Scattered Australian Money for JobKeeper Updates

JobKeeper Updates

/0 Comments/in /by

Since the Government first introduced its $130 billion JobKeeper program, they have continued to release updates and clarifications. At first they seemed to be expanding both eligibility and flexibility, but now it appears that some of that may be being pulled back.

Whether you’ve already received payments under the scheme, or are anticipating receiving one, it’s important that you understand what your requirements are and how they may be changing.

Here are the most recent JobKeeper updates.

JobKeeper Updates

Subsidy Adjustments

On 11 May, Prime Minister Scott Morrison announced that the JobKeeper wage subsidy could be ‘adjusted’ in the future to provide more targeted support. The Treasury department is also considering retargeting the payment to specific industries, or even doing away with the flat rate $1,500 a fortnight (which sees some workers receiving more subsidy than their regular wages). The Labour Opposition has also indicated that it would support cutting the payment amount, if more Australians were made eligible in return.

While we don’t know what changes, if any, will be made, it makes sense to stay aware of any announcements the Government might make. With COVID-19 restrictions easing across Australia, adjustments wouldn’t come as too much of a surprise.

Early Winding Back

The Government will review the JobKeeper program at the end of June. As COVID-19 restrictions begin to ease, there’s a chance that the scheme could be wound up early. In fact, the PM says it was only meant as a temporary lifeline to help Australians through the worst of the crisis. And he believes it’s a lifeline that comes at a significant economic cost.

Additionally, the program was originally budgeted to cover six million employees, but only five million have applied. This lower than expected uptake could impact on a possible government decision to implement an early wind up.

Audits

The ATO has recently released guidance that advise that payments under the JobKeeper scheme will be audited. If you are receiving JobKeeper payments for your employees or as a sole trader it’s essential that you have confidence that your payments meet the decline in turnover test. If they don’t, you risk them being clawed back by the ATO and interest being charged on the amounts paid, at a rate of 7.89%.

The audits will also be looking to catch those businesses that are simply doing the wrong thing. Under anti-avoidance provisions, the ATO will look at businesses that:

  • defer making supplies, invoicing or receiving payments to achieve a decline in turnover for a particular period;
  • bring forward making supplies, invoicing or receiving payments to achieve a decline in turnover for a particular period;
  • transfer income-producing assets to achieve a decline in turnover for a particular period; or
  • have not been significantly affected by external environmental factors.

In other words, they’ll also be on the look-out for employers who receive the JobKeeper payments but don’t pass them on fully to their employees. In these cases not only will you be subjected to repayments with interest, but possibly with legal ramifications.

If you are a business that is at risk for being reviewed, it’s best to retain evidence that supports your decisions and your eligibility for JobKeeper payments. Contemporaneous evidence is generally more compelling so it’s a good idea to keep those records up to date for each period.

Full Time Students Under 17

The JobKeeper rules have been clarified to provide that full time students who are 17 years old and younger and who are not financially independent, are not eligible for the JobKeeper payments. This doesn’t change the rules for those that are financially independent as they’ll still require the security that JobKeeper can provide.

Monthly Reporting and Substantiation

It’s essential that if you receive (or will receive) a JobKeeper payment that you meet your monthly reporting requirements and maintain evidence to substantiate your position.

Monthly Reporting Requirements

Any entity that is entitled to a JobKeeper payment must complete a JobKeeper Declaration report within seven days of the end of each calendar month (in which a payment is received). You can make that via the Business Portal using your myGovID. Of course, your tax adviser can also help you make your monthly reports. You will need to include your current GST turnover for the month, as well as the projected turnover for the following month.

Substantiation

Employers that receive JobKeeper payments must keep records to substantiate the information that they provide to the ATO. If you don’t keep accurate records then you could lose your opportunity to receive JobKeeper payments. The ATO could also require that you return payments made, with interest.

We’re here to help if you need any additional information or advice based on your specific situation.

Contact us for your free consultation

JobKeeper Guides

/0 Comments/in , , /by

The JobKeeper payment scheme is a great initiative for Australian businesses. It can help you get through the tough economy brought on by COVID-19. But it’s not always easy to understand. Many people want to know, am I eligible? How do I enrol? Who can I speak to if I’m still not sure? So, we’ve put together easy-to-understand JobKeeper Guides that answer just those questions.

The JobKeeper Guides below provide high-level customised information about JobKeeper payments for each specific entity. They will help you understand your eligibility and give you information on how to enrol so you don’t have to dig through complicated layers of information to find out what applies to you.

JobKeeper Guides

JobKeeper Guide for Employers and Employees

For businesses that have employees.

JobKeeper Guide for Sole Traders

For sole traders without employees.

JobKeeper Guide for Partnerships

For partnerships without employees.

JobKeeper Guide for Trusts

For trusts without employees.

JobKeeper Guide for Companies

For companies without employees.

Enrolments are open now.

We’re here to help if you need any additional information or advice based on your specific situation. The ATO is also willing to work with you. So, even if you don’t think you fit any of these categories, there may be some help available to you.

Contact us for your free consultation

Woman holding change

Are My Donations Tax Deductible?

/2 Comments/in , , , , /by

Tax deductible donations – what are they and will my donations for bushfire relief qualify?

Australians are incredibly generous. This year alone we’ve already donated nearly $500 million dollars towards bushfire relief. But even in years without terrible tragedies, five out of six Aussies give to charitable organisations, with the average annual deductible donations being nearly $650 per person.

While most of us are donating because it makes us feel good to help, it also makes sense to keep track of what we give. Come tax time, tax deductible donations are a great way to keep more of your money in your pocket.

We’re often asked if a donation to a crowdfunding campaign, or to a child’s school will count as a deduction. And now, we’re being asked about bushfire donations. Unfortunately, not all donations are tax deductible.

Donations that are tax deductible

So, what is required to make a tax-deductible donation? There are five requirements.

1. It must be made to Deductible Gift Recipients.

For a donation to be tax deductible it must be made to an organisation that is accredited as a Deductible Gift Recipient or DGR. You can easily find out if the charity you’re donating to is a DGR by checking the Australian Charities and Not-for-profits Commission’s (ACNC) Charity Register.

Most of the big names will be DGRs. Places like the Australian Red Cross, The Salvation Army Australia and WIRES will most certainly have their status as a charity confirmed by the ACNC and all donations to them will be tax deductible.

However, where you might run into trouble are donations to smaller organisations – perhaps local companies that are organising fundraising that they’ll then move on to a larger entity. If the person that you give the money to is not a registered DGR, you won’t be able to claim it on your tax return, regardless of where the money finally ends up.

2. It must be $2 or more.

You can claim the amount of the donation but it must be at least $2. It can be made in the form of money or property as long as the value exceeds the base amount.

3. You cannot receive a material benefit in return.

Your donation must be truly a gift. In other words, you can’t receive or expect to receive any material benefit, advantage or item in return for your donation.

Let’s consider the typical car wash fundraiser. Imagine your son’s cricket team is having a car wash, with all the proceeds to go to bushfire relief. Even if the donations are made straight through to an accredited charity, the money you are giving is not tax deductible because in return you’ve received a great (or not so great) car clean. It’s still a great thing to do – but you can’t claim it on your tax return.

4.Your donation must comply with any applicable conditions.

For some DGRs, tax law adds extra conditions on the types of deductible gifts they can receive. An example of this is when you donate to the Australian Disaster Relief Fund. That donation must be made within two years of the disaster (or from the date the Treasury minister declares).

You can read more about conditions on certain charities on the ATO’s website. Or the DGR that you are donating to will be able to confirm what types of donations they are able to accept.

5.You must have a record.

For every donation you make, you must have a record. In most cases the DGR that you’ve donated to will issue you a receipt. But if they haven’t (and they don’t always) you can simply show your donation on your bank statement, or if you gave via your workplace, your payment summary, your income statement or with a written notification from your employer.

There is one exception to the records rule, and that is for bucket donations. Many of us have popped some change into the red Salvos bucket at an outdoor cinema event, or even in one of the seeing eye dog collection statutes in your local Woolworths. In those situations, you may deduct up to $10 total for contributions without a receipt or record of any kind.

What donations are not tax-deductible

Donations that don’t meet the above five requirements are not tax deductible, and it pays to be on your toes. It’s not always crystal clear when a donation will be permitted especially in terms of receiving a ‘benefit’.

For example, art union or raffle tickets are not tax deductible even though you may not win (and therefore, won’t receive a benefit). Likewise, donating to a Facebook fundraiser organised by your local butcher or directly to family or friends who have been affected by bushfires won’t be deductible.

Going forward

Clearly there are more reasons than just tax deductions to make donations. But if you’re making a large donation, or donating often, it pays to ensure you can use these on your income tax return. That means you’ll feel good both when you donate, and at tax time.

Have questions about your tax deductible donations? We’d love to help you with some personalised advice. Get in touch!

ATO’s Bushfire Relief and Tax Assistance

/0 Comments/in , , , /by

ATO bushfire relief will help over 3.5 million Australians. See what you’re eligible for.

The 2019/2020 bushfires have had a profound effect on Australians. As of 14 January 2020, 18.6 million hectares of land has burned, 30 people and 1 billion animals have been killed and 5,900 buildings have been lost. For those directly affected, it is a tragedy beyond comprehension. The last thing those families and businesses want to be doing is worrying about their tax requirements.

The Australian Taxation Office (ATO) understands this and is offering tax relief and assistance to over three and a half million bushfire victims. This relief ranges from deferments on filing requirements to bespoke solutions and in most cases will apply automatically to those individuals, businesses and self-managed superannuation funds (SMSFs) located within fire affected postcodes.

If you are located in one of the indicated postcodes, or even if you’re not, here are the ATO bushfire relief measures on offer.

Automatic Deferments

The ATO is extending an automatic deferment to bushfire victims for any lodgements or payments due. Due dates are now pushed back until at least 28 May 2020 to lodge and pay business activity statements and income tax returns. This applies whether you manage your taxes yourself or have an agent do it.

You don’t have to do anything to get this deferment. If you’re in one of the indicated postcodes, it’s been extended automatically.

Fast Tracking Refunds

The ATO is also fast tracking refunds to those entities and individuals in the identified postcodes. If you’ve already lodged your return, your fast-tracked refund will happen automatically.

If you haven’t lodged your return yet, it might be worth trying to do it as soon as you can. Even though you don’t have to file, due to the automatic extension, new refunds will be fast tracked as well. And additional cash flow could be very helpful in dealing with your bush fire recovery.

Remittance of Interest and Penalties

If you’ve accrued any interest or penalties during the bush fires, the ATO is [forgiving] those charges. Again, this will happen automatically if you are in an impacted postcode. You don’t need to apply for this, even if you are tax agent.

Reissuance of Tax Documents

For those that have lost homes or places of business, it is likely that you’ve lost your tax documents as well. The ATO will reissue any tax documents that they have on hand.

Tax Debt or Outstanding Obligations

The ATO is putting a halt on commencing new debt recovery actions until 28 May 2020 (at least) for those in affected areas. You can also request a payment arrangement for outstanding debts if you aren’t automatically granted one.

The ATO is taking this a step further, as well, and will consider releasing bushfire victims from income tax and fringe benefits tax debts if they are ‘experiencing serious hardship’.

Tailored Help

The government knows that many who have been affected by the bushfire disaster aren’t necessarily located in one of the identified postcodes. If this is you, don’t let that stop you from seeking help. Ring the ATO’s Emergency Support Infoline on 1800 806 218 and speak to an ATO agent about your specific needs.

The ATO recognises that everyone’s situation is different and knows that there could be situations that warrant additional support or extensions beyond what they have currently offered. For example, there are many businesses whose trade has been significantly impacted by the bushfires, even though they may not have been directly impacted otherwise.

So, even if you don’t fall into one of the above categories, give the ATO a call. They’re standing by to work with you on a case-by-case basis. They’ve made it clear that they will be ‘flexible, reasonable and pragmatic when considering each request on its merits’.

Takeaway

At the end of the day, no one wants to run afoul of their tax and reporting obligations. Now is the time to be focusing on family and community, and the ATO knows that. The tax relief options are designed to help you do just that.

If you’d like more information about ATO bushfire relief, reach out. Our specialists are here to help.