Small Business Stewardship Group special briefing 22 September 2020

COVID-19

JobKeeper

The ATO provided an update on the JobKeeper program. We are seeing new employees coming on as a result of recent changes to the reference date for the original scheme. We are currently focusing on three key pieces of work in preparation for the updated scheme (JobKeeper 2.0) commencing 28 September.

• The Commissioner’s alternative test legislative instrument will be available shortly.
• Most systems and process functionality for JobKeeper  2.0 are being deployed over the weekend of 26–27 September 2020. Some of these changes will be immediately visible to users and others will be built ready to be released at the appropriate time. We will ensure our systems continue to be robust and capable as these changes are made.
• We will be publishing timelines, infographics and how-to guides shortly. The materials will reflect the new screens and show people how to identify and indicate the correct tier for their employees. We are also preparing instructional resources and scenarios for JobKeeper 2.0.

The themes arising from feedback we have received through this and other groups are informing our communication work, in particular:

• The Fair Work amendment relating to the 10% turnover reference test is causing some confusion. We will reinforce that there is no change to the relevant thresholds for JobKeeper eligibility for ATO purposes, i.e. 30% or 15% for not-for-profits and 50% for large business.
• There is still some confusion about whether employers need to re-enrol and complete new employee nomination forms for JobKeeper 2.0. We will ensure communications clearly state that they are not required to re-enrol or resubmit employee nomination forms.
• We have started some communications to reveal the new screens in order to avoid ‘screen shock’.
• Where it is outstanding, we will be writing to people to prompt them to lodge their 2019 September Quarterly BAS as this forms part of the basic eligibility test.
• We are encouraging businesses to report via Single Touch Payroll to provide an added level of assurance and to help us streamline payments.

We expect most questions about JobKeeper 2.0 will relate to the new tier system, the Commissioner’s alternative tests and the 80-hour threshold. We will have online resources available on these topics.

Member insights

A member sought clarification about whether cash or accrual accounting should be used when comparing turnover periods. The ATO confirmed that it is whatever method the business usually uses to report.

A member noted that they are receiving an increasing number of questions regarding access to other stimulus measures/state-based grants from businesses that are likely to be coming off JobKeeper. Some of the confusion is due to several measures/grants being linked to JobKeeper eligibility. One example cited was commercial tenancy measures in Victoria. The ATO confirmed we are aware of these interconnectivities and directed members to the information on ato.gov.au about this topic.

A member provided an example where a small business owner was running a business that was eligible for JobKeeper in March. They were also working on a long-term casual basis for another company that was eligible for JobKeeper. Instead of applying for JobKeeper themselves as an eligible business participant, they accessed JobKeeper payments through their employer. Now their employer is no longer eligible for JobKeeper, they want to enrol as an eligible business participant.

The ATO advised that once they have given the form to their employer, they cannot give a subsequent form to the Commissioner as an eligible business participant. This rule was specifically changed for employees when they changed the 1 July model to allow them to give a second notice to a new employer, but it was not changed to allow them to provide a second notice to the Commissioner as an eligible business participant.

A member noted he has received a lot of questions about the record keeping requirements to prove a business owner has worked 80 hours. The ATO is finalising our guidance on these matters.

Members commended the new ato.gov.au content for JobKeeper 2.0, particularly the infographic.

Boosting cash flow for employers

The September activity statement triggers the last cash flow boost credit for eligible businesses. The amount of credit applied reverts to the calculation received in the first half of the year up until June.

Cash flow boost nominally finishes at the end of September, but businesses will receive credits through October and November as they lodge their September monthly or quarterly activity statements.

Members were asked to encourage eligible employers to keep lodging their activity statements. If issues arise because the net result is a debt being owed, businesses are encouraged to lodge their activity statement and call us to manage any payments. Revisions to activity statements and late lodgments up to two years will still have the credit applied but businesses are encouraged to lodge as soon as possible.

Instant asset write-off

As previously highlighted, the Instant asset write-off expansion has been extended to 31 December 2020. It is not sufficient to just order and pay for the asset by the cut-off date; it must be installed and ready for use.

The ATO acknowledged feedback received about global supply chains creating some uncertainty about meeting the eligibility test.

Agency updates

Australian Small Business and Family Enterprise Ombudsman

A multi-speed economy is developing with some businesses getting back on track while others, particularly in Victoria, are still unable to trade. State border closures are hurting small businesses, especially in the tourism sector. Since early August, the Ombudsman has seen many businesses simply give up.

The dilemma is that a lot of businesses cannot afford to close due to accumulated debt, including debt to the ATO. A viability assessment grant would provide professional assistance to those who cannot afford it.

Government agencies need to streamline the insolvency and bankruptcy requirements and make it easy and cost effective for businesses that are not going to be able to reopen.

Treasury

The Budget will be announced on 6 October 2020. The Treasurer issued a press releaseExternal Link on 11 September 2020 outlining the Budget lock-up arrangements due to COVID-19. The press release includes an email address for stakeholders to contact if they would like to get in touch with Treasury about the Budget lock-up.

Department of Industry, Science, Energy and Resources (DISER)

The Payment Times Reporting Bill 2020External Link passed the Senate on 3 September 2020. Guidance material is planned to be published by early November. DISER will start contacting businesses in October to advise them about the scheme and what it means for them and start consulting on IT system design.

DISER is working with other government agencies to look at what we can do to make the employing process easier. A consolidated checklist for employers will be released in September. This checklist will provide all the government information a prospective employer needs to know before they take on an employee.

Member insights

The ATO needs to set out their debt expectations to provide small businesses with some confidence. The ATO confirmed we are working on communications and a one-stop-shop landing page for information on debt matters. We will provide as much clarity as possible about timeframes for debt processes.

The ATO key message is for businesses to contact us so that we can better manage any debts and provide that confidence.