Special COVID-19 Superannuation Condition of Release Extended

Regulations  that  extend  the  time  frame  of  the special  condition  of  release  to  access  
$10,000 from superannuation for individuals experiencing financial difficulties due to COVID-19 
have been formally registered.
The   ability   to   withdraw   up   to   $10,000   from superannuation (if certain conditions are 
met) was initially set to expire on 24 September 2020.
The newly registered Regulations to the SIS Act will now enable an eligible individual to withdraw 
up to $10,000 from superannuation (which is not assessable to the individual) until 31 December 
2020.
To be eligible, a citizen or permanent resident of Australia  (and  New  Zealand)  must  require  
the COVID-19 early release of super to assist them to deal with the adverse economic effects of 
COVID- 19.
In  addition,  one  of  the  following  circumstances must apply:
θ    The individual is unemployed;
θ    The individual is eligible to receive one of the following;
–      JobSeeker payment;
–      Youth Allowance for job seekers (unless they are undertaking full-time study or are a new 
apprentice);
–      Parenting payment (which includes the single and partnered payments);
–      Special Benefit; or
–      Farm Household Allowance;
θ    On or after 1 January 2020 either;
–     they were made redundant;
–     their working hours were reduced by 20% or more (including to zero); or
–     they were a sole trader and their business was suspended or there was a reduction in turnover 
of 20% or more (partners in a partnership are not eligible unless the partner satisfies any other 
eligibility criteria).


Tax treatment of JobKeeper Payments

Broadly,  JobKeeper  Payments  received  by  an employer are assessable income to the employer.
Likewise,      the      payments      an      employer subsequently  makes  to  an  employee  that  
are funded  (in  whole  or  in  part  by  the  JobKeeper Payment)  are  generally  allowable  
deductions  to the employer.
The ATO has recently issued some guidance for employers in receipt of JobKeeper Payments.
For  sole  traders,  they  will  need  to  include  the payments as business income in their 
individual tax return.
For  partnerships or  trusts, JobKeeper  payments should  be  reported  as  business  income  in  
the relevant partnership or trust tax return.
For  a  company,  report  JobKeeper  payments  as income in the company tax return.
For a taxpayer that has repaid (or is in the process of repaying) any of their JobKeeper payments 
to the  ATO,  these  amounts  do  not  need  to  be included in their tax return.

Note  a business would be  refunding JobKeeper payments to the ATO if it had been discovered that 
the business had incorrectly claimed JobKeeper payments,  and  had  either  voluntarily  disclosed 
this   to   the   ATO,   or   the   ATO   made   this determination as a result of audit activity.

The normal rules for deductibility apply in respect of   the   amounts   a   taxpayer   pays   to   
their employees,   even   where   those   amounts   are subsidised by the JobKeeper payment.
That is, if the underlying salary is deductible, then it is still deductible to the employer where 
it has been subsidised by a JobKeeper payment.
For  employees  who  have  received  JobKeeper payments,  these  will  be  included  as  salary and 
wages (or an allowance) in their income statement (or   payment   summary)   as   provided   by   
their employer.
If  you  have  any  queries  about  the  JobKeeper Payment scheme, please contact our office.


Deduction for work-related vehicle expenses disallowed

In   a   decision   of   the   Administrative   Appeals Tribunal,  a  taxpayer,  Mr  Bell,  was  a  
denied  a deduction for $21,565.73 of work-related vehicle expenses for the 2016 income year.
Mr    Bell,    was    a    construction    worker    who predominantly worked on a construction 
site in an eastern    suburb    of    Melbourne    and    lived approximately  100  kilometres  
away  from   that worksite.
Mr  Bell  owned  a  ute  that  had  a  load  carrying capacity of more than one tonne – so it fell 
outside the definition of a 'car' for the purposes of the ITAA 1997.
Mr Bell claimed a total deduction for $24,865.73 for  motor  vehicle  expenses   and  received  an 
allowance    under    his    Enterprise    Bargaining Agreement.
This  allowance  did  not  vary with  the  amount  of travel  undertaken  and  totalled  $15,221  
for  the year.
Mr Bell contended that he was required to use his vehicle  to  transport  heavy/bulky  goods  
(tools) between  his  home  and  his  workplace  and  to collect  supplies  and  equipment  from  
hardware stores while travelling between his workplace and his home.
Ordinarily,  travel  from  home-to-work  (and  back again) is considered non-deductible.  However, 
if an employee is required to carry heavy/bulky
equipment   for   which   there   are   no   secure storage  facilities  at  work,  the  travel  
between home and work  with the heavy/bulky equipment can be considered deductible.
Unfortunately  for  Mr  Bell,  evidence  before  the Tribunal indicated that there were safe and 
secure storage  facilities  for  his  tools  (the  bulky/heavy equipment) at the worksite.
Accordingly, Mr Bell was unable to rely upon the ‘bulky goods’ exception to recharacterise home- 
to-work   travel   as   being   a   deductible   work expense.
Instead, it  retained its ordinary private and non- deductible status.
Mr   Bell   was   unsuccessful   in   advancing   the argument that he was entitled  to a deduction 
in relation to the motor vehicle expenses because he was in receipt of an allowance.
However, Mr Bell was able to convince the ATO that he had undertaken at least some work-related 
travel using his vehicle.  The ATO allowed Mr Bell a   deduction   under   the   'cents   per   
kilometre method'  up  to  the  maximum  dollar  amount  for 5,000  kilometres  for  the  2016  
income  year  of
$3,300.

Editor:   This decision provides a timely reminder that  simply  carrying  bulky  equipment  
between home   and   work   will   not   make   these   trips deductible, where there is a secure 
place for the equipment   to   be   stored   at   the   employee’s worksite.  The decision also 
highlights the fallacy of assuming that being in receipt of an allowance somehow  entitles  the  
taxpayer  to  an  offsetting deduction.
The taxpayer was technically 'lucky' that he was allowed    the    'cents    per    kilometre    
method' deduction  for  work-related  travel,  given  that  his motor vehicle fell outside the 
definition of a 'car'.
This is because the cents per kilometre method only applies to 'cars', so it could be said that the 
ATO  was  generous  to  the  taxpayer  in  these circumstances.

Please contact our office if you have any queries as to the deductibility of work-related travel.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

​This measure will provide a credit of minimum of $2,000 and a maximum of $25,000 to eligible businesses that employ workers with an annual turnover under $50m.
 
The credit will be applied in the Business Activity Statements for the quarters ending 31 March 2020 and 30 June 2020.  Monthly GST or PAYG withholding remitters who lodge Instalment Activity Statements will claim the credit in the activity statements for the months of March, April, May and June 2020.
 
The credit is calculated as the greater of $2,000 and 50% of the amount of PAYG withholding tax withheld from employee’s salary and wages up to a maximum of $25,000.
 
Monthly withholders calculate the credit at three times (150% the rate).
 
The credit will reduce the balance of the business activity statement liability and where this places this places the business in a refund position, the ATO will refund the credit within 14 days.
 
Calculation Examples
Quarterly withholder:

​Monthly withholder:

Note:
 
1.  your business does not have to apply for the credit. 
2.  if your business employs you will receive a credit of at least $2,000.
2.  your business may not receive a cash payment if your business GST, PAYG withholding and income tax obligations are greater than the credit.
 
Further information is available from The Australian Government Treasury website here:
https://treasury.gov.au/coronavirus/businesses