What you need to know
The JobMaker Hiring Credit scheme was passed into law in mid November 2020. JobMaker was part of the 2020-21 Federal Budget, and will operate until 6 October 2021. It is designed to improve the prospects of young individuals getting employment, by incentivising employers to hire them, following the devastating impact of COVID-19 on the labour market.
The scheme will be backdated to commence on 7 October 2020 and provide eligible employers with the following payments for up to 12 months for new jobs created for which they hire the following young workers:
■ $200 a week for hiring a worker aged 16 to 29 on at least 20 hours a week, and
■ $100 a week for those aged 30 to 35.
Although the scheme is slated to run for just 12 months, that period is the hiring period – not the payment period. Eligible employers who hire an eligible employee on the last day of the scheme (6 October 2021), may be eligible
for hiring credits for the subsequent 12 months until 6 October 2022.
The criteria are broad (for example, having an ABN, being registered for PAYG withholding, being up-to-date with lodgement obligations, reporting through STP), however some employers are specifically excluded, as follows:
- employers who are claiming JobKeeper
- entities in liquidation or who have entered bankruptcy
- federal, state, and local government agencies (and entities wholly owned by these agencies)
- employers subject to the major bank levy
- sovereign entities (except those who are resident Australian entities owned by a sovereign entity).
Entitlement to a JobMaker Hiring Credit payment is assessed in relation to three-month periods known as “JobMaker periods”. These periods are relevant for the purposes of the additional criteria (see below). Each of the following is a JobMaker period (inclusive):
|Period 1||7 October 2020 to 6 January 2021|
|Period 2||7 January 2021 to 6 April 2021|
|Period 3||7 April 2021 to 6 July 2021|
|Period 4||7 July 2021 to 6 October 2021|
|Period 5||7 October 2021 to 6 January 2022;|
|Period 6||7 January 2022 to 6 April 2022|
|Period 7||7 April 2022 to 6 July 2022|
|Period 8||7 July 2022 to 6 October 2022|
Key to the scheme is that employers must have hired additional eligible employees. The additional criteria for the first four JobMaker periods requires that there is an increase in:
■ the business’s total employee headcount (minimum of one additional employee) from the reference date of
30 September 2020; and
■ the payroll of the business for the reporting period, as compared to the three-months to 30 September 2020.
The following is an example provided by Treasury for an increase in headcount:
Lisa employs two new staff, Emma aged 28 and Jessica aged 32, who both start on 7 January 2021 and meet the employee eligibility requirements.
Angus resigns from his job at Lisa’s business, effective as at 7 January 2021. When claiming for the March quarter reporting period (7 January 2021 to 6 April 2021), Lisa again compares her current situation to her baseline:
- On 30 September 2020, her baseline headcount was 2 and her quarterly payroll was $30,000.
- On 6 April 2021, her headcount was 4 and her payroll for the reporting period was $52,000.
SINGLE TOUCH PAYROLL
When your reporting can cease
A business may no longer be required to
lodge single touch payroll (STP) reports for a
number of reasons. These are if your business
no longer has employees, has ceased
trading, has changed structure, is not paying
employees for the rest of the year, or has
paused due to COVID-19. Depending on your
business’s situation and circumstances, what
you need to do may be different.
NO LONGER EMPLOYING STAFF
If you cease employing staff and continue trading
without employees, you must submit a finalisation
declaration to the ATO for all your employees as part of
your STP reporting.
Once you do this, the ATO will pre-fill the employees’
income tax returns and display the information as
“tax ready” in their myGov at the end of the financial
year. You can make a finalisation declaration at any
time during the financial year when you have ceased
When you have finalised your STP obligations, you
can cancel your pay-as-you-go (PAYG) withholding
registration to let the ATO know that you are no longer
CLOSING A BUSINESS
If you are ceasing trade, before you close your business
and cancel your Australian business number (ABN), you
must bring all your lodgement obligations up to date,
including STP reporting.
As part of your STP reporting, you will need to make an
STP finalisation declaration for all of your employees.
Once you do this, the ATO will pre-fill the employees’
income tax returns and display the information as “tax
ready” in their myGov at the end of the financial year.
You can make a finalisation declaration at any time
during the financial year. When you have finalised
your STP obligations, you can cancel your PAYG
withholding registration to let the ATO know that you
are no longer employing staff. Once this is done, you
should cancel your goods and services tax (GST) and
ABN registrations so the ATO knows you have ceased
trading. Of course we can help you with all of this.
Single touch payroll: When your reporting can cease
It is important that you finalise all outstanding STP
reporting before you cancel your ABN and your
software subscription, in order to meet your STP
obligations. If you’re a company but no longer carry
on a business, you can choose to keep your ABN
registration. However, you must cancel your GST
and PAYG withholding registration and lodge an STP
CHANGES TO YOUR BUSINESS STRUCTURE
If your business structure changes, the ABN and
branch under which you have been generating your
STP reporting may change. If this occurs, you must:
- finalise your STP reporting under the ABN
and branch you have been using for your STP
- § start your STP reporting under the new ABN
and branch using zero year-to-date employee
It is important to finalise your STP reporting
under the ABN and branch before you lose
access to it, or it is cancelled or deregistered.
NO PAYMENTS TO EMPLOYEES FOR
THE REST OF THE YEAR
If you won’t be paying any employees for the rest
of the financial year, or for a period greater than
your reporting obligations, you should lodge a “No
requirement to report” notification. To do this, lodging
via the ATO’s Business Portal, select: “Manage
employees”, then “STP deferrals and exemptions”, and
select “No requirement to report”.
PAUSING YOUR BUSINESS DUE TO COVID-19
If your business has been paused due to COVID19 and, at present, you are not employing and not receiving JobKeeper payments, you should lodge a “No requirement to report” notification (as per the above process).
JobMaker hiring credit: What you need to know cont
These are those who commenced employment between
7 October 2020 and 6 October 2021; were aged
between 16 and 35 years at the time they commenced
employment; have worked an average of 20 hours a
week for each whole week the individual was employed
by the qualifying entity during the JobMaker period.
Additionally the worker must have met the preemployment condition, which requires that for at least
28 of the 84 days (that is, for 4 out of 12 weeks)
immediately before the commencement of employment
of the individual, the individual was receiving at least one
of the following payments:
- parenting payment
- youth allowance (except if the individual was receiving
- this payment on the basis that they were undertaking
- full time study or was a new apprentice), or
- JobSeeker payment.
Note that the new worker must be in a genuine
employment relationship. For example, “non-arm’s
length” employees will not be considered eligible
employees. This includes family members of a family
business, directors of a company and shareholders of a
PARTICIPATION AND NOTIFICATION
To be entitled to the JobMaker Hiring Credit payment
in relation to a JobMaker period, employers must have
notified the Commissioner in the approved form of
its election to participate in the scheme no later than
by the end of the period that the entity first elects to
participate. For example, for an entity that elects to
participate for the JobMaker period of 7 January 2021
to 6 April 2021, the notice must be provided to the
Commissioner by 6 April 2021.
The reporting requirements will include the details
of employees that have commenced or ceased
employment during a JobMaker period and the entity’s
payroll amount. The Commissioner will also specify that
the information must be provided through the STP
Getting a tax valuation from the ATO
Not every individual situation fits neatly with the tax laws as they stand — sometimes a taxable item’s known value (and therefore the tax that applies to it) may need to be determined.
Many tax laws require the taxpayer to determine the
market value of something. Common instances include:
- for individuals – transfers of real estate or shares
- between related parties, such as family members
- for employees – non-cash benefit transactions, such as gifts or other benefits such as car parking
- for small businesses – transfers of assets to related parties, or passing the asset threshold tests for the small business capital gains tax concessions
- for property developers – the GST margin scheme
- for businesses – consolidation events
- for all taxpayers – many anti-avoidance provisions.
Particularly for capital gains tax purposes, there are a number of instances where a valuation may be necessary. In doing this, there are two choices:
- ask the ATO to provide the valuation, or
- provide the ATO with a valuation of the item and ask it to confirm that valuation.
The ATO may take the option to use a professional
valuer to undertake or review your own valuation. The
valuer usually charges the ATO a fee, which the law
allows it to pass onto you. Consequently, if you apply for
a private ruling requiring a valuation, it is also required
that you pay for the work of the valuer.
The ATO says that for tax purposes, the acceptability
of a valuation usually depends on the valuation process
undertaken rather than who conducted it. However,
there are some exceptions. For example, only a
professional valuer may undertake a market valuation for
GST margin scheme purposes or for determining nonmonetary consideration for GST purposes.
Except for the most straightforward valuation processes,
valuations undertaken by people experienced in their
field of valuation would be expected to provide more
reliable values than those provided by non-experts.
According to legal precedent, experts who assess
market value should have specific knowledge,
experience and judgement in that particular field.
While professional qualifications may add weight to
the valuer’s opinion, they should also display personal
integrity and competence. To ensure the objectivity of
the report, the valuer should be independent of the party
commissioning the report.
Getting a tax valuation from the ATO cont
The valuation process should be adequately
documented; if it isn’t, the ATO may not accept the
resulting value as a market value.
Whenever the ATO uses a professional valuer, it will first
give an estimate of how much the valuer will charge.
This amount is generally required to be paid before the
ATO will proceed. If however the valuation work has
already started, it will generally be required that you pay
for the work already undertaken.
If you provide the ATO with a valuation that meets the
requirements set out in ATO guidance Market valuation
for tax purposes (most search engines will find this
for you), it will generally cost less to confirm it than to
undertake a new valuation.
If the ATO decides that the valuation you have provided
is not acceptable, before it issues a private ruling the
ATO will ask if you want to either:
- submit a new valuation for review, or
- ask the ATO to provide the valuation
You will need to pay any further costs the professional
valuer charges to the ATO. And if the ATO does not
receive any such advice, it generally will issue a private
ruling stating that your valuation is not acceptable and
that it will not provide an alternative valuation.
What happens when applying for a private ruling about the value of an item?
When the ATO receives an application for a private
ruling that asks to determine or confirm the value of a
thing, the following occurs:
- if it needs to use a professional valuer, before it starts the valuation process it will tell you, and ask you to agree in writing, to use a professional valuer
- it will ask for your input when selecting and instructing a valuer
- it will ask the professional valuer to provide a quote for the work – either to value the thing, or to review the valuation that has been supplied
- the ATO will provide a copy of the valuer’s quote, which contains
- the cost of their work
- the time it will take to provide a report
- any additional information they require to complete the work.
For complex valuation cases, the valuer may need to do
the work in stages. In these situations, they will provide
a quote for each stage before starting work on it. And
before the valuer starts work, the ATO will ask you to:
- pay the estimated amount for the relevant stage, and
- provide any additional information the valuer requests.
Within 28 days of receiving the quote, you need to pay
the quoted amount, which may be the whole amount or
the amount for the stage in question.
The ATO generally does not ask the valuer to do the
work until payment is received. Once the ATO receives
your payment, it will:
- ask the valuer to start the work, and
- send you a receipt for your payment.
The receipt the ATO issues is also a tax invoice – for
which you may be able to claim the GST included in
the valuer’s fee as a GST credit. Also note that as the
cost of the valuation work is considered to be a cost
of managing your tax affairs, it may be deductible for
income tax purposes.
The ATO will tell you:
- when the valuation is finished or confirmed, and
- if there are any changes to the final cost of the valuation or review.
It will then either:
- refund any extra amount you paid, or
- ask you to pay any shortfall.
If there is a shortfall, this will need to be paid this before
the ATO will provide your private ruling. Generally
however, it can complete your private ruling within 28
days of receiving the valuer’s report.
Private rulings involving a valuation may take longer than
other private rulings because of the possibility of having
to engage a professional valuer. Generally, the ATO
will make contact within 14 days of receiving such an
application to discuss an appropriate reply date.
Natural disasters and help with your tax
Now that we are into bushfire season, and with flooding events having already occurred, it is perhaps timely to be reminded that as well as the more obvious immediate devastation inflicted on people’s property, destructive events such as fires or floods can also mean loss of income for the affected people. This can come about not only directly, but also in terms of damage done to workplaces, income-earning tools of trade, vehicles and essentials such as computers and other equipment.
The ATO says that if you are affected by natural
disaster, such as bushfires, floods or storms, there
is generally no need to worry about your tax affairs right
away. It says it will give you time to deal with your more
immediate problems first, and has a dedicated phone
number (1800 806 218) to provide information about
what support it can offer.
MORE TIME TO LODGE, PAY AND RESPOND
The ATO says that your tax obligations can generally be
put to one side until you have dealt with the immediate
effects of the disaster – whether you are affected
yourself or are helping those affected. It can allow more
time to settle tax debts, or if you are unable to lodge
your return or activity statement, or cannot immediately
deal with any other correspondence that may be
currently on the table.
The ATO also says that if a business owner is unable
to lodge a superannuation guarantee charge (SGC)
statement, it can give you more time to lodge, although
you will still be liable for the SGC and the nominal
interest component will continue to accrue. You may be
able to vary the amount of your next instalment if you
are liable to pay under the Pay-As-You-Go instalments
Natural disasters and help with your tax cont
the work you do restores it to its original condition
or goes beyond remedying the damage to the point
where it is an improvement or a complete replacement.
Significant capital gains tax concessions may also apply.
Talk to us for guidance in this regard.
RECONSTRUCTING YOUR TAX RECORDS
If your records have been lost or destroyed — whether
you are an individual, in business, or responsible for a
self-managed superannuation fund — talk to this office
about how we can help. The ATO can also provide
assistance to help reconstruct your tax records and
make reasonable estimates where necessary
FUEL TAX CREDITS FOR INDIVIDUALS,
BUSINESSES AND OTHERS
Following a disaster, you may need to use taxable fuel
(such as diesel or petrol) for generating electricity for
domestic purposes; you may then be eligible to claim
fuel tax credits. Businesses that are registered for goods
and services tax (GST) can claim credits for the fuel tax
included in the price of fuel used in eligible business
activities to run machinery, plant, equipment and heavy
vehicles. Non-profit organisations that are not registered
for GST can claim credits for fuel used in operating
emergency vehicles or vessels.
EARLY ACCESS TO YOUR MONEY
If you are expecting a refund from an income tax
return or activity statement, the ATO may be able to
arrange for your refund to be issued as a priority. In
limited circumstances, you may be able to access your
superannuation to assist you and your dependants, but
special consideration will need to be sought.
After a natural disaster, it may be the case that you
receive assistance from government authorities,
charitable institutions, employers, your family, a trade
union or other sources. Most one-off assistance
payments are tax free, but regular Centrelink payments
DAMAGED OR DESTROYED PROPERTY
If your property is damaged or destroyed in a disaster,
you may receive an insurance payout if you had
appropriate cover. How this is treated for tax purposes
depends on the type of property and whether or not
the property is income-producing. Repairs to income producing properties are generally tax deductible in the year you incur them. However, this depends on whether
See the government’s
for current disaster
assistance and other
Also ask this office should
you require help with lost
records, lodging forms,
payments, assistance in
getting a faster tax return