This article was last updated on 8 May 2020.
As you can imagine, we are currently fielding lots of questions from clients regarding government assistance to help those currently experiencing financial hardship. Below we cover some FAQs and will continue to update this article with useful information as it becomes available. On Thursday 9 April and Friday 17 April, we held webinars on accessing financial assistance and claiming JobKeeper Payment. If you missed those webinars you can watch them here. You might also find our articles on Government Assistance and Bank Assistance helpful. If you have any questions you’d like us to answer, please let us know at email@example.com or get in contact with our experts on (07) 3023 4800.
Is the Queensland Jobs Support Loan still available?
Due to overwhelming demand, applications are now closed for the Jobs Support Loan scheme.
Submitted applications that have already been received, will be assessed in the date order that they have been received complete with all the required information for assessment. Applications will continue to be assessed up until the $500 million funding is fully exhausted.
The current expected processing times for loan applications received:
- Up to 1 April will be processed by the end of April
- After 1 April will be processed during May.
Can I get any assistance for apprentice and trainee wages?
Yes. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. For more information go to: https://www.employment.gov.au/supporting-apprentices-and-trainees
Can I get an ATO payment arrangement for debts if finances are impacted by coronavirus?
Yes, the ATO is being more lenient with deferrals of payment due dates up to September 2020. Payment deferrals won’t happen automatically – you’ll have to contact the ATO to put a plan in place. You can organise this through your tax advisor or find out more by visiting the ATO Additional Support page – https://www.ato.gov.au/General/COVID-19/Additional-support-during-COVID-19/
What help is available for Queensland payroll tax?
You may be eligible for one or more of a range of payroll tax relief measures as a result of the impact of coronavirus. These include:
- refunds of payroll tax for 2 months
- a payroll tax holiday for 3 months
- deferral of paying payroll tax for the 2020 calendar year.
You can find out more about the help available here – https://www.business.qld.gov.au/running-business/employing/payroll-tax/lodging/coronavirus-tax-relief
I have an entity that I’m closing down but it has assets in it. Can I transfer these assets to my new entity and claim the $150k instant write off per asset?
No you can’t, it has to be unrelated parties for this claim.
What if I don’t have employees but myself and my partner work in the business? Do we get the boosting cash flow payment?
It depends upon how you have been paid. If you’ve been paid as an employee then it should just be automatic based upon your normal pay runs. If you were paid a dividend, drawings or distributions then the stimulus package won’t apply at this stage.
Will the ATO investigate schemes designed to obtain a higher cash flow boost?
Yes. You will not be eligible for cash flow boosts if you (or a representative) have entered into or carried out a scheme for the purpose of:
- becoming entitled to cash flow boosts when you would otherwise not be entitled, or
- increasing the amount of the cash flow boosts.
This may include restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.
Any sudden changes to the characterisation of payments made may cause the ATO to investigate whether the payments are in fact wages. If the payments are wages, the ATO may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may also have FBT obligations that have not yet been met.
Do I pay tax on the cash flow boost from the Federal Government?
No, it is tax free in the employers hands.
Can I still then claim the PAYG credited on my BAS as a tax deductible expense in my business?
How do I access JobKeeper payments?
The JobKeeper payment is open to eligible employers to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight. From 20 April onwards, you can enrol for the JobKeeper payment and from 4 May onwards you’ll be able to confirm your eligible employees. Payments are expected to start flowing from 14 May. To find out more about the process, read our JobKeeper Payment article.
Do businesses have to meet the decline in turnover test on an ongoing basis?
No. The decline in turnover test only needs to be satisfied once and there is no requirement to retest in later JobKeeper Payment fortnights. If a business can demonstrate that its turnover has been adversely impacted by at least 30% (or 50% for larges businesses), then it will continue to meet this requirement even if its turnover subsequently recovers in later JobKeeper fortnights.
What if a business’s turnover has not decreased but it is predicted to do so in the coming month?
An employer can apply for the JobKeeper Scheme where it is reasonably expected that its GST turnover will fall by 30% or more (or 50% for larger businesses) relative to its GST turnover in a corresponding period a year earlier.
Treasury has advised that the ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.
If a business does not meet the decline in turnover test as at 30 March 2020, the business can start receiving the JobKeeper Payment at a later time, once the decline in turnover test has been met. In this case, the JobKeeper Payment will not be backdated to the commencement of the scheme but businesses can receive JobKeeper Payments up to 27 September 2020.
Are employers required to continue to pay employees to qualify for the JobKeeper Payment?
Yes. Employers are required to satisfy the ‘wage condition’ in respect of an employee for the relevant JobKeeper fortnight in order to qualify for the JobKeeper Payment for that employee.
The ‘wage condition’ requires the employer to pay each eligible participating employee at least $1,500 for each JobKeeper fortnight, which can be represented by salary, wages, PAYG withholding, salary-sacrificed superannuation contributions and other amounts. If employers have insufficient cashflow to make such payments, Treasury has encouraged businesses to speak to their banks about using the upcoming JobKeeper Payment as ‘collateral’ to seek short-term finance to pay their employees.
If employees have been stood down after 1 March 2020 does an employer need to pay them?
Yes. As discussed above, employers will need to make payments to eligible employees, including employees who have been stood down. This means the employer must pay the stood down employee a minimum of $1,500 per fortnight (before tax) in the relevant fortnight. Where an employer pays their staff monthly, the monthly payment must be equivalent to the required fortnightly payments. For subsequent payment periods, an employer will need to continue to pay these employees who have been stood down a minimum of $1,500 (before tax) before the end of each relevant JobKeeper fortnight.
Can employers select which of their eligible employees are covered by the JobKeeper Scheme?
No. Once an employer decides to participate in the JobKeeper Scheme, they must ensure that all of their eligible employees (who have agreed to be nominated for the scheme) participate in the scheme. This applies to all eligible employees irrespective of whether they are still working for the employer or they have been stood down. As the scheme is operated on an ‘one in, all in’ basis, employers cannot ‘pick and choose’ which eligible employees will be able to participate in the scheme.
Are the JobKeeper Payments from the ATO assessable income to the business?
Yes. JobKeeper Payments received from the ATO by the business are assessable income, however, salary or wage payments made by the business to their employees are allowable deductions.
A timing mismatch may arise in relation to the income year in which the assessable income is included and the income year in which the allowable deductions are claimed. This is because the salary and wages are required to be paid before a JobKeeper Payment is received from the ATO. For instance, a deduction may be claimed for salary and wages paid in June 2020 (deductible in the 2020 income year), whilst the JobKeeper Payment would not be received until July 2020 (assessable in the 2021 income year).
Are employers required to deduct PAYG withholding from the amounts paid to employees?
Yes. Broadly speaking, employers are required to make payments of at least $1,500 to each eligible employee every JobKeeper fortnight and deduct the appropriate amount of PAYG withholding. Therefore, if an eligible employee receives at least $1,500 per fortnight, then at least $192 of PAYG withholding will need to be deducted where the employee is claiming the tax-free threshold.
Are employers subject to Superannuation Guarantee (SG) in relation to any extra JobKeeper Payments?
No. The Government’s intention is that employers will only be required to make SG contributions for amounts payable to an employee in respect of their actual employment, which would not include any extra payments made by the employer to satisfy the $1,500 JobKeeper Payment ‘wage condition’. At the time of writing, the law is yet to be amended to reflect this.
Can a sole trader who has employees also qualify for the JobKeeper Payment?
Yes. On the basis that the sole trader’s business has satisfied all the other requirements to qualify for the JobKeeper Payment, a sole trader can qualify for the JobKeeper Payment in relation to their eligible employees and also qualify for the JobKeeper Payment themselves as an eligible business participant.
We will continue to provide details on coronavirus government assistance as soon as the information is available. Should you have any questions about how these measures affect you or your business, please contact us for further advice. You can reach us on (07) 3023 4800 or at firstname.lastname@example.org.
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