High alert issued over myGov tax time scam

The Australian Cyber Security Centre has now issued a high alert over myGov-related scams as tax time scams increase.

The high alert comes after the ATO reported increasing instances of myGov-related SMS and email scams.

The scams look like they have come from a myGov or ATO email address, and request that individuals click on a link to verify their details.

If clicked on, the hyperlink connects to a fake website that requests for details and other personal information for “verification purposes”.

The Australian Cyber Security Centre (ACSC) has warned that these emails or text messages mimic official tax time notifications from myGov or the ATO.

“To make them seem more legitimate, cyber criminals use technology that causes these messages to appear in the same conversation thread as genuine messages from the ATO or myGov,” the ACSC said.

“As always, our advice is don’t click any links and don’t provide the information requested.”

Technology Reporter
20 July 2020
accountantsdaily.com.au

Extended director penalty regime to catch out ‘zombie companies’

Directors of companies struggling through COVID-19 conditions could be at particular risk of the recently expanded director penalty notice regime, warns one tax lawyer.

Rigby Cooke Lawyers tax counsel Tamara Cardan has now warned directors of their heightened risk of personal exposure under the recent extension of the director penalty notice (DPN) regime, which kicked in at the height of the coronavirus pandemic.

Since 1 April, the DPN regime has been extended to GST, luxury car tax (LCT) and wine equalisation tax (WET) liabilities.

“The expansion of the regime to GST may catch out many more companies, in particular SMEs, which are right now simply trying to keep afloat and stay in business in these unprecedented times,” Ms Cardan told Accountants Daily.

“Directors are managing significant financial pressures, employee retention issues and a myriad of other urgent matters. In this context, it is logical that compliance with the director penalty regime is not at the forefront of people’s minds.”

With BAS lodgements for the first quarter under the extended DPN regime due soon, and the ATO eyeing a restart of its debt and lodgement intervention activities over the next couple of months, Ms Cardan believes directors need to begin being actively involved in the compliance and reporting activities of their business.

“Directors of ‘zombie companies’ will be at particular risk of exposure under the DPN regime, especially when the government’s support measures cease, and the company is not generating enough income to pay its tax debts. It is anticipated that many ‘zombie companies’ may go into administration, potentially leaving directors exposed under the DPN regime,” Ms Cardan said.

“Where a director has been issued with a DPN, placing the company into administration may actually be a way to satisfy his or her personal liability to the unpaid tax debts.

“However, this option will only be available where BAS lodgements have been made within three months of the relevant due date. If this time frame is not met and a DPN is issued, even if a company goes into administration, the director must still pay the tax debts to satisfy their personal liability.”

Ms Cardan also noted that director resignations would be ineffective in avoiding personal liability, with clients urged to engage with the ATO early to avoid tougher action down the line.

“If a director resigns from their company before a DPN is issued, the ATO may still subsequently issue a DPN to this individual. The key to mitigating personal exposure under the DPN regime is to have good internal reporting systems and timely lodgements,” she said.

“If your client’s business is experiencing financial difficulties and cannot satisfy its tax debts, I would recommend early engagement with the ATO to manage these liabilities. An open and co-operative relationship in most instances would prevent the ATO from taking stronger compliance action.”

Jotham Lian
27 July 2020
accountantsdaily.com.au

SG amnesty deadline – 7 September

Small businesses have been urged to disclose historical superannuation guarantee shortfalls ahead of the fast-approaching SG amnesty deadline.

With just over a month to go before the SG amnesty deadline of 7 September, the Australian Small Business and Family Enterprise Ombudsman has urged businesses to self-correct historical SG non-compliance dating from 1 July 1992 to 31 March 2018.

“Payment plans are available to small businesses unable to pay the lump sum amount owed, so long as they get on the front foot and make contact with the ATO, before the September 7 deadline,” said ASBFEO Kate Carnell.

“However, only payments made before September 7 will be eligible for the tax deduction benefit.

“To qualify for the amnesty, employers have to come forward voluntarily, without direct prompting from the ATO and agree to pay all employee entitlements plus interest.”

Despite the disruption caused by COVID-19, the government has remained silent on whether it would extend the SG amnesty deadline.

The accounting profession had previously called for the amnesty period to be extended, arguing that it has now encountered its “worst-case scenario” in coinciding with the coronavirus-induced downturn.

A joint submission from professional bodies has since called on the ATO to extend the SG amnesty deadline by a further six months to 7 March 2021.

Ms Carnell reiterated the amnesty will give small businesses a chance to ensure they are compliant “because all Australian workers deserve to be paid the entitlements they are owed”.

“If you don’t disclose unpaid super under the amnesty and you are found to have been non-compliant, you will face a minimum penalty of 100 per cent of the superannuation owed, have to pay $20 administration fee per employee per quarter and you cannot deduct any payments made,” she said.

Tony Zhang
28 July 2020
accountantsdaily.com.au

‘Hundreds’ to be contacted in ATO early super compliance blitz

Hundreds of Australians who applied for the COVID-19 early release of superannuation are set to be queried on their eligibility as the ATO kicks off a pilot compliance program.

The ATO will now contact “hundreds” of people who appear to have been ineligible for the early release of super but have gone ahead to raid their retirement savings.

The pilot examination will see 130 ATO officers personally contacting people to confirm and prove they have met the eligibility requirements, including by having been made redundant or seeing their working hours reduced by 20 per cent or more.

The initial examination will help the ATO decide if it will need to design a broader compliance program.

“For example, just to make it real, if we write out to 500 people and it turns out that 490 of them were eligible and only 10 were ineligible, we might say, ‘Well, look, the level of ineligibility is so low it’s not worth doing a big compliance program’,” ATO second commissioner Jeremy Hirschhorn told a Senate committee.

“Conversely, we might write out to 500 people and find out that 200 were ineligible, but we’ve worked out a signal to clearly identify those people, and then we’ll do a broader program.”

Mr Hirschhorn said data matching from external sources, including Services Australia, would help it identify those who were ineligible, but admitted that there would be holes in its information.

“We have information from systems in relation to things like how much people have been paid under Single Touch Payroll or whether they are in continued employment and whatnot,” he said.

“That information is informative but not determinative in relation to eligibility.

“For example, one of the tests is based on hours, it’s not based on remuneration. There are various tests on why you can be eligible. We have information which gives us hints that somebody may not be eligible, but it doesn’t tell us that they’re not eligible.”

ATO defends application process

The Treasury now expects $41.9 billion to be removed from the super system following the extension of the scheme to December, with $31.9 billion withdrawn as of 28 July.

Mr Hirschhorn said the scheme was designed on a self-assessment system, and a compliance program could not be enforced at the time of application because the ATO would not have live information of a person’s circumstances.

“It’s based on self-assessment. We work on the assumption that Australians are honest,” Mr Hirschhorn said.

“This is about getting emergency money to people. So, we will never have enough information to reject quickly. We will give people their money on the basis of their say-so.

“We don’t know yet whether, for example, they’ve been terminated, they’ve lost their job. We don’t know at the time they apply. We might have reasonable information a month later, when the next Single Touch Payroll comes in. So, that’s why it’s based on self-assessment.”

Mr Hirschhorn also noted that the ATO has yet to issue any fines or revoke the determination on a person’s eligibility and require the withdrawn super amount to be included as assessable income.

“There are a range of consequences. Again, where we think somebody has made an honest mistake as to their eligibility, and particularly where they voluntarily disclose that to us, we are unlikely to impose significant consequences,” he said.

“The next phase is if we withdraw our declaration, so they will have to pay tax on their superannuation at their marginal tax rate, and that is a reasonably significant consequence for many.

“In the worst cases, we can impose penalties for misleading statements, and that is up to $12,600, which is a very significant penalty when you have withdrawn $10,000 of your own money from super. So, there are a range of consequences, but again, we moderate those consequences depending on the deliberateness of the action.”

Jotham Lian
02 August 2020
accountantsdaily.com.au

90,000 SMEs to benefit from new JobTrainer program

The government has announced a $2.5 billion JobTrainer program, giving 340,000 Australians the opportunity to retrain or upskill into sectors with job opportunities, including an additional $1.5 billion to expand the apprentice and trainee wage subsidy.

Speaking on 2GB Breakfast radio on Thursday morning, the Minister for Employment, Skills, Small and Family Business, Michaelia Cash, explained that the new JobTrainer initiative will offer Aussies access to short courses and full qualifications to prepare for a post-pandemic workplace.

“That will be up to the states and territories as to how they would like to deliver them. But certainly, it’s vocational education and training, short courses, full qualifications. It’s all about upskilling, reskilling, retraining into areas that we know are in demand and have a job,” Ms Cash said.

Under the program, the National Skills Commission will work directly with the states and territories to ensure that we are targeting the areas of demand in their particular state or territory.

But according to Ms Cash, priority areas will be mining and resources; construction; ICT; health, aged and disability care.

“They’re the obvious ones where we know there is that growth,” Ms Cash said.

As for the additional cash being focused towards apprentice wage incentives, the minister explained that around 90,000 small and medium businesses will be covered.

“All those businesses out there, 200 employees or less, you now qualify,” she said.

“We’re extending it to those with 21 or more, and less than 200. We’re also extending the wage subsidy by a further six months to March 2021.

“So, for all of those small businesses out there who have already qualified, you will now get an extra six months of support. We want to see apprentices and trainees kept on the job, and that’s what this $1.5 billion will do.”

Maja Garaca Djurdjevic
16 July 2020
accountantsdaily.com.au

COVID-19 Business Continuity Plan – Stage 4 Restrictions

Guests Accounting has prepared and put in place a number of measures to ensure that we have the capacity to continue operations remotely. Our systems are prepared and controls have been implemented for all our staff to work remotely having access to their systems as if they were sitting in the office.

We would also like to reassure our bookkeeping and payroll clients that we anticipate you will experience minimal change with your current arrangements.

Communicating with Partners and Staff

Our switchboard will operate as usual.

All Partners and staff of Guests Accounting will have direct access to their emails and this will be our preferred form of communication during the stage 4 restrictions.

We will continue to receive mail from the post office which will be distributed to the appropriate partner/staff member.

We are committed to maintaining our service to all clients with as little disruption as possible during this time.
If you have any queries regarding the above, please do not hesitate to contact us.

The team at Guests Accounting

Guests Pty Ltd – 234 Balaclava Road, Caulfield North, Vic., 3161
(03) 9509 7033
info@guests.com.au

Client Alert – July 2020

Tax time 2020 is here

Don’t jump the gun and lodge too early

Tax time 2020 is here, but it’s likely to be anything but routine. Many individuals on reduced income or have increased deductions may be eager to lodge their income tax returns early to get their hands on a refund. However, the ATO has issued a warning against lodging too early, before all your income information becomes available. It’s important to remember that employers have until the end of July to electronically finalise your income statement, and the same timeframe applies for other information from banks, health funds and government agencies.

For most people, income statements have replaced payment summaries. So, instead of receiving a payment summary from each employer, your income statements will be finalised electronically and the information provided directly to the ATO. Your income statements can be accessed through myGov and the information is automatically included in your tax return if you use myTax.

Tip: Tax agents can also access this information, and we’re here to help you get your return right this year.

Although you may be eager to lodge as soon as possible, the ATO has warned against lodging too early, as much of the information on your income may not be confirmed until later. It’s generally important to wait until income statements are finalised before lodging a tax return to avoid either delays in processing or a tax bill later on. Your income statement will be marked “tax ready” on myGov when it’s finalised, and other information from banks, health funds and government agencies will be automatically inserted into your tax return when it’s ready towards the end of July.

If you still choose to lodge early, the ATO advises carefully reviewing any information that’s pre-filled so you can confirm it’s correct. When lodging early you’ll also have to formally acknowledge that your employer(s) may later finalise income statements with different amounts, meaning you may need to amend your tax return and additional tax may apply.

Tax return tips

With the great disruptors of the Australian bushfires and the global coronavirus (COVID-19) pandemic, and the associated government economic stimulus measures, there are some key tax-related matters for everyone to be aware of this year.

The ATO has a range of approaches to support taxpayers through tax time 2020, especially where new circumstances mean you might be receiving a different type of income or be able to claim new deductions. The ATO’s Tax Time Essentials page (www.ato.gov.au/taxessentials) provides a one-stop-shop for the things that are a little different this year and how they impact tax returns.

People accessing super early as a part of the COVID-19 early release scheme can rest assured that this money will not form a part of their assessable income. To date, 1.98 million people have withdrawn an average of $7,475 from their super under the scheme.

Another key difference this year is the introduction of the optional simplified method for claiming work from home expense deductions. This method allows you to claim 80 cents for each hour you worked from home from 1 March 2020 to 30 June 2020, to cover all deductible expenses. However, if you were working from home before 1 March 2020 or have documented actual expenses that work out to be more than 80 cents per hour you can still use the usual method to claim expenses related to working from home.

If you were unable to work from home and had to take leave or were temporarily stood down, if your employer made any kind of payment, either regular or one-off, those amounts will need to be declared as wages and salary on your return and tax will apply at your usual marginal rates. This applies regardless of whether the payments are funded by the government JobKeeper scheme.

If you’ve been made redundant or had your employment terminated, any payment you receive may consist of a tax-free portion and a concessionally taxed portion, which means that you could potentially pay less tax.

Expanded instant asset write-off for businesses

If you’ve purchased assets for your business, remember that you may be eligible to claim an immediate deduction under the instant asset write-off, which was recently expanded.

From 12 March to * 30 June 2020 inclusive, the instant asset write-off threshold for each asset increased to $150,000 (up from $30,000) for business entities with aggregated annual turnover of less than $500 million (up from $50 million).

To get it right, remember:

check if your business is eligible;
both new and secondhand assets can be claimed, as long as each asset costs less than $150,000;
assets must be first used or installed ready for use between 12 March and * 30 June 2020;
a car limit applies for passenger vehicles;
if the asset is for business and private use, only the business portion can be claimed;
you can claim a deduction for the balance of a small business pool if its value is less than $150,000 at 30 June 2020 (before applying depreciation deductions); and
different eligibility criteria and thresholds apply to assets first used or installed ready for use before 12 March 2020.

* This has now been extended to 31 December 2020

Additional cash flow boost coming for businesses

If your business is one of many that received the initial cash flow boosts as a part of the government’s COVID-19 economic stimulus measures, prepare for more help coming your way. When you lodge your monthly or quarterly activity statements for June to September 2020, your business will receive additional cash flow boosts.

Generally, the additional amount will be equal to the total amount that you initially received and will be split evenly between the lodged activity statements. Quarterly payers will generally receive 50% of their total initial cash flow boost for each activity statement, while monthly payers will generally receive 25% of their total initial cash flow boost for each activity statement. However, if you’ve made adjustments or revised your activity statements after lodgment, the amount of additional cash flow boost payments you receive may be different.

Remember, if you haven’t made payments to employees subject to withholding, you need to report zero for PAYG withholding when lodging your activity statements to ensure you receive the additional cash flow boost payments. It’s important that you don’t cancel PAYG withholding registration until you have received the additional cash flow boosts.

ATO scam calls may soon be a thing of the past

Last year, some 107,000 ATO impersonation scam calls were reported to the authorities. The real number is likely to be much higher, given that most of these types of calls go unreported. Scammers are increasingly using technological advances to appear more legitimate and nab unsuspecting victims.

One technique commonly used is “spoofing”, where scammers use software to mislead the caller ID technology on mobile phones and modern fixed line phones. Rather than transmitting the actual, typically overseas, phone number the call is coming from, the software “overstamps” it with another phone number. Commonly, the numbers used are widely publicised, such as the legitimate numbers used by the ATO.

Tip: The ATO has recently alerted the community to an SMS scam which claims that you’re due to receive a tax refund and asks you to click on a link. The ATO will never send an email or SMS asking people to access online services via a hyperlink.

Due to the prevalence of these scams and the large amount of money lost by individuals, Australian telcos, the ATO and the Australian Communications and Media Authority (ACMA) recently collaborated on a three-month trial of technology to block scam calls appearing to originate from legitimate ATO phone numbers. Under the Scam Technology Project, participating telcos used software to identify calls which had been “overstamped” with specified ATO phone numbers and blocked them.

According to the government, the trial has been “highly successful” in blocking spoof calls from specified ATO numbers. While this blocking technology will not stop scammers randomly ringing Australians pretending to be from the ATO, it will stop specific ATO numbers appearing in the caller ID on the recipient’s phone, making the scam seem less convincing.

Tip: If you receive a call from someone who says they are from a government department, such as the ATO, but you’re not sure whether the call’s legitimate, the best course of action is to hang up and phone back on a widely publicised number from an official website or source.

JobKeeper Phase 2 – The Next Step

The Government has decided to extend a lower JobKeeper for a further six months (13 fortnights) from 28 September this year, with eligibility based on actual rather than projected turnover declines.

The key features are

Only those businesses whose actual GST turnovers in each of the June AND September 2020 quarters have declined by 30% or more (or 50% or more – businesses with a GST turnover of $1 billion or more) compared with the same periods in 2019 will be entitled to JobKeeper in the December 2020 quarter.
Only those businesses whose actual GST turnovers in each of the June, September AND December 2020 quarters have declined by 30% or more (or 50% or more – businesses with a turnover of $1 billion or more) compared with the same periods in 2019 will be entitled to JobKeeper in the March 2021 quarter.
The JobKeeper payments will be lower and there will now be two tiers:
- For employees who, in the four weeks of pay periods before 1 March 2020, were working in the business for 20 hours or more a week on average – for the December quarter, $1,200 a fortnight; and for the March 2021 quarter, $1,000 a fortnight
- For other eligible employees (both permanent part time and casual) – $750 a fortnight for the December 2020 quarter and $650 a fortnight for the March 2021 quarter
Business participants who are not employees remain eligible on the same basis as employees.
Employers must pay employees first before they can receive JobKeeper.

The new turnover tests will be harder to fulfill than those applying to JobKeeper 1.0.

Each quarter is tested for actual GST turnover, – averaging is out and the single month test is out.

One difficulty all employers who remain eligible will face is timing the calculation of their turnover for the September and December 2020 quarters with the payment of staff. With BAS deadlines of 28 October and 28 January respectively, the ATO “will have discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper Payment”. But delaying BAS lodgement can also delay receipt from ATO.

As far as employees are concerned, the eligibility rules are unchanged. In that regard, the employee must have been on the books as at 1 March 2020 as well as being a current employee for the relevant JobKeeper fortnight. The rules which exclude persons who were not long-term casuals as at 1 March also remain, as do the rules excluding most temporary workers who are neither citizens nor permanent residents.

The long term casual test has two relevant dates – 1 March being the date on which the employee has to meet the basic criteria (including the long term casual test) and the JobKeeper fortnight the subject of the claim and for which the employer must have paid the employee.

Federal Government

Important Single Touch Payroll Update

Single Touch Payroll (STP) and Annual PAYG Payment Summaries – a reminder to both employers and employees.

Payment summaries – if you are using the STP system you will be exempt from issuing payment summaries to your employees if you have made a ‘’finalisation declaration’’.

STP summaries replace the previous PAYG summaries.

The payment summaries will be made available to your employees online through myGov.

The finalisation declaration requires the employer to declare that all of the information relative to the financial year for each employee has been provided through your STP reporting. Finalisation declaration lodgement requirements are:

Employers with 20 or more employees will have until 14^th July 2020.
Employers with 19 or less employees will have until 31^st July 2020.

Payment summaries – if you are not using STP, the payment summaries have to be prepared and sent to all employees by 14^th July 2020.

PAYG Withholding Tax – if you are not using STP the annual summary is due to be lodged with the ATO by 14^th August. 2020.

Payroll Tax (if you are liable – if you have any questions please contact us) – you have to prepare a reconciliation of total payroll for the year showing the total amount of payroll tax payable and then reconcile this with the remittances that you have forwarded throughout the year.

Workcover – a Workcover Declaration is due by 31^st August certifying wages paid for the year ending 30^th June 2020.

ATO

Payroll Tax 2020 concessions and JobKeeper

Employers subject to payroll tax will generally benefit from an expected relaxation of payroll tax by all states & Territories.

Each state has their own version of concessions, including increased thresholds and one-off grants. For more detail on each State and Territory, click on the appropriate link in the article in our news feed titled 'COVID-19 resources -Update July 2020'.

Generally, the principle will be that wages paid to meet the requirements of the JobKeeper scheme are exempt from payroll tax, to the extent that they exceed the employees earned wage.

The JobKeeper receipt by the employer is income, (no GST), so the subsidised payment to the employee should remain tax neutral to the employer.

The payments are exempt from payroll tax if the employee had been stood down.

Whether the employee payment is taxable will depend upon the wages before Jobkeeper and the hours worked.

Northern Territory has a new field on the Annual Declaration to identify the JobKeeper portion, which will be deducted from the gross.

Other states require exclusion of the JobKeeper portion of wages, subject to whether the wages are higher or lower than the JobKeeper amount.

Further details will be needed on the Annual Adjustment return, with calculations back to JobKeeper start in March 2020. Examples are provided by each collection authority.

Businesses with annual Victorian taxable wages, up to $3m, will have their entire payroll tax for the 2020 year waived. Any payroll tax already paid can be refunded. No further payments are required, although payroll tax reporting should continue.

AcctWeb