ATO has recently announced that it will implement a series of administrative measures to assist taxpayers experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic. The measures that will apply is similar to those for taxpayers affected by the bushfires. However, one important point of difference is that while the bushfire measures applied automatically to particular geographical areas, assistance for those impacted by COVID-19 will not be automatically implemented. As such, taxpayers that have been affected will need to contact the ATO to discuss their situation in order to come up with a tailored support plan.
Businesses on a quarterly reporting cycle for GST will be able to change their reporting and payment to monthly in order to get quicker access to GST refunds. However, the ATO notes that businesses can only make the change from the start of a quarter, so any changes now will take effect from 1 April 2020, and once a change is made you must keep reporting monthly for 12 months before you can elect to revert back to quarterly reporting. Additionally, businesses registered for fuel tax credits that change to a monthly GST reporting cycle will also need to claim fuel tax credits monthly.
Another thing to note is that changing your GST reporting cycle to monthly doesn’t mean you have to change your PAYG withholding reporting cycle, each is managed separately. Businesses that are quarterly PAYG instalment payers can vary their PAYG instalments on activity statement for the March 2020 quarter. To do this, they must lodge a revised activity statement before the instalment due date and before their tax return is lodged. Any business that vary their PAYG instalment rate or amount may also be eligible to claim a refund for any instalments made for the September and December 2019 quarters.
In addition to the above, the ATO will defer by up to 4 months the payment date of amounts due through the BAS (including PAYG instalments), income tax assessments, FBT assessments and excise. It will also consider remitting any interest and penalties applied to tax liabilities incurred after 23 January 2020 for any businesses affected by COVID-19. Taxpayers that need help with paying existing and ongoing tax liabilities are encouraged to contact the ATO to arrange a low-interest payment plan.
The ATO has also clarified that emergency accommodation, food, transport, medical or other assistance provided by employers to employees affected by COVID-19 may be exempt from FBT depending on the circumstances. However, despite the concessions offered, it notes that employers will still need to meet their ongoing super guarantee obligations for their employees. The ATO says by law, it cannot vary the contribution due date or waive the super guarantee charge where super guarantee payments are late or unpaid.