannot vary the employee super guarantee contribution due date or waive the super guarantee charge.
The Coronavirus situation is changing quickly and we will keep you updated as more information and the final details are released. If you are experiencing difficulty, you should contact your accountant to negotiate with the ATO on your behalf.
Please contact us to find out more. The team at EMspire Advisory are experienced accountants in Sydney and would like to help you create, grow and succeed in business.
Please note that this information is not specific and is general in nature and cannot be relied upon as advice. Please contact us for specific advice for you and your circumstances.