As you are aware the government has come out with a range of Stimulus packages as a result of the Covid-19 Pandemic.
If you are a business who has had yourself and staff on wages for some time – no problems, it’s business as usual and you will get your fair share of the stimulus.
If you are a business who has not paid yourself wages prior to this quarter then there are serious issues you need to consider as there are extensive integrity measures around these packages. The important information:
- You cannot backdate a PAYG Registration to add yourself as a staff member
- If you had PAYG Registration but were not paying a regular wage to yourself, you cannot add it now
- If you want to put yourself on wages now to get the $1500 Job-Keeper allowance, you will have had to be registered by 1 March and backdating anything creates issues with no 1 & 2 above
The key tests the ATO will use to decide if any business owner (or their accountant) have done in their mind “the wrong thing” and moved to wages are very straight forward.
- Before 12 March 2020: Was the business registered for PAYGW?
- Was the business actually paying wages? (Was there a regular amount paid each pay period to the employees in question?)
- Has the business just started paying wages to certain employees in this March 2020 BAS quarter when in prior periods it didn’t?
The RED FLAG hit list for the ATO are all PAYGW registrations applied for from 12 March 2020 onwards. Yes, there will be cases where businesses have just started and the Legislation needs to be amended to cater to these.
So the bottom line is:
If you had wages in your BAS prior to this one, you are totally safe moving forward, regardless if you had arm-length employees or closely-held (family) employees.
Do not try to add yourself to the wage system if you were not in there prior to 1 January 2020
Do not change your wage to over-inflate the PAYG or there are penalties
If you have closely held employees and were not registered for Single Touch Payroll, now is the time to set it up.
As mentioned above, there are strict integrity measures around these stimulus packages. Accountants may be viewed as “Promoters” of schemes to increase a client’s amount of Cash Flow Boost, and the TPB will look to come down heavily on them and potentially cancel their license.
We are not prepared to lose our license over this so please don’t ask us to do anything that doesn’t meet these criteria.
Naturally, we are here to help so if you do have queries or need help setting up your STP, please get in touch.
Here’s the link to my video that goes with this if anyone wants the short version