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  • Tax Time update – 3 August 2021

    COVID-19 government grants and payments

    • Discussion was held regarding the recently introduced Treasury Laws Amendment (COVID-19 Economic Response No. 2) Bill 2021External Link making the tax treatment of COVID-19 disaster payments non-assessable non-exempt (NANE).
    • Members provided their initial observations and raised potential issues and impacts, particularly as a result of the retrospective application of the measure to payments made in the 2020-21 income year that may have already been included in processed tax returns.
    • The ATO confirmed it is aware of the impact of retrospective application, particularly for those taxpayers who have already lodged and received their 2020-21 income tax assessments.
    • Once the proposed amendments become law our focus will be to make the amendment process as straight forward as possible, and we’ll work with Services Australia to do that.
    • The ATO also noted that not all payments made by Services Australia can be pre-filled, and that the COVID-19 disaster payments made in the 2020-21 income year were not pre-filled into returns.
    • The ATO captured specific areas and technical aspects raised by members and will use this to inform guidance material that may be required.

    Key themes raised included the:

    • impact of making the payment NANE on other payments such as child support and family tax benefit (FTB) administered by other government departments
    • impact on whether previously claimed deductions were now allowable if connected to business income that is now made NANE when it was previously assessable
    • impact on franking account balances and potential for over-franking to have now occurred given retrospective nature of the proposed amendment.

    Service delivery

    No significant changes from the previous week, call volumes have been consistent, wait times are well within standard.

    ATO systems

    Performance across all ATO channels is good. No issues to report with the exception of some minor system degradation for online services on Monday 2 August for a very short period of time, which was quickly remediated.

    Communications

    Key updates

    COVID-19 disaster payments

    The ATO website was updated today acknowledging the government’s stated intention that the COVID-19 disaster payments are non-taxable. If this becomes law, there will be further updates to web content and communications distributed to tax professionals and the general community with more detail on what this means.

    This week’s focus is on pre-fill availability and the best time to lodge. Media is planned for capital gains tax as well as a lodgment media release (covering pre-fill).

    • Other topics of focus this week include
      • social media promoting the Investors toolkit to rental property owners
      • a media release reminding property investors to beware of common tax traps that can delay refunds
      • personal services income, motor vehicle expenses, concessions and claiming deductions for PAYGW payments for small business
      • the ato.gov.au/bounceback economic stimulus measures advertising campaign, raising awareness about measures that might be available to small business.
       

    Small business

    The Business Portal was retired over the weekend.

    The ato.gov.au COVID-19 landing page directs you to further detailed content, which is being updated within hours of the information being received by the ATO. The landing page may not show a current ‘modified content’ date and that the best way to access the updates is by using the ‘What’s new’ and ‘subscribe’ functions.

    Debt and lodgment

    Firmer action campaigns have been suspended for areas of NSW impacted by the lock down. The ATO will continue to monitor emerging impacted areas and respond accordingly.

    Member issues / open discussion

    A member raised an issue where a client had been advised by ATO staff to attend a site to produce documentation. The client was impacted by COVID-19 restrictions and was not able to achieve this. The issue was to be explored further with the member to understand the circumstances so as to ensure that our staff adhere to expectations outlined to be considerate of those circumstances.

    Member discussion was held regarding the annual lodgment performance letter recently issued to agents. Members reported a mixed sentiment and response within the practitioner community.

    The ATO advised members the letter was intended for information purposes only and as a way to recognise the effort practitioners had gone to in meeting the benchmark during these difficult times and acknowledged the feedback and examples provided by members.

    Tips and links

    Next meeting date

    The next Tax Practitioner Stewardship Group Tax time 2021 meeting will be held on Tuesday 10 August.

    Last modified: 09 Aug 2021QC 66571