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  • Small Business Stewardship Group special briefing 19 May 2020

    COVID-19

    Early release of superannuation

    From 1 July 2020, temporary resident visa holders will no longer be eligible for early release of superannuation. New Zealand temporary residents and citizens will still be eligible.

    It was noted that many temporary visa holders are not represented by tax agents and may not get the message about the 1 July 2020 changes. The ATO will explore options to ensure this group receives messages regarding their eligibility.

    The Australian Prudential Regulation Authority released statistics on payment timesExternal Link at a macro and fund-by-fund basis.

    Boosting cash flow for employers

    As the ATO sees April 2020 month activity statements being lodged, we are reminding small businesses that any cash flow boost entitlement for the month of April will reference the entitlement and credit for the month of March. If their withholding (W2) was less than $10,000 in March and they received the minimum $10,000 credit, they will not receive their full April entitlement as a credit in April, until their cumulative entitlement (based on withholding amounts) exceeds the $10,000 minimum already credited.

    A member noted there is no cumulative summary of how much cash flow boost has been credited per activity statement. The ATO confirmed this was correct. Current visibility is only maintained on the Running Balance Account, through the individual cash flow boost credits applied.

    Another member noted some cash flow boost credits were delayed. The ATO explained some cases will be held for integrity checks. ATO staff are currently working overtime to minimise these delays.

    JobKeeper payments

    The ATO is receiving calls from clients expecting JobKeeper payment. In many of these cases the client had registered, but not gone on to enrol. Or, the client had enrolled, but not gone on to claim through the monthly notification process.

    The ATO is making outbound calls to clarify possible errors with some clients so we can make payment. Most of these calls are easily resolved.

    There still appears to be some confusion about the concept of ‘GST turnover’, with a member citing an example of providers of GST-free services such as childcare reporting no GST turnover.

    It was noted there are no set days JobKeeper payments are made and that publishing average times for payments to be received may be a useful mechanism to help businesses manage their cash flow. The ATO noted that it can report on how many days it takes from ATO receipt of a JobKeeper claim to the ATO passing on payment details to the Reserve Bank of Australian (RBA) but the time for the RBA to pass on to a small business’s bank and be credited to their account can vary between financial institutions.

    It was noted the JobKeeper receipt number has become evidence used by small businesses to secure commercial lease rent relief or bank loans relief. There is some client frustration this receipt cannot be printed, saved or retrieved as a PDF when requested by third parties.

    Instant asset write-off

    The ATO is currently updating our communications to address specific issues previously raised by members.

    Ordering and paying for the asset is not enough to qualify. The asset must have been delivered before 30 June 2020. This can be a challenge for small businesses due to COVID-19 related disruptions of global trade.

    Treasury noted that while the expanded instant asset write-off finishes on 30 June 2020, the Backing Business Investment - accelerated depreciation measure runs until 30 June 2021.

    Agency updates

    The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) recognised accountants and bookkeepers are busy, particularly smaller suburban firms. Some appear to be struggling to keep up with Government stimulus programs.

    ASBEFO is also seeing small businesses struggling with cash flow, the September cut-off point for many support measures, and ongoing issues regarding commercial rents. Child-care affordability is also a crucial issue for small business.

    Department of Industry, Science, Energy and Resources (DISER) advised that the Payment Times Reporting Bill 2020 (PDF 136KB)This link will download a file was introduced to Parliament. There are Minister’s rules (PDF 134KB)This link will download a file available for public consultation on the department’s website. DISER encourages stakeholder feedback.

    The Treasury advised submissions to the Standing Committee on Tax and Revenue’s Inquiry into the Tax Treatment of Employee Share SchemesExternal Link are closing on 28 May. Submissions are encouraged.

    Member insights

    Three small business owners updated the group on their experience managing the effects of the COVID-19 pandemic and their impressions of the government’s response. The group’s Co-chair thanked these members for their candour and noted their insights will be used to inform the ATO’s ongoing responses.

    The professional associations noted advisers are on a very steep learning curve. The associations are running weekly training sessions and experiencing a very positive level of member engagement.

    Many advisers are working extremely long hours and are dealing with complex and changing rules. Some mental health issues are emerging. A number of hard deadlines is putting pressure on advisers.

    ATO call centre staff were recognised as being both helpful and polite. This demonstrates we are ‘all in this together’ and the profession appreciates this effort.

    Businesses yet to digitise are really struggling. This is an ongoing issue that both the ATO and ASBFEO recognise and want to help businesses with.

    There are a number of government supported services such as the Australian Small Business Advisory ServicesExternal Link which can help small businesses digitise their business and develop on-line services.

    Businesses are fearful about stimulus measures being simply ‘turned off’ at the end of September 2020. How the measures are stopped or wound down will be just as critical as how they were implemented.

    Several members asked agencies to be careful with using the term ‘recovery'. For some industries, recovery may be a long way off.

    The group discussed what support small businesses might need in the coming months as restrictions eased.

    Wrap up and close

    The update to the Group’s Charter will be managed out-of-session.

    There will be another ad-hoc meeting to discuss Government stimulus measures in about three weeks.

    Members are asked to express their preference for phone-hook-up or WebEx for these ad-hoc meetings.

      Last modified: 04 Nov 2020QC 64121