Latest tax and business developments

Intro
Welcome to CPA Australia's COVIDChat, a weekly podcast to answer your questions about the latest news and developments impacting business.

Dr Jane Rennie:
Hello, I'm Dr. Jane Rennie, General Manager, External Affairs, at CPA Australia.

Gavan Ord:
And I'm Gavin Ord, Senior Manager of Business and Investment Policy, also at CPA Australia.

Dr Jane Rennie:
It's Monday, the 25th of October, and you're listening to COVIDChat, bringing you this week's need to know information for businesses and accounting professionals.

Dr Jane Rennie:
To start with, today we're joined by CPA Australia's Senior Manager of Tax Policy, Elinor Kasapidis, to talk about recent tax developments affecting business and accounting professionals. And to bring us home, Gavin will give an update on a recent announcement involving COVID reopening roadmaps, and how to prepare for COVID outbreaks in locations that have, until now, been relatively COVID-free.

Dr Jane Rennie:
Elinor, last week, the ATO released its 2020-21 annual report, which it described as one of the biggest in the ATO's history. Why is that?

Elinor Kasapidis:
The reason is, like for everything at the moment, COVID. The ATO's annual report really is heavily focused on its rollout of JobKeeper, the cash flow boost, as well as the other government stimulus measures that were announced and implemented last year, which were really, really successful.

Elinor Kasapidis:
We avoided a recession. It gave the right signals to people at the right time, and it was amazing how the ATO and government and treasury utilised the existing systems that the ATO had in place to design a stimulus measure that could be rolled out very quickly.

Elinor Kasapidis:
And we have, with the benefit of hindsight, a lot of discussions around, and inquiries around, could it have been done better? How were some of the integrity measures implemented?

Elinor Kasapidis:
But overall, I think the annual report highlights the volume of money that was released, over $90 billion in economic support. That infrastructure that the ATO has been investing in for so long really came to help out a lot of Australian individuals, taxpayers, and businesses.

Dr Jane Rennie:
Of course, one of the things that the ATO did to support businesses and individuals was to offer lodgement and payment deferrals, as well as flexible payment options, including interest-free payment plans. This is consistent with what they announced last week, regarding the shortcut rate method for claiming work from home expenses. What can you tell us about this, and what do taxpayers and tax agents need to be doing now, if they want to rely on this next tax time?

Elinor Kasapidis:
Thanks, Jane. Just on the lodgements and the payment deferrals, the ATO is continuing its COVID-friendly approach. They're really emphasising that they want to stay in touch with taxpayers and their tax agents. So it's not about blanket deferrals or automatically generated responses.

Elinor Kasapidis:
It is about engaging and maintaining a connection, and to hear from taxpayers and their tax agents about what's going on with their business, or with their individual circumstances, to create a solution that can work for them. In a similar vein, I think the ATO has realised that the impacts of COVID continue, particularly for those in lockdown states with New South Wales, obviously starting come out of it, Victoria's got a few freedoms back, as well. But they have extended the shortcut method for work from home deductions for employees and business owners.

Elinor Kasapidis:
That really solidifies what was a big incentive last year, they were keeping things really simple, a lot of people weren't used to working from home. So this 80 cents per hour shortcut method being extended to the 30th of June, 2022 is a really helpful signal, and provides certainty.

Elinor Kasapidis:
The rules haven't changed. People just need to keep a record of the hours worked from home. Obviously, though, there will be changes in behaviour, as many more people start to return to the office. And in certain states, they won't be claiming it all.

Elinor Kasapidis:
I would anticipate, as well, that the ATO would be doing their nearest neighbour matching. So they'll be looking to make sure that people are claiming what they see as a similar amount to other people that are in the same situation as them.

Dr Jane Rennie:
Also last week, the Commissioner of Taxation announced that businesses will be able to register for up to four business categories under a single ABN. Is this another helpful development?

Elinor Kasapidis:
It is. We've been hearing from businesses that have missed out on state government support, or other kinds of benefits, simply because they hadn't got their ANZSIC codes updated. The ANZSIC code is what they use to categorise their business.

Elinor Kasapidis:
I will say it took us a little by surprise, but it is a very positive thing, because most businesses or many businesses today don't just do one thing, they actually have a variety of activities. And in the entrepreneurial spirit of Australian business, it'll be good to be able to reflect that, not just to government, but also to customers who might look up their ABN to verify that it's correct.

Elinor Kasapidis:
Also to the ATO, because it gives them a better picture of the business operations, the kinds of deductions that might be claimed, the kinds of GST that they should be collecting and remitting, so that granularity of data, so that greater picture that can be built of a business's operations is helpful, because it creates transparency, and allows users of that information to tailor the service, be it grant delivery, or a customer looking to find a business that operates in a certain sector. So I think it's part of this Modernising Business Registers programme, in a sense, of making things more accessible.

Elinor Kasapidis:
Also, it really addresses one of those critical bugbears that occurred with that state grant rollout, where these mismatches of ANZSIC codes, or outdated ANZSIC codes, were limiting people's successful applications. So yeah, we're very happy with that.

Elinor Kasapidis:
Of course, the ATO will be able to more accurately profile businesses, but that is something where, when you operate in the system, it's give and take you. You benefit from the concessions and the grants and the support that are given. And you also provide that picture back to the government of your business.

Dr Jane Rennie:
Also, Elinor, while we've got you here, I wanted to ask you about the start of the Director ID regime. The Australian Business Registry has recently launched its website in preparation for this. So what do directors and company secretaries need to know?

Elinor Kasapidis:
The ABRS is starting to become a lot more visible. Of course, the application process, the ABRS has signalled, will start in November. Not a specific date, so we don't know whether it will be the first or the 22nd of November, which is the date in the legislative instruments, but they're getting ready.

Elinor Kasapidis:
Director IDs? Every director or every eligible director will need to obtain a director ID on their own, as an individual. So their tax agent can't do it for them, their asset registered agent can't do it for them, they need to do it themselves.

Elinor Kasapidis:
What that means is that for most people, an online application process, using a myGov ID approach, will help them and be the fastest. So a lot of directors, right now, they can set up their myGov ID. Once the ABRS opens up the application process, they can then get their director ID.

Elinor Kasapidis:
For those who are overseas or have other difficulties getting a myGov ID, there are paper- and phone-based processes being prepared, and the ABRS is constantly updating its website. Of course, this is part of a broader programme, the Modernising Business Registers programme.

Elinor Kasapidis:
Really, it's about directors and company secretaries and asset registered agents just being prepared for the changes that are coming. Once director IDs are in place and existing directors do have until the 22nd of November next year, so 2022, to get their director ID.

Elinor Kasapidis:
But once that's established, there will be a record migration of all of the company information from ASIC to the ABRS. Through this process, there will be linking requirements, and that whole, I guess, process of data cleansing, data matching, and making sure everything's right.

Elinor Kasapidis:
So I think right now, it's pretty much, be aware that this is coming, start the process of getting director IDs, perhaps as annual renewals come to you. And just be aware that the migration is on the cards as well.

Dr Jane Rennie:
Thanks very much for joining us today, Elinor. And Gavin, now we'll give our listeners an update on roadmap and business grants.

Dr Jane Rennie:
I understand that Queensland Tasmania have each made announcements about their border reopening plans. What can you tell us about what's going on in these states?

Gavan Ord:
Yeah, thanks, Jane. As you said, these are just border reopening plans. To cut to the chase, Queensland will effectively open around about the 17th of December. If you are fully vaccinated, you can travel to Queensland without having to quarantine, but you must have a test within 72 hours of arriving in Queensland.

Gavan Ord:
Tasmania effectively reopens on the 15th of December, so two days before. If you travel, you can travel to Tasmania for anywhere in Australia, again, long as you are fully vaccinated, 12 and above, and as long as you've had that test within 72 hours of arrival.

Gavan Ord:
Just to reemphasize, both situations, you don't have to quarantine at all, but if you are unvaccinated, you will be required to quarantine for 14 days. I would add that Queensland is reopening at 80% fully vaxxed, whereas Tasmania's opening 90% fully vaccinated.

Gavan Ord:
There was some discussion that Tasmania might start to reopen around the 1st of December, to get a jump on Queensland, but obviously, they decided not to do that. But there was an opportunity for Tasmania to go a bit earlier, but they've obviously decided not to do that.

Gavan Ord:
WA? So WA, what can I say? No announcements yet. The Premier and the Health Minister have recently said that they might be making commentary on their state's reopening when that state gets to around 80% fully vaccinated, which is expected in mid-December. But the Premier also stated last week that WA borders will remain shut to New South Wales and Victoria until at least the end of the year.

Gavan Ord:
South Australia and Northern Territory, no plans yet have been announced. I understand that South Australia are awaiting modelling before they announce their reopening plan.

Gavan Ord:
I know we're going to get to this, but what these end of lockdown means, particularly in Queensland and Tasmania, is that COVID will obviously get into those states. What we don't know yet from both of their states is, what will be their plan to manage a COVID outbreak?

Dr Jane Rennie:
Over the weekend, Victorians experienced their first taste of freedom in quite some time, as well as additional announcements about changes to the timetable for the roadmap. What are the new key dates that we now know for Victoria?

Gavan Ord:
Yeah, thanks, Jane. It was good to be able to get out, and actually order something from a restaurant. So that was a good experience for many of us.

Gavan Ord:
But yeah, in terms of what's coming up next, so the next critical date is Friday, the 29th of October, at 6:00 p.m. From that date, all retail open to fully vaccinated people, pubs, clubs, restaurants, et cetera.

Gavan Ord:
Cafes can have more people in their premises sitting, and again, to fully vaccinated people. In the workplace, you can go to work from Friday at 6:00 p.m., but again, only if you're fully vaccinated.

Gavan Ord:
In terms of masks, masks must, however, continue to be required indoors. So we haven't seen the full public health order, but we expect that that will mean you'll still have to wear a mask in the office from next Friday.

Gavan Ord:
The next critical date is the 24th of November. From that date, again, only for fully vaccinated people, you can return to work. Venues can operate at maximum capacity, so all the density quotients go from the 24th of November, and masks will only be required in exceptional, limited high risk indoor circumstances, and we don't know what that means.

Gavan Ord:
Again, for all those, it's only for fully vaccinated people. In comparison, New South Wales is reopening of sorts to unvaccinated employees and patrons from the 1st of December. However, at the moment, in New South Wales, from the 1st of December, there will still be some density limits to those people, to those businesses.

Dr Jane Rennie:
Grants and grant announcements have certainly been slowing down, and in many cases drying up, but there have been a couple of recent announcements in Victoria. The state opened its construction industry grant. What can you tell us about this one?

Gavan Ord:
Just quickly, smaller construction firms with up to $10 million in turnover that were shut during that Victorian lockdown of the industry, they'll be able to apply for grants of $2,000, for a sole trader, up to about $8,400. The applications close on the 9th of November.

Dr Jane Rennie:
Tasmania has launched a grant for businesses impacted by its recent weekend lockdown. What can you tell us about this one?

Gavan Ord:
Yeah. Those will recall, some in Tasmania went through a lockdown, not this weekend, but the weekend prior. Businesses can apply for a small grant of up to $1,000 for a three-day lockdown. However, if you have perishable stock that was lost, you can apply for a grant of up to $10,000 to cover that perishable stock.

Dr Jane Rennie:
Gavin, just to finish with, earlier you mentioned that there is a sense of an inevitability that when borders do reopen, COVID will slip into locations which have previously avoided a major outbreak. What can businesses do to prepare themselves for these COVID incursions?

Gavan Ord:
Yeah, thanks, Jane. I think the first thing is to encourage as many of staff to be vaccinated as possible. We have seen in Victoria and New South Wales that if there is to be a business specific lockdown, the quarantine requirements will be easier for fully vaccinated staff.

Gavan Ord:
If your business happens to be required to lock down because of a COVID case, your unvaccinated staff, sorry, your vaccinated staff may be able to come back to work earlier. So I think that's the first thing.

Gavan Ord:
The other thing is, given we don't know how Queensland and Tasmania will react, I think it's important that businesses that haven't invested in their systems do so. And what I mean by, in systems, I mean, the ability of their staff to work from home at very short notice.

Gavan Ord:
If you haven't already done, just test how your systems can cope with all your staff working from home with a few hours' notice. And I think that's critical in your COVID response to this reopening period.

Dr Jane Rennie:
If you've got a question about any of the topics we've discussed today, or any of CPA Australia's policy and advocacy work, please e-mail [email protected]. If you've enjoyed what you've heard, please tune in again next week, and tell your friends. From all of us here at CPA Australia, thanks for listening.

Outro:
That's our episode for this week. Thanks for listening. To ensure you don't miss an episode, subscribe to the CPA Australia Podcast Channel on your favourite app. And for more COVID resources, guides and information, visit CPA australia.com.au/covid.