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  • Tax Time update – 11 August 2020

    Service Delivery

    Call volumes received by the ATO have reduced recently, however calls are still 10% up on last year.

    The nature of calls continues to focus on stimulus measures predominantly JobKeeper. There has been a reduction in calls relating to the early release of Superannuation.

    Information on the demographics of callers will be shared with members out of session.

    Communications

    In response to the current COVID-19 situation in Victoria, the ATO has recently:

    • issued a letter (via email) to all tax professionals based in Victoria, or who have clients in Victoria, offering recognition and support of the current circumstances due to continuing COVID-19 restrictions
    • published a tax professionals newsroom article reiterating the support available to the broader tax professional community.

    Tax professional’s newsletter

    This week’s newsletter will include articles on:

    Articles in development

    Tax time

    • Updated employees guide for work expenses – Includes information on the shortcut method for work from home expenses and deductibility of protective items.
    • 2020 Tax Time Toolkits – encouraging agents to bookmark and share the resources with their clients.

    Other

    • Top 1000 & Top 100 GST assurance program - Prepare for engagements by requesting our new GST Governance, Data Testing and Transaction Testing guide.
    • Exposure draft released for Foreign Investment Reforms Bill 2020 – public consultation open.

    Individual communications

    • Help and Support video message for those who continue to be impacted by COVID-19 posted to our social media channels last week.
    • Social media on WRE/Occupations/Rentals – specifically office workers, construction workers, those working from home and those with rental properties.

    Small business communications

    • Social media on PAYG Withholding deductions

    Cash flow boost stimulus measure

    The ATO has contacted a small number of cash flow boost recipients where out of pattern behaviour has been observed, or unusual amounts are recorded in activity statements in the salary and wages amounts or PAYG withholding. In response, a number of taxpayers have amended activity statements, correcting errors that have occurred.

    A small number of cases have amended amounts listed in salary and wages, reducing these numbers by minimal amounts such as $1. This sort of behaviour does attract attention and the ATO will be following this up further. The overall response has been pleasing, with people forthcoming and correcting errors.

    The ATO will continue to work with those who may have been refunded amounts that need to be repaid.

    JobKeeper update

    On Friday 7 August, the Prime Minister issued a Media Release External Link regarding changes to JobKeeper 1 and 2.

    Key adjustments include:

    • A change to the employee reference date - from 3 August 2020, the relevant date of employment for an eligible employee will move from 1 March to 1 July 2020, expanding employee eligibility.
    • A change to the turnover reference period - to be eligible for JobKeeper post 28 September 2020, organisations will only have to demonstrate that their actual turnovers have significantly declined in the previous quarter.

    As a result, organisations that are able to demonstrate a significant decline in turnover in the September 2020 quarter will be able to access the JobKeeper extension in the December quarter. An organisation able to demonstrate the requisite decline in turnover in the December 2020 quarter would be able to access the JobKeeper extension in the March 2021 quarter.

    Tips and links

    • If your business makes a loss in an income year, you can carry forward that loss and may be able to claim a deduction for it in a future year.
    • Interest on a loan for a rental property is deductible in the year it is incurred. Some lenders have introduced arrangements where their customers impacted by COVID-19 can elect not to make mortgage payments for a period of time, and any interest that is unpaid is capitalised. A taxpayer who enters this type of arrangement can still claim the interest amount in the financial year it is incurred, even though the interest amount now forms part of the loan capital. See our COVID-19 page on Residential rental property for more details.
    • If you have been working in an occupation that requires physical contact or close proximity with customers or clients during the COVID-19 period, you may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if you have paid for the items and haven't been reimbursed.
    • We understand that due to COVID-19, a trustee may experience liquidity issues which may affect its ability to satisfy a beneficiary's entitlement. This may happen where financial institutions impose restrictions that affect the way a trustee can deal with its assets.

    Next meeting date

    The next Tax Practitioner Stewardship Group Tax time 2020 meeting will be held on Tuesday 25 August.

    Last modified: 18 Aug 2020QC 63434