BSI Accounting

Boosting cash flow for employers:

Small and medium-sized businesses and not-for-profit entities, with an aggregated annual turnover of less than $50 million (usually based on their prior year’s turnover) that employ people, may be eligible to receive a total payment of up to $100,000 (with a minimum total payment of $20,000), based on their PAYG withholding obligations, in the following two stages:

(a) Stage 1 payment–Commencing from the lodgment of activity statements from 28 April 2020,eligible employers that withhold PAYG tax on their employees’ salary and wages will receive a tax-free payment equal to 100% of the amount withheld, up to a maximum of $50,000. Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax.

The tax-free payment will broadly be calculated and paid by the ATO as an automatic credit to an employer, upon the lodgment of activity statements from 28 April 2020, with any resulting refund being paid to the employer.This means that:

• quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020and June 2020; and

• monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. However, the payment for the March 2020 activity statement will be calculated as being three times the actual amount withheld.

Note that, the minimum payment of $10,000 will be applied to an entity’s first activity statement lodgment (whether for the month of March or the March quarter) from 28 April 2020.

(b) Stage 2 payment–For employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows:

• Quarterly lodgerswill be eligible to receive the additional payment for the quarters ending June 2020 and September 2020, with each payment beingequal to 50% of their total initial (or Stage 1) payment(up to a maximum of $50,000).

• Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 activity statement lodgements, with each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000).

The ATO will automatically calculate and pay the additional (tax-free) payment as a credit to an employer upon the lodgment of their activity statements from July 2020, with any resulting refund being paid to the employer.

Scammers impersonate ATO phone
numbers

The ATO is warning that scammers have adopted
‘Robocall’ technology to target taxpayers across
the country.

Assistant Commissioner Gavin Siebert said:
“Scammers are sending pre-recorded messages
in record numbers and are manipulating caller
identification so that your phone displays a
legitimate ATO phone number despite coming from
an overseas scammer”.

“If the scammers do make contact, they will request
payment of a tax debt – usually through unusual
methods like bitcoin, gift cards and vouchers.
Legitimate ways to pay your tax debt are listed
on our website. The scammers will threaten you
with immediate arrest, attempt to keep you on the
line until payment is made and may become rude
or aggressive.”

The technique of displaying misleading phone
numbers is known as “spoofing” and is commonly
used by scammers in an attempt to make their
interactions with taxpayers appear legitimate.

Christmas party 2018

The Financial Services Council (FSC) has criticised the premise the Labor Party has used from a government expenditure perspective to justify its proposed policy of banning imputation credit refunds for certain retirees in its submission to the House of Representatives Standing Committee on Economics inquiry on the matter.

“Some participants in this debate argue that refunds are a subsidy or make the tax system non-neutral. The FSC does not agree with this view,” FSC economics and tax senior policy manager Michael Potter told the committee.

“Franking credit refunds to super funds and individuals are not specifically listed as a tax expenditure in Treasury’s annual tax expenditure statement.

“This suggests franking credit refunds are not a subsidy, tax concession or loophole.”

Potter also argued the refunding of imputation credits ensured parity and fairness for all Australian taxpayers.

“Refunds ensure everyone pays the same total tax at their own tax rate even when they’re at a zero tax rate. Here by total tax rate we mean the sum of personal and company tax,” he said.

“Changes to refunds would mean that some investors, specifically those with lower tax rates, would pay a higher total tax on some investments, specifically shares, which creates an uneven or non-neutral playing field.”

The FSC also put forward that members of large super funds would also feel the effects of this proposed policy, not just those belonging to SMSFs.

“Others participating in this debate to discuss this issue said the members of large super funds are largely or completely unaffected by any change to franking credit refunds,” Potter said.

“However, the official figures and our own survey results show this view is not correct. In fact, there could potentially be millions of Australians benefiting from franking credit refunds through membership of large super funds.”

According to Potter, the FSC survey of 14 large super funds receiving franking credit refunds involving 331,000 member accounts gave a better indication of which superannuants were benefiting from the current policy.

“Many of the surveyed funds had low average balances, indicating that refunds were likely benefiting numerous people who are not wealthy,” he said.

Editor:Darin Tyson-Chan