COSBOA is concerned that some small businesses that legally report their tax quarterly or annually haven’t been able to receive the Cash Flow Boost or the JobKeeper Payment. We have been aware of this situation for quite some time and had hoped it was an oversight caused by the rapid design and implementation of the coronavirus assistance measures. We were under the impression that the rule would be overlooked on a case-by-case basis according to compassion and common sense. Unfortunately, that hasn’t happened.
To be eligible, a business must have lodged its BAS by 12 March 2020. However, a business formed, operating, and choosing to report less frequently than monthly may not have filed its first BAS before 12 March. This can happen where:
• A business was formed on or after 1 July 2019 and chose to lodge its BAS annually
• A business was formed on or after 1 January 2020 and chose to lodge its BAS quarterly
• An existing business was restructured (e.g from a sole trader to a company) on 1 July 2019 and chose to lodge annually, or on or after 1 January 2020 and chose to lodge quarterly.
All of these businesses would have been denied the Cash Flow Boost and JobKeeper. Yet if those same businesses had chosen to lodge BAS monthly, they would be eligible. And, given that it is smaller businesses who tend to choose the longer reporting periods to reduce the red tape they have to deal with, it is small businesses who are hit hardest by this rule.
COSBOA’s members have heard from a number of distressed business owners complaining about the unfairness of this rule. They are ineligible through no fault of their own.
We understood that with the rapid rollout of the legislation there would be some quirks and flaws. This particular issue was flagged with the Government back in May and changes were requested. So far, we have had several reiterations of the JobKeeper program but nothing addressing some of the more unfair applications of its rules.
Many accounting bodies and small business associations also called for the situation to be remedied. These include Certified Practicing Accountants (CPA) Australia, Chartered Accountants (CA) Australia and New Zealand, the Institute of Public Accountants, The Tax Institute, the Institute of Certified Bookkeepers, Tax and Super Australia, the Australian Bookkeepers Association, the National Tax and Accountants’ Association, The Association of Accounting Technicians, and the Australian Small Business and Family Enterprise Ombudsman.
Smaller businesses that report less frequently have now called on the Government to change the 12 March eligibility rule and a petition is now being circulated to press for changes.
Right now, we need viable small businesses to stay open, keep employing people, and receive the support the Government has provided. They do not want to be fighting the ATO over the unfair application of rules, and the ATO has got more important work to do too. If the Government can make the rules, it can also change them to help business people and let the ATO roll out what is a great initiative for everyone.