Corporate turnaround, Restructuring & Insolvency
COVID-19 – ATO takes steps to help businesses conserve cash
The measures offer significant cash saving opportunities for Australia’s businesses.
As fears surrounding COVID-19’s economic impact deepen, we credit the Australian Taxation Office for acting quickly to support Australian businesses. Last week, the ATO released its “Support measures to assist those affected by COVID-19”. The full release is found here.
The measures offer significant cash saving opportunities for Australia’s businesses, including:
- Payment deferral of up to 4 months for amounts owing in relation to BAS, income tax and fringe benefits;
- Enabling businesses with GST refunds and reporting BAS quarterly to shift to monthly reporting in order to access refunds sooner;
- For businesses paying PAYG quarterly instalments, the opportunity to vary the instalment for March 2020 to nil and also have the instalments for September 2019 and December 2019 refunded;
- Remission of interest and penalties from 23 January onward; and
- Low interest payment plans on existing and ongoing tax liabilities.
Tax liabilities will still accrue and ultimately have to be paid, but for now, being able to hold on to the cash or deploy it elsewhere whilst the coronavirus plays out could be the difference between surviving and failing.
Importantly, it appears that businesses cannot access support automatically – for example as part of lodging the BAS. The ATO must be contacted on its Emergency Support Infoline at 1800 806 218. A support plan can then be tailored.
Also importantly, our advice in our last article, “COVID-19 – Survival planning for small businesses”, still holds in relation to lodgement of returns: businesses must lodge and lodge on time in order to avoid lockdown penalties attaching to directors.
We recommend that businesses act quickly, take advantage of what the ATO is offering, and update their planning for these sources of cash.
Please contact us if you would like guidance during this period of uncertainty.