Robert Goodman Accountants Blog

Get ready for changes to the Jobkeeper

 

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The JobKeeper payment will soon be changing. In order to support businesses through a potentially prolonged economic downturn due to the pandemic, the government has confirmed it will seek to extend the payment beyond the current end date of 27 September to 28 March 2021. The extension of the payment comes with significant changes including an introduction of a part-time rate for those who were employed less than 20 hours per week, a slow tapering of the payment rate from $1,500 to $1,000 per fortnight, and more stringent eligibility requirements.

Businesses nervous about the state of the economy in the wake of a potential second wave can breathe a sigh of relief; the government has confirmed its intention extend the JobKeeper beyond the current legislated end date of 27 September with a few tweaks to eligibility and payment rates.

While the government has extended the JobKeeper from 28 September 2020 to 28 March 2021, not everyone currently on the JobKeeper will be treated the same. Part of the changes include the introduction of a part-time rate to "better align the payment with the incomes of employees before the onset of the COVID-19 pandemic". Another significant change is the slow tapering down of the payment rate from the current $1,500 to $1,000 by 28 March 2021.

Period

Full rate per fortnight

Less than 20hrs worked per fortnight rate (Part-time rate)

28 September 2020 to 3 January 2021

$1,200

$750

4 January 2021 to 28 March 2021

$1,000

$650

Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the part-time rate from 28 September 2020. Businesses will therefore be required to nominate which payment rate they are claiming for each of their eligible employees. Payment by the ATO will continue to be made in arrears, and alternative tests are available where the employees' hours were not usual during the February 2020 reference period.

In addition to the change in payment rates, businesses that want to continue claiming the JobKeeper payment beyond 27 September 2020 will be required to reassess their eligibility with reference to their actual turnover in the June and September quarters as well as satisfying existing eligibility requirements.

Therefore, it may be possible for businesses to be eligible for the first extension (28 September 2020 to 3 January 2021) and not the second extension (4 January 2021 to 28 March 2021) depending on economic and trading conditions.

To be eligible for the JobKeeper for the period 28 September 2020 to 3 January 2021, businesses will be need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019).

Similarly, to be eligible for the second JobKeeper extension from 4 January to 28 March 2021, businesses will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019). A 30% decline is considered significant (in line with existing eligibility requirements) for most businesses not including not-for-profits.

As the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO).

Therefore, businesses must be careful if they are intending to claim the extentions to the JobKeeper payment, however, the Commissioner will have the discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility.

Need help with working out eligibility?

If you need help to work out whether your business is eligible for the extension or whether certain employees will soon need to be paid a part-time rate, contact us today, we can help work out your eligibility in advance and plan for the new payment rates to your employees.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au© Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

 

Businesses that received the initial cash flow boosts as a part of the COVID-19 stimulus measures are in line for additional payments for the June to September quarter. Generally, the additional amount businesses will receive will be equal to the total amount that they initially received and will be split evenly between the lodged activity statements. However, if you've made adjustments or revised your activity statements after lodgement, the amount of additional cash flow boost payments you receive may be different.

If your business is one of many that received the initial cash flow boosts as a part of the government's COVID-19 economic stimulus measures, prepare for more help coming your way. When you lodge your monthly or quarterly activity statements for June to September 2020, your business will receive additional cash flow boosts.

The additional amount you receive will be equal to the total amount of initial cash flow boosts that you previously received and will be split evenly between your lodged activity statements. Therefore, quarterly payers will generally receive 50% of their total initial cash flow boost for each activity statement, while monthly payers will generally receive 25% of their total initial cash flow boost for each activity statement.

For example, if your business lodges activity statements quarterly and you received an initial cash flow boost of $10,000, when you lodge your June to September 2020 quarterly activity statements your business will receive $5,000 for the quarter ended June 2020 and $5,000 for the quarter ended September 2020. Although, if your business lodges monthly activity statements, you will receive $2,500 for each month of June, July, August and September 2020.

Beware however if your business has revised activity statements after lodgement, it may affect the amount of cash flow boost you may receive. You can check your statement of account through ATO online services for details on how your account may have been adjusted to work out how it will affect your cash flow boost payment.

Remember, if you have not made payments to employees subject to withholding, you need to report zero for PAYG withholding when lodging your activity statements to ensure that you receive the additional cash flow boost payments for June to September 2020. It is important that you do not cancel PAYG withholding registration until you have received the additional cash flow boosts.

If your business does not automatically receive the cash flow boost, it does not necessarily mean your business is not eligible, it may just mean the ATO requires additional information.

For example, to be eligible for the cash flow boost, your business will need to be a small to medium business with an annual turnover of less than $50m. However, the ATO has discretion to deem a business eligible if:

  • you're a new business that haven't previously lodged an income tax return because you started business on or after 1 July 2019; or
  • you can demonstrate that you expect your business to be a small or medium business entity with a turnover of less than $50m in the 2019-20 year even though your aggregate turnover for prior years was more than $50m.

To take advantage of the additional cash flow boost payments, make sure you lodge your activity statements by the due dates below:

  • For quarterly lodgers, the due dates are:
    • 28 July 2020 for the April-June 2020 quarter; and
    • 28 October 2020 for the July-September 2020 quarter.
  • For monthly lodgers, the due dates are:
    • 21 July 2020 for June 2020;
    • 21 August 2020 for July 2020;
    • 21 September 2020 for August 2020; and
    • 21 October 2020 for September 2020.

Need help?

If you're not sure whether your business will receive the cash flow boost payment, we can help you figure it out. We can also help you lodge your activity statements on time in order to receive the additional payments to help with the cash flow. Contact us today for expert service and advice.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

Instant Asset Write Off Extended

The Federal Government has announced the extension to the instant asset write off for six months to 31 December 2020.

If your business is in relatively good shape and have been contemplating an asset purchase, now is the time. Not only will you be helping the Australian economy get back on its feet, you'll be doing your business a favour by taking advantage of the instant asset write-off threshold of $150,000. Which is the highest it has ever been or will likely to be for a while. 

With businesses all around the country starting back up after the COVID-19 pandemic, many, including the federal government are hoping to trade their way out of a potentially prolonged recession. Businesses that are in relatively good shape can help the economy and themselves at the same time by purchasing any needed capital assets and taking advantage of the instant asset write-off now.

From 12 March 2020 until 31 December 2020, the instant asset write-off threshold amount for each asset has been increased from $30,000 to $150,000. Which means that businesses are able to purchase an asset up to the value of $150,000 and claim the entire amount (or the business-use portion) as a tax deduction provided it is first used or installed ready for use between those dates. Any businesses with an aggregated turnover of less than $500m is eligible.

The timing of whether you get the instant asset write-off threshold of $150,000 will largely depend on when the asset was purchased and when it was first used or installed ready for use. Generally, if the asset was first used or installed ready for use between 12 March 2020 and 30 June 2020, the instant asset write-off threshold applies for the 2020 financial year. If the asset is first used or installed ready for use between 1 July 2020 and 31 December 2020, the instant asset write-off threshold applies for the 2021 financial year

However, not all assets are included in the instant asset write-off, a small number of assets are excluded and there are special rules for the purchase of a car.

For example, if your business purchases a luxury passenger car costing $100,000 on 5 June 2020, while the instant asset write-off threshold is $150,000, you are not able to deduct the entire cost of the car. The cost of car for depreciation is limited to the car limit for the year. For the year ending 30 June 2020, the car cost limit for depreciation is $57,581, therefore, you will only be able to deduct $57,581 under instant asset write-off and cannot claim the excess cost under any other depreciation rules.

If, in the above example, your business instead purchases a work ute which isn't designed to carry passengers and has been set up with all the trade tools in the tray for use in your business, the car cost limit for depreciation would not apply. So, if the ute was purchased for $70,000 on 5 June 2020, your business is able to claim the full deduction of $70,000.

It is also important to note that your business can claim the instant asset write-off on multiple assets, as long as the cost of each asset is less than the threshold. Whether or not GST is included or excluded from the threshold largely depends on if your business is registered for the GST. It will be crucial to get this right, particularly for those assets that are close to the threshold.

For any assets that cost the same or more than the relevant instant asset write-off threshold, it will usually need to be depreciated according to either simplified depreciation rules or general depreciation rules, depending on which one the business uses and the type of asset.

Want to do your bit to help the economy?

If your business has been contemplating an asset purchase under $150,000, now is the time to act. You will have until 30 June 2020 to first use it or have it installed ready for use to take advantage of a big deduction in the current 2020 financial year, or between 1 July 2020 and 31 December 2020 for the deduction in the 2021 financial year. Contact us today if you're not sure whether the asset you're planning to purchase would qualify.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au .All rights reserved. Brought to you by Robert Goodman Accountants. 

The Government is supporting small business to retain their apprentices and trainees. 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. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Employers will be reimbursed up to a maximum of $21,000, per eligible apprentice or trainee ($7,000 per quarter).

Support will also be provided to the National Apprentice Employment Network, who are responsible for coordinating the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

Eligibility

The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. 

Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy. The apprentice or trainee must have been in training with a small business as at 1 March 2020.

Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

Timing

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

An example of how this support can help your business

David's Plumbing is a small business that employs 10 people, including two full-time Australian Apprentices.

Taylor is a first year Australian Apprentice, aged 20, undertaking a Certificate III qualification.  She commenced her apprenticeship with David's Plumbing on 6 February 2020. Taylor receives a weekly wage of $532.89.

Lisa is a third year Australian Apprentice, aged 29, undertaking a Certificate IV qualification. She commenced her apprenticeship with David's Plumbing on 18 November 2017. She receives a weekly wage of $772.71.

David's Plumbing are eligible for Supporting Apprentices and Trainees which pays 50 per cent of the apprentices' wages that have been paid by David's Plumbing since 1 January 2020.

David's Plumbing will receive:

  • $9,059 subsidy for employing Taylor for 6 February 2020 to 30 September 2020
  • $15,068 subsidy for employing Lisa for 1 January 2020 to 30 September 2020

For more info https://bit.ly/2WHoKSu 

Email us at Robert Goodman Accountants at reception@rgoodman.com.au .All rights reserved. Brought to you by Robert Goodman Accountants.

Queensland COVID-19 Jobs Support Loans

Expressions of Interest: Queensland COVID-19 Jobs Support Loans

The Queensland Government announced on Tuesday, 17 March a new $500 million loan facility, interest free for the first 12 months, to support Queensland businesses impacted by COVID-19 retain employees and maintain their operations.

The $500 million concessional loan facility will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff.

The Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible.

To register your interest:

Email the Qld Government here with your full name, phone number and preferred email address.

Or

Freecall 1800 623 946

QRIDA will contact you when the scheme is open to applications shortly.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au .All rights reserved. Brought to you by Robert Goodman Accountants.

The Queensland Government recognises that cash flow is vital for small business.

From 1 July 2020, government payment terms under the On-time Payment Policy will be reduced from 30 to 20 calendar days for all valid invoices from small business suppliers, with no value threshold.

We invite all Queensland small business owners and operators to register on the On-time Payment small business register to ensure suppliers to government get paid faster.

Registration is not compulsory but registering your business will mean payment of your invoices will be prioritised.

To register today, visit
www.qld.gov.au/on-time-payments

For more information about the Queensland Government On-time Payment Policy visit
https://www.business.qld.gov.au/on-time-payment.


Do you provide car parking to your employees on your business premises? If the parking meets certain conditions you may have to pay fringe benefits tax (FBT) on those and other benefits you provide to your employees. The ATO has commenced a compliance program that looks at employers that use the market value method to calculate the taxable value of car fringe benefits. Specifically, it is looking at employers that have engaged an arm's length valuer that has produced reports that may not reflect the market value.

The ATO has started contacting certain employers that provide car parking fringe benefits to their employees to ensure that all FBT obligations are being met. Generally, car parking fringe benefits arise where the car is: parked on the business premises of the entity providing the benefit; used by the employee to travel between home and their primary place of employment and is parked in the vicinity of that employment; parked for periods totalling more than 4 hours between 7am and 7pm; and a commercial parking station located within 1 km of the premises charges more than the car parking threshold amount.

Employers that meet the above conditions are providing parking benefits and have a choice of 3 methods to calculate the taxable value of the benefits, the commercial parking station method, the average cost method, and the market value method.

The method currently under ATO scrutiny is the market value method, which states that the taxable value of a car parking benefit is the amount that the recipient could reasonably be expected to have been required to pay if the provider and the recipient were dealing with each other under arm's length.

Under this method, the employer must obtain a valuation report from an independent valuer who has expertise in the valuation of car parking facilities and is at arm's length.

Specifically, the ATO is looking at employers that have engaged an arm's length valuer as required under the market value method. According to the ATO, it has information that valuers in some instances have prepared reports using a daily rate that doesn't reflect the market value and as such, the taxable value of the benefits is significantly discounted or even reduced to nil.

The ATO notes that just engaging an arm's length valuer does not mean you've met all the requirements for working out the taxable value of the car parking fringe benefits. It states that it is the employer's responsibility to confirm the basis on which the valuation is prepared and examine any valuation that is suspected to be incorrect or considerably reduces FBT liability.

At a minimum, the ATO requires that a valuation report must be in English and detail the following:

  • date of valuation;
  • precise description of the location of the car parking facilities valued;
  • the number of car parking spaces valued;
  • the value of the car parking spaces based on a daily rate;
  • the full name of the valuer and their qualifications;
  • the valuer's signature; and
  • a declaration stating the valuer is at arm's length from the valuation.

According to the ATO, in addition to the valuation report, you as an employer will also need a declaration relating to each FBT year that includes the number of car parking spaces available to be used by employees, the number of business days, and the daily value of the car parking spaces.

Not sure?

If you're unsure whether the benefits you provide to your employees are subject to FBT, talk to us. We can also help you determine whether your business qualifies for exemptions under various categories of FBT. If you would like to know more about whether the valuation that you have obtained meets the ATO requirements, contact us today to find out.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

Running a business and ensuring your employees are paid the correct super can be difficult and inadvertent mistakes can be made from time to time. Previously, a mistake may not be picked up for years after it occurs, but with the advent of single touch payroll, the ATO now has more data than ever to ensure that the correct super guarantee payments are made and impose penalties where the payments are not correct. So, if you make a mistake, what are the conditions that you have to satisfy to obtain a remission of the additional super guarantee charge penalty?

With the transition to Single Touch Payroll almost complete for all employers within Australia, the ATO now has considerably more information to identify superannuation guarantee non-compliance in real time. Employers that do not make sufficient quarterly superannuation contributions for each employee by the due date will be liable to the superannuation guarantee charge (SGC), a penalty which is not deductible to the employer.

Generally, SGC equals the superannuation guarantee shortfall, which is made up of the total of the individual super guarantee shortfalls for all employees for the quarter, an interest component of 10% per annum and an administration component of $20 per employee per quarter. If an employer has a shortfall, they are required to lodge a superannuation guarantee (SG) statement by the 28th day of the second month following the end of the quarter.

Where the employer lodges their SG statement late or fails to provide information relevant to assessing liability to SGC for the quarter, they may be subject to an additional penalty of 200% of the amount of SGC. This additional penalty is automatically imposed on the employer by superannuation law.

While the ATO does not have discretion to remit or waive the interest and administration components of the SGC, it does have discretion to remit some of the additional 200% penalty provided the employer satisfy certain conditions. According to information released by the ATO, penalty relief will only be applied on limited circumstances where it is considered that education is a more effective option to positively influence behaviour (ie an employer with SG knowledge gaps that has led to non-compliance).

In addition to the above, an employer is only eligible for penalty relief where they have a turnover of less than $10m and they:

  • do not have a history of lodging SG statements late;
  • have lodged no more than 4 SG statements after the lodgement due date in the present case;
  • have no previous SG audits where they were found to have not met their SG obligations; and
  • have not previously been provided with penalty relief.

An employer cannot receive penalty relief where they have:

  • been issued with an SG default assessment;
  • lodged more than 4 SG statements after the lodgement due date in the present case; or
  • previously been issued with an SG education direction.

The percentage of penalty remission depends entirely on an employer's degree of compliance.

For example, where there is severe/repeated disengagement or where the ATO is of an opinion that the employer has engaged in a phoenix arrangement, there will be no remission of additional penalty, hence the penalty will remain 200% of the SGC. On the other side of the spectrum, where an employer lodges an SG statement after the due date but before any ATO contact (including instances where an employer makes initial contact with the ATO to disclose a shortfall, followed by the lodging of SG statement after discussions), the additional penalty may be reduced to 20% of SGC.

The ATO may also consider other relevant facts of circumstances to further increase penalty remission, including:

  • natural disasters;
  • contractor vs employee – employer has reasonable argument;
  • incorrect advice or guidance by the ATO;
  • malfunction or outage of key ATO system causing employer to miss lodgement due date;
  • ill health of employer or key employee of employer; or
  • non-compliance occurred in the first year of operation, and principals had no previous business experience.

Confused?

If you're running a business, paying the right amount of super at the right time to your employees can be the most challenging part of the business. If you're unsure of whether your business has made the correct super guarantee payments, we can help you work that out. We can also help you liaise with the ATO to obtain the best possible outcome in the event that your business has a shortfall. Contact us today.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au.  © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

In 2018, the ATO issued a controversial draft ruling which took a very strict stance on the four-year time limit for claiming input tax credits and fuel tax credits. The ruling had been used by the ATO to deny input tax credits and fuel tax credits where the Commissioner makes a decision on an objection or amendment request outside the 4-year period. However, a recent observation by a judge ruling on a related matter has put the ATO's strict stance in doubt and as a result, the ruling has been withdrawn.

The ATO has recently withdrawn Draft Miscellaneous Taxation Ruling MT 2018/D1 on the time limit for claiming input tax credits and fuel tax credits. Generally, under s 93-5 of the GST Act, the right to claim an input tax credit expires after 4 years and commences on the day on which the entity was required to lodge a return for the tax period to which the input tax credit would be attributable. Section 47-5 of the Fuel Tax Act has a similar provision which limits claims to 4 years after the date which taxpayers were required to give the Commissioner a return.

The withdrawn draft ruling created much controversy for its strict stance on the four-year time limit rules for claiming the credits. It stated that a tax credit would not be taken into account in an assessment when the taxpayer lodges an objection or requests an amendment, even if the objection or amendment request is made within the 4-year entitlement period. Therefore, the effect of the draft ruling was that if the Commissioner's decision on an objection or amendment request is made outside the 4-year period (but the request by the taxpayer is lodged within the 4-year period), the taxpayer would not have been entitled to the tax credits even if the decision is favourable to the taxpayer.

After the draft was issued however, the Federal Court in Coles Supermarkets Australia Pty Ltd v FCT [2019] FCA 1582 did not quite agree with the ATO stance. It accepted Coles' submissions that s 47-5 is only intended to prevent an ongoing entitlement to claim credits in a later return where a return has not been lodged or credits not claimed.

The Court noted that once a return has been lodged and objected to, there is no scope for the operation of s 47-5 to disentitle a taxpayer to fuel tax credits as the right of the Commissioner and taxpayer are protected by various sections of the TAA

In a decision impact statement following the judgement in the Coles case, the ATO acknowledged that the Court's observations were contrary to its views. Subsequently, it withdrew the ruling conceding that the views expressed in MT 2018/D1 was no longer current. While the Coles decision only refers to fuel tax credits, given the similarity of the provisions between fuel tax credits and the GST Act, and the Court's observations regarding the right of the Commissioner and taxpayer being protected by TAA, it would stand to reason it would also apply to input tax credits. Thus, the ATO is planning to issue a new ruling that takes into account the Federal Court's observations in early 2020.

In the meantime, what it means for affected taxpayers is that, where the Commissioner makes a decision on an objection or requests for amendment in relation to input tax credits and/or fuel tax credits outside the 4-year period (with the initial objection or amendment request lodged within the time limit), taxpayers will no longer be automatically denied the credits in situations where the decision is favourable. As a result, any taxpayer that the draft ruling has affected (ie has had input tax credits or fuel tax credits denied because objections or amendment decisions by the Commissioner had been made outside the 4-year time limit) is encouraged to contact the ATO.

Have you been affected?

If your business has been affected by the denial of input tax credits or fuel tax credits due to this ruling, we can contact the ATO on your behalf to see what remedies can be offered. If you're not sure whether you have been affected, we can also help you figure that out, contact us today.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au.  © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

Looking for opportunities to improve cashflow? If you import goods as part of your business, you don't have to pay GST upfront if you're registered for the ATO's deferred GST scheme. Instead, you can defer and offset GST amounts in your next activity statement. However, there are some eligibility requirements – including a condition that your business lodge activity statements monthly (rather than quarterly). Find out how you can take advantage of the scheme.

If you import goods into Australia as part of your business, your cashflow position is probably top of mind. So, if you're not already taking advantage of the ATO's scheme to defer GST payments on imports, it's time to talk to your adviser. The scheme can benefit not only wholesalers, distributors and retailers, but also any business that imports goods for use in carrying on its business.

Usually, GST is payable on most imports into Australia and goods will not be released until the GST is paid to customs. This can have significant cashflow implications for importers. While you're generally able to claim a credit later for the GST paid, you still need to have the funds to pay the GST at the time of importation.

The ATO's deferred GST scheme allows participants to defer payment of the GST amount until their next business activity statement (BAS) is due.

This means you can start selling or using the imports in your business right away without having to come up with the GST amount when the goods arrive in the country.

Eligibility for the scheme

Businesses who wish to take advantage of this scheme must apply first and be approved by the ATO. To be eligible, you must have an ABN and be registered for GST. You must also lodge and pay your BAS online. This can be done yourself or through your registered tax or BAS agent.

Another key requirement is that you must also lodge your BAS monthly, which means that if you're currently lodging quarterly you'll need to elect to lodge monthly. (When you make this election, the change won't take effect until the start of the next quarter, so you won't be able to defer GST on imports until the start of that quarter.) If this applies to you, you'll need to weigh up whether the deferred GST scheme is worth giving up quarterly BAS lodgement.

Once you're approved for the deferred GST scheme, it's important that you lodge and pay your monthly BAS on time. The ATO may remove you from the scheme if you fall behind, and in this case you'd need to reapply for the scheme.

Timing of the deferral and credits

Once you're approved, your GST amounts on taxable imports will be deferred until the first BAS you lodge after the goods are imported (which for monthly lodgers is due 21 days after the end of the month). The deferred amount is reported electronically by customs to the ATO, who will use this data to pre-fill the "deferred GST" in your BAS.

The deferred GST liability is then effectively offset by a GST credit you can claim for the deferred amount. As with all GST amounts you pay on purchases you make for your business, you can claim a credit for the deferred GST liability on your imports to the extent that you use the goods in carrying on your business (and you can't claim a credit for private use or to make input-taxed supplies). Therefore, the overall effect of participating in the deferred GST scheme is that your GST on imports is deferred and offset, and you aren't required to have funds available to pay the GST when the goods are initially imported.

Could your cashflow be improved?

Contact our office to discuss how the deferred GST scheme could benefit your business or to explore other strategies for improving your cashflow position.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.