Tax Obligations
ATO obligations
The ATO offers assistance in times of natural disaster in a number of ways, including:
- providing deferrals for lodgement obligations
- prioritising tax refunds owed to you
- establishing a payment plan for tax owing, tailored to your individual circumstances
- remitting penalties or interest charged during the time that you have been affected
Lodgement Deferrals
The ATO's lodgement deferral function can be found in Online services for Agents. If you need an extended time to complete your lodgement obligations, please contact your Grant Thornton agent for assistance with the deferral application.
ATO Payments, Interest and Penalties
Deferred Business Activity Statements and Instalment Notices
While the lodgement due date for Business Activity Statements and Instalment Notices may be deferred, the payment due date for these deferred lodgements will not automatically change.
The ATO have advised that general interest charge (GIC) will still apply if payment is not made by the original payment due date, however the ATO encourage taxpayers or their tax agent to contact them to discuss payment options, including the remission of GIC if this has been applied.
Based on our experience, the ATO are willing to negotiate tax debt payments by instalments, with a partial or full reversal of general interest charges and any applicable penalties where people have been impacted by extraneous circumstances. For natural disaster affected individuals and businesses, the ATO have confirmed that they will adopt an empathetic approach.
If you require any assistance with discussing a payment plan, the options available to you, or the remission of GIC, please contact your Grant Thornton advisor.
PAYG instalments
As a result of the impact of the floods the level of PAYG instalments being paid to the ATO may no longer be appropriate for your business. Where the change in circumstances would mean that you have already paid too much PAYG, it is possible to claim a credit in your next activity statement. Where payments are still needed but at a lower level, a process is available to vary the instalment level. Please speak to us so we can assist you with this process.
Superannuation guarantee
Where your business has been affected by the natural disaster, difficulties may also be encountered in meeting super guarantee obligations. As an employee entitlement there is currently no relief available from making the Superannuation Guarantee payments. If you cannot make your contributions for a quarter, you must lodge a Superannuation Guarantee Charge (‘SGC’) statement for impacted employees. In an emergency the ATO may extend the time for lodgement of the SGC statement, although no announcement has been made about this to date.
Please be aware that in the instance you are required to lodge a SGC statement, additional costs can arise in the form of a 10 per cent nominal interest, $20 admin fee per employee as well as potential additional penalties (which the Commissioner has discretion to reduce in instance such as natural disaster). SGC must also be calculated on the broader definition of Salary and Wages and will be non-deductible for tax purposes.
We recommend that the SGC statement is lodged as soon as possible to avoid the accrual of the 10 per cent interest component which the Commissioner does not have the discretion to waive. Once lodged, general interest charges (‘GIC’) will accrue on any unpaid SGC. Whilst at this time there is no current directive or relief specific to the recent events, the Commissioner has the power to remit GIC under PS LA 2011/12 in events such as Natural disasters. The ATO has also expressed a willingness to consider the implementation of payment plans for those employers unable to pay the charge within the relevant deadlines.
Please contact us if you would like further advice and assistance on the lodgement of SGC forms, remission of penalties and GIC or arranging a payment plan to be put in place with the ATO.
Fringe Benefits Tax
Our discussions with the ATO have informed us that they are not considering any official disaster relief policies from employers with respect to Fringe Benefits Tax. However, please be aware that there are already existing FBT exemptions for emergency assistance which includes assistance for the immediate relief of a victim of an emergency and the assistance is in the form of:
- first aid or other emergency health care
- emergency meals, food supplies, clothing, accommodation, transport, or use of household goods
- temporary repairs, or
- any similar assistance
Generally, these exemptions are reserved for benefits and relief that are temporary in nature. Please contact us for advice on the specific benefits or relief that you put in place for your employees.
Other tax considerations
In addition to the statutory reporting and payments as required by the ATO, there are some general business considerations that may help you manage your tax obligations.
In respect of GST, it is worth considering any outstanding debts which you believe will no longer be recoverable. Steps should be taken to write these off in order to reclaim the GST as soon as possible. For those whose systems are down, whilst you may not be in a position to process invoices currently, if you are able to maintain a simple records (e.g. a spreadsheet) of the invoices you have received in order to reclaim input tax credits as soon as possible, this may assist with managing cash flow.
Pay-roll tax obligations
Based on previous events, the state revenue authorities have in the past implemented the following measures to assist business in recovery:
- extending the time to lodge documents or returns
- extending the time for amounts to be paid without interest being charged
- arranging for debts to be paid in instalments
Where nothing has been announced, independent applications for relief can be requested from the QRO and Revenue NSW, to allow time for you to get back on your feet.
Reconstructing Records
If your records have been damaged, destroyed or lost because of a natural disaster, the ATO can re-issue or help construct damaged or lost records to support your claim entitlements such as tax deductions, or your access to government payments or concessions.
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