ATO extends bushfire assistance: lodgements deferred

On 20 January 2020 the ATO announced an extension of the tax assistance package for people impacted by the 2019–2020 bushfires in New South Wales, Victoria, Queensland, South Australia and Tasmania.

Commissioner of Taxation Mr Chris Jordan said the 3.5 million businesses, individuals and self managed super funds (SMSFs) in the impacted local government areas will have until 28 May 2020 to lodge and pay BASs and income tax returns. This additional time is on top of the two-month extension previously granted.

Additionally, the ATO said it will fast-track any refunds that are due to taxpayers in the impacted regions. For example, businesses expecting a refund as a result of GST credits due to large purchases to replace stock are encouraged to lodge their activity statements at the first opportunity. The ATO will also remit any interest and penalties applied to tax debts since the commencement of the bushfires. Mr Jordan said taxpayers or their agents in the affected areas do not need to apply for a deferral, a faster refund or remission of interest or penalties. This will be done by the ATO automatically (except for large PAYG withholders). Affected taxpayers are also able to vary their income tax instalments to nil without penalties. This also applies if taxpayers end up in a tax payable situation for that quarter once they have lodged their tax return.

For taxpayers with a tax debt or outstanding obligation, the ATO will not initiate debt recovery action until at least 28 May 2020. Taxpayers can also request payment arrangements for outstanding debts. The ATO will also consider releasing individuals and businesses from income tax and FBT debts if they are experiencing serious hardship. However, employers still need to meet their ongoing super guarantee (SG) obligations for their employees.

A complete list of the impacted areas is available on the ATO website at www.ato.gov.au/individuals/dealing-with-disasters. Those affected by the 2019–2020 bushfires with a postcode not currently in the identified list can contact the ATO Emergency Support Infoline for tailored help; phone: 1800 806 218.

The ATO will recognise the ongoing effects of this disaster, such as cash flow problems for business owners who have suffered reduced trade. This includes businesses that are not located in the identified regions. The ATO also recognises that there may be situations where additional support or extensions may be required on a case-by-case basis beyond the automatic deferrals announced.

If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 14 Russell Street Toowoomba.