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TRANSCRIPT
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Updates-JobKeeper-Stimulus
ICB Technical Webinar
Friday 24th April 202012.30pm Start
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Your Presenters
Matthew AddisonExecutive Director
Leanne BerryTechnical Resources
and Support
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§ Indicative Agenda Follows
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§ If you’re unable to hear, check your PC/Mac speakers
§ Sound will run through your computer speakers
§ During the presentation you will be muted to avoid background noise
Housekeeping
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Changing Audio
§ Select ‘computer’ or ‘phone call’ audio option as you sign in
§ Changing audio options is available by selectingnext to the microphone
§ Select audio options to change from computer to phone
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§ At stages during the presentation we will stop for questions
§ You can ask questions during the presentation by using the Q&A facility (PLEASE DO NOT USE THE CHAT)
§ We are unable to interact with participants verbally
§ Today we will not be using the ‘raise hand’ option
§ We would still like you to type questions so we can record for our Q&A email
Housekeeping
Q&A
Chat
RaiseHand
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JK Process explained – 17th April
Basics explained – Stimulus 1 & 2 – Webinar Library
Icb.org.au/Covid-19 & /Covid-19/Jobkeeper
ATO in operation
Todays Session
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§ Wait until we have discussed the topic – Agenda follow§ Use the topic #tags
⁃ #JobKeeper
⁃ #JobKeeperHR
⁃ #CashBoost
⁃ #Other
Asking Questions
Q&A
Chat
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§ 30th April: pay employees $3000 for any Subsidy eligible e’ees (FN01) or $1500 for FN02
§ 10th May: must have paid employees $1500 for FN03
§ 24th May: must have paid employees $1500 for FN03
§ 31st May: must enroll employer for any April claims
Deadlines
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What is our time Frame?
What When How
Clients informed Now Client Letter
Assess Entity Eligibility ASAP Process #3
Assess Employees ASAP Process #4 & #5
Enrol Entity NOW ATO Online
For April Subsidy up until May 31st
Provide E’eeNomination Forms
Before paying them
Set up Payroll Before 5th May
Pay employees for Aprilto get
Must be paid by 30thApril
Pay employees & Report
Ongoing
Monthly Report After 4th May
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§ Are you eligible§ Have you got a nomination form?§ Then pay
Should I pay the employee
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§ Engaged to help with JK (in template letter)➤ Evaluate➤ Set up payroll
§ To lodge the Enrolment Form (Part of Template)§ Payroll – as per normal (STP Declarations§ Monthly Report (not yet)
Declarations
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§ Evaluate§ Enrol§ Employee Nomination Forms§ Set up payroll§ Pay $3k each by 30th April
April to do
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§ Notify ATO – monthly report for April⁃ No of employees⁃ Last months turnover⁃ Next months turnover⁃ (if not in STP) Confirm employee payments
§ Pay $1500 per fortnight per employee§ Receive April subsidy
May to do
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§ Employment Innovations§ https://www.employmentinnovations.com/blog/guide-
to-giving-jobkeeper-enabling-directions/
HR management
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§ https://thesector.com.au/2020/04/22/breaking-new-ato-rules-see-ecec-services-jobkeeper-eligible-regardless-of-revenue/
Early Child Care
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§ Refuses a JK enabling Direction⁃ Reduction in hours⁃ Change of Job Duties and Location⁃ Take Annual leave
§ Employer – review normal award provisions⁃ Disciplinary action⁃ Notices⁃ Dismissal
Refuses to Work
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§ Eligible Business Participant (Sole Trader, Beneficiaries, Directors)
§ If a director/beneficiary is on Payroll ➤ eligible for normal JobKeeper
§ If registering as a EBP➤ The entity will receive the money➤ You don’t have to pay it to the nominated business person
EBP not on payroll
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q In Business as of 1 March 2020qHas an ABNqMade a supply since 1/7/18
q Lodged 2019 tax returnq Lodged BAS since 1/7/18q Other proof
qHas at least one eligible recipientq Employee &/orq Self Employed orq Working Partner, Shareholder, Beneficiary
Entity Eligibility – In Business
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§ An Eligible Business Participant➤ Person who is not on payroll but works in the business
§ The Business Entity must comply➤ Have an Eligible Business Participant➤ Have an ABN as of 12 March 2020➤ Carried on a business as of 1 March 2020
• 2019 tax return lodged• Activity statement since 1/7/18• If haven’t lodged then need to lodge (ATO)
➤ Decline in turnover
Sole Trader/ Trusts / Partnerships / Companies
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§ This form is for you to notify us of your intent to claim &
§ Confirm financial institution details
§ If you must amend – ring them⁃ We understand there is an online amendment being
developed⁃ Wrong bank account – ring them 1800 700 724 (Agents)
Business
What is enrolment
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§ Form says “Month” – nominate which month you are wanting to start jobkeeper
§ It doesn’t mean you can only select a month for decline in turnover test
The Form
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§ Online Services forms say 30th April & 4th May§ Software companies have been told 31st May§ ATO conversations have been 31st May
When to enrol
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§ ATO Website§ https://www.ato.gov.au/General/JobKeeper-
Payment/In-detail/Applying-the-turnover-test/?anchor=Basictest#Basictest
Cash or Accrual
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Options for reporting1. Accrual is the Law and can be used, or2. BAS on a cash you can use cash
Cash or Accrual
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§ For qualification from the start of the scheme, (April)§ the turnover month used can be either March 2020 or April 2020. § To qualify at a later time, the turnover month can also be May, June,
July, August or September 2020, ⁃ provided that the turnover month is the month in which the first fortnight for which you
claim the JobKeeper payment ends, or another earlier month.
§ In other words, you will only be eligible for JobKeeper payments for JobKeeper fortnights that end on or after your turnover test period starts.⁃ If turnover for a quarter is being used, it can be the quarter:⁃ 1 April 2020 to 30 June 2020⁃ 1 July 2020 to 30 September 2020, but only if first seeking to qualify for fortnights
ending in July 2020 or later.
Which Month
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§ The ATO has published some useful guidelines about preparing projected figures as well, saying firms should consider:
§ Whether the business is expected to trade during its nominated period due to coronavirus;
§ Whether the business is subject to coronavirus trading restrictions;§ Recent patterns in trading that are expected to continue; and§ Revised business plans.§ Projections can point to conditions that are not directly coronavirus
related.§ SmartCompany – article (unsubstantiated)
Projecting
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Entity Eligibility – Decline in Turnover
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www.business.gov.au
§ The JK Payment is available to eligible employers, businesses including companies, partnerships, trusts and sole traders, not-for-profits and charities
§ The intent of the JK Payment is to enable any eligible self-employed person to get a wage subsidy regardless of what business structure they use
Who is a business?
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⁃ the partners in a partnership only receive a share of profits – one
partner can be nominated to “receive” it
⁃ directors of a company only “receive” dividends – one direct can be
nominated to receive it
⁃ beneficiaries of a trust only “receive” distributions – one individual
beneficiary (i.e. not a corporate beneficiary) can be nominated to
receive it
Who is a business?
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§ Employers will be eligible for the subsidy if: ⁃ their business has a turnover of less than $1 billion and
their turnover has fallen by more than 30% (of at least a
month)
⁃ their business has a turnover of $1 billion or more and
their turnover has fallen by more than 50% (of at least a
month)
⁃ the business is not subject to the Major Bank Levy
Eligibility – Decline in Turnover
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§ Basic Tests first⁃ Month of March 2020 vs March 2019⁃ Quarter ended March 2020 vs Qtr March 2019⁃ Month of April vs April 2019 (Actual or Projected)⁃ Quarter (April to June) vs 2019ATO Allow the same basis as your BASLaw also states GST Turnover which is value of supplies in the period ie Accruals. (ATO acknowledged & include in guides)
§ Alternate Tests
Tests
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1. This Year vs Last Year§ Turnover has fallen in the relevant month or 3 months
(depending on the natural BAS/IAS reporting period of the business) relative to turnover a year earlier
2. Other§ The Tax Commissioner will have discretion to consider
additional information provided to establish adverse affects by the impacts of the Coronavirus
30%/50% - How do we prove that?
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§ Other:➤ New business trading less than 12 months
➤ Acquired business with little trading history
➤ Seasonal business with fluctuating turnover
➤ Business with highly variable turnover
§ ATO will have discretion to set out alternative tests for specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations)
§ Tolerance where turnover actually experience a slightly smaller fall
30%/50% - How do we prove that?
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§ Projected turnover month or quarter§ Compare to Average turnover since start of
Business, or§ Compare to previous 3 months
Alternate Tests #1Commenced since 1/3/19
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§ Compare projected to§ The same business structure§ For the same period
Test #2 & #3Acquired, Disposed or Restructured
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§ If Turnover has increased by⁃ 50% over the 12 months⁃ 25% in the 6 months prior to testing⁃ 12.5% in the 3 months to testing
§ Which month are you projecting§ Compare it to the Average of the previous 3 months
Test #4Increase in Turnover
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§ If 2019 was impacted§ Compare 2020 to 2018 (Prior year to impacted)
Test #5Drought, Bushfires etc impact 2019
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§ This is not seasonal businesses⁃ Seasons compare to seasons
§ Lumpy or project based income§ Compare projected period to average for previous
12 months
Test #6Non Cyclical Businesses
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§ Eligible Business Participant (sole trader, partner, beneficiary)
§ Had an interruption in their income generation(Sick, leave – unable to earn income last year)
§ Compare to the month they returned to work
Test #7Interruption for a EBP
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§ Reasonable and Realistic opinion
§ Business turnover has or will decline by %⁃ 30% under $1b GST Turnover⁃ 50% over $1b GST Turnover⁃ 15% ACNC Registered Charity
Entity Eligibility – Decline in Turnover
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Entity Eligibility – Decline in Turnover
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Entity Eligibility – Decline in Turnover
March 2020
80,000 “A”100,000 “B”
B-A= 20000 “C”
C / B = 20%
Not Eligible
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Entity Eligibility – Decline in Turnover
April 2020-projected
30,000 “A”100,000 “B”
B-A= 70000 “C”
C / B = 70%
Eligible
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Entity Eligibility – GST Turnover
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Your GST turnover is your total business income (not your profit), minusany:§ GST included in sales to your customers§ sales that aren't for payment and aren't taxable§ sales not connected with an enterprise you run§ input-taxed sales you make§ sales not connected with Australia.An entity does NOT have to be registered for GST in order for JK to apply.
Entity Eligibility – GST Turnover
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Projected TurnoverExplanatory statements provides: Projected GST turnover includes § the value of all the supplies that an entity has made or is likely to
make in the period. § A supply is likely to be made where, on the balance of
probabilities, § it can be predicted that the supply is more likely than not to be made. § must be based on a reasonable expectation and considered in the
context of the facts and circumstances of a particular business, such as by reference to the terms of a particular contract which requires supplies to be made in a certain period.
Entity Eligibility – GST Turnover
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§ #Cash or Accrual§ NOTE: we can see nothing that implies this has to be calculated on
a cash basis nor stated that it has to be calculated on an accrual basis.
§ We expect in the first instance the GST turnover should be calculated on the same basis as a BAS is prepared.
§ A variation from Cash prepared BAS to using an Accrual basis for the Decline in Turnover Test would have to be justified on a reasonable basis.
Entity Eligibility – GST Turnover
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§ Only one successful test§ The decline in turnover test needs to be satisfied before an entity
becomes eligible for the JobKeeper payment. Once this occurs there is no requirement to retest in later months.
§ Decline in turnover later than April§ If an entity does not qualify for the month of April 2020 because its
turnover has not been sufficiently affected, § it can test in later months to determine if the test is met. § This allows entities that only become affected part way through the
six month period of operation of the JobKeeper scheme to continue to monitor for any decline in turnover until they qualify for the scheme in a later period.
Entity Eligibility – Decline in turnover
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Entity Eligibility – Decline in Turnover
q One of: Decline in Turnover whenqMonth / Quarter March 2020 vs March 2019qProjected April / May / June etc vs 2019qProjected Quarter April-June etc vs 2019
orq Alternate Test
qNew BusinessqGrowthqShut DownqMonth by Month P&L - trend
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§ Must pay amounts of $1500 or more to the employee in the fortnight.§ Includes: salary, wages, commission, bonus or allowances (before
tax is withheld)§ Includes amounts that have been salary sacrificed into
superannuation§ Includes other salary sacrifice arrangements.§ Pay periods can be weekly which are then allocated to the fortnight§ or monthly which can be allocated to a fortnight in a reasonable
manner i.e. apportioned§ It is about the employee receiving payment (or an attribution of
monthly payment) within each fortnight.
Entity Eligibility – Wage Condition
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§ When do I have to pay?§ For the first two fortnights (30 March – 12 April, 13 April – 26 April),
provided it is paid by you by the end of April. § This means that you can make two fortnightly payments of at least
$1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April.
§ paid during each JobKeeper payment period.§ You cannot claim the JobKeeper payment in advance. The
JobKeeper payment is a reimbursement from us to an employer in arrears, and cannot be paid in advance in any circumstances.
Entity Eligibility – Wage Condition
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Entity Eligibility – Wage Condition
Payment date Amount per employeeMay $3,000 (for fortnights starting 30 March and 13 April)June $3,000 (for fortnights starting 27 April and 11 May)July $3,000 (for fortnights starting 25 May and 8 June)August $3,000 (for fortnights starting 22 June and 6 July)September $4,500 (for fortnights starting 20 July, 3 August and 17 August)October $3,000 (for fortnights starting 31 August and 14 September)
How much to Pay!An employer will usually get $3,000 a month per eligible employee for the two fortnightly periods in that month.Example of amounts paid to employers
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(2)* However, an entity does not qualify for the JK scheme at a time if:(a) an amount of levy under the Major Bank Levy Act 2017(b) the entity is an Australian government agency; or(c) the entity is a local governing body; or(d) the entity is wholly owned by above(e) the entity is a sovereign entity; or(f) if the entity is a company—a liquidator or provisional
liquidator has been appointed in relation to the company; or(g) if the entity is an individual—a trustee in bankruptcy has
been appointed to the individual’s property.
Entity Eligibility – Ineligible
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For charities § registered with the Australian Charities and Not-for-
profits Commission (ACNC) § they will be eligible for the subsidy if § they estimate their turnover has fallen or will likely
fall by 15% or more relative to a comparable period
ACNC and 15% turnover change
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Once you are in you are inMust have an eligible recipientSTP: Must report payments to employeesMonthly must report: § Actual Turnover, § Projected Next month Turnover§ No of Eligible Employees
Remaining Eligible
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q Decline in Turnoverq Not Ineligibleq Wage Condition
qPay within each fortnight********q Monthly gets apportionedq Pay $1500 per fortnight – you cannot low pay ftn1 and topup ftn2
Entity Eligibility – T/O Decline & Pay
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§ ATO errors
§ https://www.ato.gov.au/General/online-services/technical-support/troubleshooting-for-businesses-and-tax-practitioners/
Status
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§ Assessing the Eligibility of the Employer 15 to 30 mins*⁃ (Decline in turnover)
§ Enrolling Employer with the ATO 3 mins
Time to Enrol
Poll Question
How long to Prepare and Enrol
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§ Decline in Turnover Test§ Declarations§ Employees offered and Nomination Forms§ Normal Payroll§ Monthly Reports evidence
Record Keeping
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§ https://www.ausbanking.org.au/banks-bolster-efforts-to-help-businesses-bridge-the-gap-to-jobkeeper/
Banks
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Banks
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Banks
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§ CBA: 13 26 07§ ANZ: 1800 571 123§ NAB: 1800 JOBKEEPER§ Westpac: Westpac 1300 731 073 / St George 1300
730 196 / Bank of Melbourne 1300 784 873 / Bank SA 1300 669 472
§ JobKeeper Tag – priority top of the queue§ Take the JobKeeper enrolment receipt to the bank
Bank Hot Line Numbers
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Employee EligibilityNew
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Employee Eligibility
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Employees
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Employees
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Employer Declaration
ATO JobKeeper Employee Nomination Form
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Employee must nominate
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Eligible Employees
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§ Each eligible employee as of 1 March
§ Full-time, part-time, long-term (more than 12 months) Casuals
§ Includes those employees that have been stood down.
§ Are at least 16 years of age
§ Eligible employees must NOT be receiving JK payments from another employer.
Eligibility - Employees
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§ Includes those Employees that are “re-engaged” by a business that was their employer on 1 March, 2020(If you terminated and paid out the employee, the employer would now need to re-engage the employee to facilitate the JK payments and to facilitate their re-employment during and after the COVID-19 period)
§ An Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
Eligibility - Employees
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§ Employers can register their interest to receive the communication about applying for the JK Payment https://www.ato.gov.au/general/gen/JobKeeper-payment/⁃ Seek client permission to register⁃ only 1 registration required for each contact point
§ SMS Updates will confirm the registration to keep employers informed
§ Soon: eligible employers will be able to apply for the scheme by means of an online application – not yet available
Employer Actions1. Information Request Process
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§ Information to Employees
§ www.icb.org.au/covid-19/jobkeeper
Employer Actions2. Prepare
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§ Information to Employees
§ Assess that they have or will experience turnover decline.
§ Provide information to the ATO on eligible employees➤ Not yet available➤ This includes information on the number of eligible employees engaged as at 1
March 2020 and those currently employed by the business (including those stood down or rehired)
➤ For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business
Employer Actions2. Prepare
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§ There is no Superannuation Guarantee amount on the Government supported component
⁃ If employee is currently receiving less than $1500 then super is liable on this amount but NOT the extra amount up to $1500
⁃ If paying above $1500 then super is liable on the whole amount
§ Therefore Super does not apply to amounts that you were not going to pay if you had not been receiving the JK Payment
Employer Actions3. Do Employers pay Super
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§ Ensure that each eligible employee receives at least $1,500 per fortnight (before PAYGW)
⁃ For employees that were already receiving this amount from the employer they will continue to receive their regular income according to their prevailing workplace arrangements
⁃ For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500 per fortnight, before PAYGW
⁃ For those employees earning more than this amount, the employer is able to provide them with a top-up (Govt Payment of $1,500 will support the employer)
Employer Actions3. Employers pay at least $1500
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§ Employees will receive a notification from their employer that they are receiving the JK Payment
§ Only one employer can be paying them JK amounts
§ Employees currently in receipt of, or have applied for, an income support payment should advise Services Australia (Centrelink) of their change in circumstances online at my.gov.au or by telephone
§ If not an Australian citizen: must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee
Employee Actions
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§ Employees that have multiple employers must notify ONE employer as their primary employer. Inform others
⁃ Only one employer will be eligible to receive the JK payment for each individual (ICB Submitted this is an employee obligation)
§ The claiming of the tax free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer
§ Income from other employers does not affect the entitlement
Multiple Employers
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§ Payments will be made to eligible business monthly in Arrears
§ Super is at the discretion of the employer on any additional payments made to the employee as a result of JK payments
§ Normal PAYG conditions apply as do normal deductions such as Child Support
§ Government expects SME to fund 1st month from 30 March – could be a facility from Banks or other funds
Payments
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Payments
Date Action1st April or after Pay employees
28th April or after Lodge March BAS28th April & after March BAS lodged Receive Cash Boost PAYGW Credit
(Minimum $10k)
1st May Receive JK Payment
Cash Gap? Government supported loan facility (timing)
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§ JK Receipts⁃ Special Income (Assessable, No GST)
§ Paying Employees⁃ Today
➤ Normal Payroll (we have no different requirement)⁃ Probably
➤ Normal Payroll (for the amount you would have normally paid)➤ New Payroll Category (for the amount above what they normally would have
received)⁃ No super on the extra amount⁃ Included on End of Year Income Statements
Bookkeeper Process
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§ As per normal⁃ If topping up pay to increase to $1500
➤A new wage category➤No SGC (on any additional payment)➤Assigned to Gross Payments for STP – or perhaps a
new STP category which will then enable ATO data matching and reconciliation
➤Normal PAYGW Rules➤Normal deductions for Child Support etc.
§ We don’t have the detail➤It may change
§ Pay employee
Payroll Process
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§ If business is going to “enroll” or “monthly report”§ They need myGovIDhttps://www.icb.org.au/Resources/Digital-for-Business/myGovID
Business Need myGovID
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Implementation Steps
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Implementation Steps
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Your Informationwww.icb.org.au/covid-19/jobkeeper
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Employee EligibilityNew
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How to PayNew
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How to Pay
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A JobKeeper Fortnight
§ A payment made in each fortnight§ Weekly is ok§ Monthly is ok§ Must pay them for the subsidy
After 30th March
How to Pay
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§ Pay the employees through payroll
§ Any “extra” pay up to the $1500 has no SG⁃ Different payroll category
§ Report through STP
§ There will be an alternative reporting system
Payments to employees is normal payroll
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§ If they work = ordinary hours= Super applies for Hours worked= Leave applies for Hours worked
§ If they are stood down and not working= Super does not= Leave does
Super & Entitlements
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§ If on full workers compensation, then no JK§ If part wages from employer, then JK
§ We expect Workers Compensation premiums will be payable⁃ For the hours worked component⁃ NOT for the topup
Workers Compensation
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Paid Leave§ Employer receives JK§ Top up employee to $1500 (where applicable)
Unpaid Leave§ Becomes eligible for JK
PPL§ Remain on PPL until return to work
On Leave
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§ $1500 applies§ Unless they have permanent employment elsewhere§ Long term regular systematic
§ If they nominate the employer
§ If employer doesn’t register until later?
Casual Employees
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§ Increased Wages§ Increased Payroll§ Increased Workers Compensation§ Increased Super
§ Where does the cash come from?§ What about accrual of Leave?
Cash Gap
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How to Pay - Software
https://www.icb.org.au/covid-19/jobkeeper/software
GovReports
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§ Definitely become eligible§ Turnover drop§ Alternative registration process
Self Employed
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§ Can a sole trader receive JobKeeper payments when they are also an employee of another business? No. An eligible business participant cannot be an employee (other than a casual employee) of another entity. If the sole trader is both a long term casual employee of another business and also an eligible sole trader, they can choose to either let their employer claim the JobKeeperpayments on their behalf, or they can claim as a sole trader, but not both. ATO website
Self Employed
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If individual was employed by the entity as of 1 March 2020: they are employees – JK applies§ If not: then only one recipient
Partnerships§ Current: Only one Partner
Trusts / Partnerships / Directors
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How to record JK Receipt
Don’t Reconcile - its not PPL
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Implementation Steps
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Your Informationwww.icb.org.au/covid-19
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Stay in touch
• www.icb.org.au- Home page news items- /COVID-19
• Facebook GroupICB Australia Support & Discussion
• ICB App- News
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Next Week
Webinar ScheduleFri 1st May Updates & the Monthly Report
Resourceswww.icb.org.au/covid-19/jobkeeper
www.icb.org.au/covid-19
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A time like no other
We help Business
Everyone is in the same boat
Together we achieve
Perspective
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ICB can provide explanation and guidance on JobKeeper
ICB cannot interpret every businesses circumstances
Your Role & Our Role
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BAS Agents Can do
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Yes
Can BAS Agents do this work?
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§ BAS agents can now legally support Australian businesses by advising about their entitlements under the new JobKeeper Payment and Cashflow support for business initiatives.
§ TPB Chair, Ian Klug AM, said the legislative instrument makes it clear that BAS agents can lawfully advise on the JobKeeperPayments and on the Cashflow support for business.
§ ‘This reflects a sensible and appropriate outcome to support the Government’s initiatives,’ Mr Klug said.
§ ‘The TPB is working to support the extraordinary efforts of all registered tax practitioners acting professionally and ethically to assist Australian workers and businesses, especially in understanding these stimulus entitlements.’
Can BAS Agents do this work?
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The role of a bookkeeper with the businesses for JobKeeper et al, is no different to the level of your role and responsibility when preparing a BAS or running a payroll. The Business is ultimately responsible and must be engaged, consent and declare what is being stated to the ATO.In relation to all areas of that client you must still:a) Act honestly and with integrityb) Act lawfully in the best interest of your client (generally)c) Act lawfully in the best interest of your client over any personal
interest you may have in that client or their business affairs (be and act independent)
Can BAS Agents do this work?
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In relation to all areas of that client you must still:d) Advise the client of their rights and obligations of the relevant tax
laws that are materially related to the work you are doingIn relation to the areas that you HAVE been engaged to perform work then you must:e) Have and provide competent servicef ) Have knowledge and skillsg) Take reasonable care to ascertain/understand the clients relevant state of affairsh) Take reasonable care to ensure tax laws are applied correctlyi) Advise the client of their rights and obligations of the relevant tax laws
Can BAS Agents do this work?
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What does that mean- What are you engaged to do- Perform the work- Client must make Declarations to you
- Provided all information to enable you to prepare a true and correct statement- Authorise you to lodge
Design a SystemCertify the system worksLodge
Can BAS Agents do this work?
……3
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Declarations
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§ Engaged to help with JK⁃ Evaluate⁃ Set up payroll
§ To lodge the Enrolment Form§ Payroll – as per normal§ Monthly Report
Declarations
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§ Example of a declaration§ I, (name of business client) authorise (name of agent) to give
JobKeeper enrolment information and ongoing reporting information to the Commissioner of Taxation for (entity name).
§ I declare that the information provided for the preparation of these forms will be true and correct and complete
§ I am authorised to make this declaration.§ [Insert for emailed declaration] Type full name and date§ [Insert for paper declaration] Signed: Date:
Declarations
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ATO requires for any form lodged§ The client declaration must state both that:⁃ they have authorised you to lodge the document⁃ the information is true and correct.
Your client can choose to provide this declaration by email, fax or in paper form.
Declarations
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Schemes
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§ Self Assessment & Declaration
§ There will be a positive obligation on employers to establish their eligibility and that of their employees.
§ The ATO will cross-check payments and undertake activities to identify multiple or ineligible payments to individuals.
Compliance
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§ In the current environment there is a risk of misconduct if tax practitioners defraud the stimulus package, intentionally or unintentionally.
§ ‘We recognise and appreciate that most tax practitioners do the right thing but where the TPB identifies a serious risk to clients, the public or to revenue, we will act to support the public interest.
§ 'As always, we expect tax practitioners to work in a way that maintains the integrity of the profession and of the taxation system.’
TPB works with ATO and tax profession to address emerging COVID-19 relief issues
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§ The TPB have established a hotline (1300 362 829) and mailbox to enable tax practitioners to advise the TPB in confidence if they see misconduct occurring.
§ ‘The bottom line is that we want to ensure that those clients of tax practitioner services who are genuinely eligible for government relief are provided with it as quickly as possible, to safeguard the economy at this critical time.’
TPB works with ATO and tax profession to address emerging COVID-19 relief issues
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A joint statement from the TPB & the ATO goes on to say:§ Some advisors may be grappling with the tax consequences
associated with the stimulus payments and wondering what will attract our attention. We also know that some businesses are already making changes to their business structures and employment arrangements following the stimulus announcements.
§ We ask that tax agents and businesses be mindful that it is not acceptable to backdate or artificially change a business structure or employment arrangements, including changing the characterisation of payments, in order to obtain a benefit or payment that would not otherwise have been paid. The ATO and TPB will take firm and swift action should this be the case.
Do Not Defraud the System
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A business (or their representative) will not be entitled to cash flow boosts if they have entered into or carried out a scheme for the purpose of:§ becoming entitled to cash flow boosts when otherwise not entitledor§ increasing the amount of the cash flow boosts
This may include restructuring the business or the way wages are usually paid to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount
Schemes
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Any sudden changes to the characterisation of payments made may cause the ATO to investigate whether the payments are in fact wages
If the payments are wages, the ATO may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made.
There may also have FBT obligations that have not yet been met
Schemes
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Q: Client requests payroll restructuring / additions / re-characterisations that are not illegal (normally) but are timed to increase participation in the stimulus package
A: If it is only timing i.e. June vs March: no issue for CashBoostIf it is backdating employment relationship then NO!
Q: What to do if we have already processed these for clients?
A: Keep records of instructions in writing
Your Questions: Schemes
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1. Client normally pays his wife at the end of the financial year. Changed to register for PAYG from 1 Jan and put wife on the books from 1 Jan 2020, with net pays going to drawings
2. Client bring forward regular payrise to themselves, or bonus payment, thus increasing PAYG
3. Client took drawings in say Feb/March, then recharacterised these as net wages, and grossed up through the payroll system with PAYG
4. So in all these cases I wouldn't normally blink an eye, we just do it (and we have) but now I'm worried about the ATO warnings.
5. Hoping for some more detailed advice on what to do if the client instructs us to implement a legal change, but one that falls under the "schemes" (or one that we are not sure about, or one that we have already done).
Your Questions: Schemes
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