COVID continues to bring change to the way we manage business. Here are the immediate changes you should be planning for now.

JobKeeper phase 3 ends at the end of March – HECS-style loans being considered

If you receive JobKeeper and the deadline makes you nervous, start planning now. Meet with your accountant to identify the risks, opportunities and options available to you.

The federal government has not ruled out HECS-style credit for businesses who continue to feel the effect of COVID restrictions. Repayments would be based on turnover. At the time of writing this, it has not been legislated.

Overpaid JobKeeper subsidies are being reclaimed by ATO

$340 million in JobKeeper subsidies have been overpaid to businesses since the stimulus measure was introduced last March. 

The ATO has recovered about $135 million of those payments and is still pursuing about $150 million.

However, the tax office will not be seeking to recover another $50 million, which was overpaid as a result of genuine mistakes made by businesses.

Voluntary JobKeeper repayments to the ATO may not be tax deductible

Some large companies, including Toyota and Super Retail Group, have made headlines by voluntarily donating some of their JobKeeper payments back to the Australian Tax Office (ATO). While the action is honourable, given the payments were internally deemed in excess of their needs, it is yet to be determined as to whether the money returned can be removed from their assessable income.

The ATO has been called to clarify whether voluntary refunds have been ‘necessarily incurred’, and therefore tax deductible. It definitely pays to ask your accountant, who will have a direct line to the ATO, before taking action with JobKeeper.

Car fringe benefits

If you provide a car parking benefit for an employee, and that employee is working from home, you do not have an FBT obligation for that period.

If you provide a car to an employee, and that car is garaged at your employee’s home and still being used for personal use, you do have an FBT obligation. You don’t have an obligation if your business has taken possession of the car for the period that they were unable to use if for work purposes.

Working from Home tax shortcut extended

The ATO has extended the shortcut method on claimable expenses when working from home until the end of the Financial Year. This involves a flat rate of 80 cents per hour for all running expenses for the hours you work at home, instead of calculating costs for specific running expenses. Claimable expenses include phone and internet expense, decline in value of equipment and furniture, and costs associated with gas and electricity for heating, cooling and lighting.

Reminder – plan your tax now: Now is the time to be booking your Pre-June review with your accountant. An effective Pre-June review will involve a 1:1 deep-dive with your accountant on how to save tax. By the time it is June, it is too late to act on this kind of thinking. It will also include a tailored budget for 2021 so that you know in advance how the year will end, and how you are tracking against your focus areas in the business. The increased levels of control over your final tax outcome gives you the freedom to run a growing business.