COVID-19 measures: how your business might be affected
The JobKeeper scheme ended on 28 March 2021. Your business does not have to do anything, but it will need to complete the March monthly business declaration by 14 April 2021. The final payment will be processed in April.
Your business must keep all relevant records for five years in case the ATO decides to look at its JobKeeper claims in detail.
Don’t forget that JobKeeper payments are assessable and should be included in your business’ tax return as income.
If your business has employees and their wages were effectively subsidised by JobKeeper payments, the full wages are still deductible.
If your business decides voluntarily to repay any JobKeeper payments it did not actually need, it will only get a tax deduction if the repayment is appropriate to achieve, or directed at achieving, the objectives of the business. According to the ATO, examples would include where a payment is made to:
- prevent reduction in business; or
- publicise and promote a business in the short-term.
Of course, as pointed out by the ATO, if your business deducts from the repayment the amount of tax paid on the payment, the tax outcome will be neutral.
If your business wishes to make a voluntary repayment, it should contact the ATO first as voluntary repayments cannot be made through usual ATO payment channels and require a special Payment Reference Number (PRN).
JobMaker hiring credit scheme
Don’t overlook the JobMaker Hiring Credit scheme (JobMaker) which was discussed in the February 2021 Business edition of TaxWise® News. Just to remind you, under JobMaker, the Government may pay your business up to $200 per week if it hires a new employee aged 16 to 29 and up to $100 a week if it hires a new employee aged 30 to 35. The new employee must commence employment between 7 October 2020 and 6 October 2021.
Your business must register with the ATO by 30 April 2021 if it wants to make a claim for the first JobMaker period (1 February to 30 April 2021).
To qualify, the employee headcount and payroll must genuinely increase. Your business cannot claim JobMaker if it merely replaces an employee aged over 35 with one aged between 16 and 35.
JobMaker cannot be claimed for certain new employees, including:
- relatives, partners if your business is operated through a partnership;
- directors and shareholders if your business is operated through a company; and
- certain contractors and subcontractors your business engaged at any time between 6 April 2020 and 6 October 2020.
Tip! The JobMaker scheme is complicated. Contact Southern Business Solutions if you think your business may qualify for JobMaker or if your business is thinking of hiring one or more new employees.
Stimulus vouchers: How to report this in your tax
Most States and Territories are providing assistance to help boost local economies affected by COVID-19. Many governments are doing this by issuing vouchers to eligible customers to pay towards purchases from eligible businesses for dining out, entertainment or accommodation.
If your business accepts stimulus vouchers from customers, you may be wondering how to deal with this for tax purposes.
When your business accepts a voucher, it needs to:
- treat the amount the voucher covers and the customer’s payment as income;
- report GST on the total of payments received.
Tip! If you are uncertain whether any fringe benefits your business provides to employees are exempt, e.g. as a minor benefit, or how to calculate the taxable value of any benefits that are not exempt, talk to Southern Business Solutions. For example, the otherwise deductible rule may apply to reduce the taxable value of a fringe benefit
Ref: TaxWise Business News April 2021