With tax just time around the corner, small businesses need to get aware of relief measures available to help them survive the COVID-19 economic crisis.
“There’s no doubt businesses are concerned about upcoming tax deadlines in this economic crisis,” Chartered Accountants Australia and New Zealand’s (CA ANZ) Australian Tax Leader, Michael Croker said.
“The Australian Taxation Office (ATO) is offering COVID-19 impacted businesses some much-needed tax support, a welcome relief for business owners, many of whom are having one of the worst business periods of their life.
“The key point is to engage with the ATO. Business owners who put their head in the sand and hope the ATO just goes away are less likely to get sympathetic hearing from the taxman.”
CA ANZ nominated five tax relief measures that all businesses should note at tax time, which could make the difference in keeping the doors open and the lights on.
Lodgment and Payment Deferrals
Falling behind on tax lodgements attracts ATO attention. Limited lodgement and payment deferrals have been applied to company income tax returns, including business activity statements, income tax and fringe benefits tax assessments.
30 June 2020 is a critical date for getting 2019 tax returns lodged without being penalised. The ATO may be able to defer payment to 12 September 2020.
“To organise a deferral arrangement, businesses will need to contact the ATO. It often helps to have an accountant in your corner to explain how COVID-19 has affected the business,” Croker said.
“Business owners should seek advice from their accountant and get in contact with the ATO ahead of time. We are all on the same page here when it comes to working together to work out of this crisis.”
“To receive quicker access to any GST refunds, the ATO is allowing affected businesses on a quarterly GST reporting cycle to switch to monthly GST reporting,” Croker said.
“Don’t forget though that taxpayers can change from the start of a quarter, but once they change, they must keep reporting their GST monthly for 12 months.”
Remission of Penalties
The ATO will consider remitting interest and penalties that have been applied to tax obligations by affected businesses on or after 23 January 2020.
“There is also the option to stop interest being charged while the COVID-19-affected period continues. Your local Chartered Accountant can help you talk about this with the ATO,” Croker said.
Low Interest Payment Plans
“For those businesses struggling to find the cash to pay their tax, there is the option of engaging in a tax debt payment plan with the ATO, to help you pay existing and ongoing tax liabilities.
“Any business struggling with the financial impact of COVID-19 should discuss this with the ATO, or your local Chartered Accountant.”.
Speak With Your Local Chartered Accountant About Business Recovery
“Investing in good accounting systems to obtain quality, real time data and obtaining business recovery advice from a Chartered Accountant is a solid move for all businesses navigating their way out of COVID-19.
“This includes planning for the time when stimulus measures like JobKeeper are withdrawn.
“Having a plan will also be important in discussions with banks, commercial landlords and suppliers. They all want to know if your business is sound before extending credit or agreeing to discounts,” Croker said.