Coronavirus crisis: additional tax support for businesses

While the Australian Government has provided businesses with many relief measures during the COVID-19 pandemic, such as the JobKeeper subsidy payment scheme, major changes to instant asset write-off and also rental relief for commercial tenants, the ATO has also provided additional tax support measures that may help your business further.

The ATO is providing businesses with financial relief in terms of interest payment and penalties. Such measures include:

• The ATO will consider remitting interest and penalties incurred after 23 January 2020.
• Low interest payment plans can be discussed with the ATO if you need help to pay your existing and ongoing tax liabilities.
• Income tax, FBT and excise payment due dates can be deferred until 12 September 2020.

The ATO is also encouraging businesses to consider temporarily changing their GST reporting cycle in order to get quicker access to their GST refunds. For example, for businesses which usually report their GST quarterly, moving to monthly reporting if you are due for a GST refund means you can get quicker access to the GST refunds you are entitled to. However, before you make the change, consider that:

• You can only change your reporting cycle from the start of a quarter.
• Changing your GST reporting cycle does not mean changing your PAYG reporting cycle.
• Choosing to report and pay GST monthly means committing to reporting monthly for at least 12 months before electing back to quarterly reporting.
• Your fuel tax credits will need to be reported with your GST.

The new additional tax support measures also means that you can vary your PAYG instalments on your activity statement. You may also be able to claim a refund for any instalments made during the 2019-20 financial year. Penalties or interest will not be applied to where you choose to vary your PAYG instalments for the 2019-20 financial year as well.