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04 Feb 2021 Member Advocacy

Cash flow boost — response by Senior Advocate, Robyn Jacobson, CTA

Following the release of the Inspector-General of Taxation and Taxation Ombudsman’s A Report on aspects of the Australian Taxation Office’s administration of JobKeeper and Boosting Cash Flow Payments for new businesses on 21 December 2020 — which identified an alternative eligibility pathway for certain businesses (in very limited circumstances) for JobKeeper (business participants) and the cash flow boost — one of our members sought assistance with an entity that had previously been denied the cash flow boost due to an inability to evidence business activity before 12 March 2020.

The business commenced, and the bank account was opened, in September 2019, although the first sale (i.e. supply) was not made and reported at G1 on the BAS until after 31 December 2019. Nonetheless, the entity made a financial supply (the ‘acquisition supply’ being the opening of the bank account) in a tax period that ended before 12 March 2020.

The Tax Institute took the matter to the ATO seeking assistance for the member. The ATO advised us that they would arrange for someone in the cash flow boost team to contact the member.

The member has recently provided this feedback:

I would just like to email to say thank you so much for your help with our matter.  I just received confirmation yesterday that my client has been approved to receive the full cash flow boost payment. They are beyond happy. Thanks again!

Single Touch Payroll: Phase 2 deferral to 1 January 2022 — commentary by Senior Advocate, Robyn Jacobson, CTA

The implementation of Single Touch Payroll (STP) Phase 2 was scheduled to commence on 1 July 2021. Phase 2 extends STP reporting to other government agencies.

Due to the disruption from the COVID-19 pandemic, and the crucial role played in dealing with significant legislative change and stimulus support programs through 2020, digital service providers, intermediaries and employers are not in a position to meet the proposed 1 July 2021 start date. The professional bodies sought in a joint submission a deferral of the start date to 1 July 2022. In total, 28 submissions were received during the public consultation period of 9 December 2019 to 13 January 2021.

On 3 February 2021, the ATO registered a legislative instrument that defers the commencement of Phase 2 from 1 July 2021 to 1 January 2022. The deferral is very welcome and will help to ensure that the data submitted through STP Phase 2 to the ATO, and subsequently shared with Services Australia and others, is more likely to be accurate and able to be relied upon by Government.

The Tax Institute, along with the other professional bodies, strongly advocated for the ATO not to proceed with 1 July 2021 start date, and we welcome the very sensible decision to defer the commencement to 1 January 2022. This outcome is good news for the tax practitioners on whose behalf we advocated.

The ATO has advised us there may be circumstances where employers, digital service providers or payroll providers require additional time beyond 1 January 2022. They will be able to apply to the Commissioner for a deferral, depending on the circumstances presented in the application. Further information will be available from the ATO website in due course.

Processing of outstanding tax return — commentary by Senior Advocate, Robyn Jacobson, CTA

A member recently sought assistance on behalf of their client for whom they had lodged 2012 and 2013 paper individual income tax returns in October 2020 through the Online Services for Agents mailbox.

The ATO processed the 2013 return but not the 2012 return. Despite numerous follow-ups and attempts at resolving with the ATO, the 2012 return remained unprocessed, and the delay exceeded the ATO’s service standard for paper returns. The member’s time spent trying to resolve the matter was not able to be recovered from the client.

The Tax Institute took the issue to the ATO seeking assistance for the member. The ATO advised us that they would arrange for someone to contact the member.

Summary and conclusion

The member advised us that, after nearly four months, the ATO has processed their client’s 2012 income tax return. They provided the following feedback to The Tax Institute:

Thank you for your assistance with the ATO. I was contacted yesterday by the ATO’s complex issues team and they immediately acted on the additional information I provided. The client’s returns are all now up to date and we are able to move forward.

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