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10 Sep 2020 Member Advocacy

ATO systems and internet browsers — response by Senior Advocate, Robyn Jacobson CTA

A member recently sought assistance on the use of ATO systems on various internet browsers:

Why is the ATO only allowing the lodgment of a 1515 PAYG withholding variation application through Internet Explorer? This week I prepared such an application and tried using Microsoft Edge and all I got was a blank screen, likewise using Firefox or Chrome. Can the ATO update their processes so that Edge can be used?

The Tax Institute took the issue to the ATO asking for clarification on which browsers may be used when trying to access ATO systems. The ATO provided the following response:

The Tax Office is aware of the need to use Internet Explorer to lodge the PAYG withholding e-variation form. The software currently used by the form has limited the improvements that can be made to this service. Fortunately, a new platform that allows lodgment through OSfA and myGov is in development and we anticipate this will be available in the next 12 months. We apologise for any inconvenience.

For the best online experience, the Tax Office recommends using the one of the supported desktop browsers as listed — please refer to this link for further information.

Resolution of tax treatment of JobKeeper payments

There have been concerns in recent weeks about the tax treatment of JobKeeper payments. It is clear that the receipt of JobKeeper payments does not constitute the making of a supply by an entity for GST purposes, and so the amounts are not included in the entity’s GST turnover. It is also clear that JobKeeper payments are included in the entity’s assessable income.

However, it has been unclear whether JobKeeper payments are assessable as ordinary income under s 6-5 of the ITAA 1997 or statutory income under s 15-10. And if they are ordinary income, are they derived in the ordinary course of carrying on a business?

If JobKeeper payments are derived in the ordinary course of carrying on a business, this would mean that the payments would be included in the entity’s aggregated turnover (within the meaning in s 328-120) which determines whether an entity qualifies for a range of concessions and measures including:

  • $2 million — small business CGT concessions
  • $10 million — small business entity concessions
  • $20 million — refundable R&D tax offset
  • $50 million — base rate entity lower corporate tax rate and instant asset write-off (IAWO) for medium businesses
  • $500 million — IAWO for large businesses
  • $1 billion — JobKeeper decline in turnover specified percentage of 50%.

This would give rise to some undesirable and anomalous outcomes for taxpayers.

This significant issue was raised with The Tax Institute by one of our members. Following a discussion with the professional bodies, the issue was escalated to the ATO early last week. On Friday 4 September 2020, the ATO updated their web guidance to confirm that although JobKeeper payments are ordinary income, they are not derived in the ordinary course of business, and therefore not included in aggregated turnover.

This is a sensible outcome. The Tax Institute commends the ATO on its prompt response in resolving this important issue.

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