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Re: Why is the government discriminating against small businesses for JobKeeper and Cash Flow Boost?

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Enthusiast

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As outlined at this link here, the ATO is rejecting claims for JobKeeper and Cash Flow Boost based on whether a business lodges their Business Activity Statements monthly, quarterly or annually.

 

It is smaller businesses who most often lodge quarterly or annually. Seeing Smaller businesses hit hardest by this rule.

 

Why is the government discriminating against small businesses on JobKeeper and Cash Flow Boost?

 

More information can be found at: https://www.change.org/jobkeeper-cash-flow-boost

 

https://www.change.org/p/josh-frydenberg-fair-go-fix-jobkeeper-and-cashflow-boost-end-red-tape-discr...

 

https://www.cpaaustralia.com.au/-/media/corporate/allfiles/document/media/submissions/cross-policy/c...

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Most helpful response

Community Manager

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Hi @Community,

 

The ATO only administer the law any other issues you can discuss with you local federal member.

 

 

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Most helpful response

Community Manager

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Hi @Community,

 

The ATO only administer the law any other issues you can discuss with you local federal member.

 

 

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Devotee Registered Tax Practitioner

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@Community @KylieATO 

 

Community,

 

Have a read of QC 61925 and QC 62755.

 

These Fact Sheets seem to contradict an email of rejection/denial of Cash Flow Boost sent to one of my clients in late May.

 

Kylie,   Please comment.

 

Duncan

 

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Enthusiast

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Could you give more background on describing the contradiction you've identified please @DuncanS ?

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Enthusiast

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For those wondering, the original post started with "As outlined at this link here..." and was edited by the ATO admin.

 

The link leads to a Change.org page that joins with the calls from CPA Australia, Chartered Accountants ANZ and other Tax and Small Business groups to end this discrimination and provide fair and equal support regardless of when a business's BAS reporting period.

 

You can find it here: https://www.change.org/jobkeeper-cash-flow-boost

 

Or just search 'change.org jobkeeper-cash-flow-boost' in your prefered search engine.

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Devotee Registered Tax Practitioner

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@Community @KylieATO 

 

I do not wish to enter a political discussion about which businesses should/should not get the Cash Boost.

 

My recollection is that Mathias Cormann stated the various Government Packages had been very generous - I tend to agree. 

 

My issue is the inconsistencies shown by the ATO.

The Covid world is moving fast and it is difficult for all to be fully informed.

 

Kylie,

 

Please confirm the wording in QC 61925  New to business.

This Fact Sheet is inconsistent to the email to my client end May 2020.

Please clarify if an entity making sales in January and/or February 2020 and lodging a January - March 2020 BAS in April 2020 is entitled to the Cash Flow Boost. The April - June 2020 BAS has been lodged.

I told the Director that the Cash Flow Boost would not apply based on ATO information available in April 2020.

 

The information provided to the Director in April 2020 is not consistent with QC 61925 published by the ATO on 20 July 2020. Please clarify.

 

On a separate manner, I have several clients where we are unable to work out the monetary amount of the Cash Flow Boost.

I spent some 12 years as a Industry Practitioner for Finsia/Kaplan teaching Analysing Financial Statements and Mortgage Lending - would like to think my analytical skills are of a high standard.

Is there any issues within the ATO of Cash Flow Boosts being incorrectly paid from a monetary amount viewpoint?

 

You will recall that I posted on the ATO Community that I thought PAYG - W and the Cash Flow Boost should have been calculated over 9 months up to 31 March 2020.

It is not unusual for a Tax Accountant to pay a Director a higher Salary in the second half of a FY.

Those businesses that paid a Salary consistently to a Director over a FY would receive less Cash Flow Boost than those who paid a higher Salary in the second half of the FY.

 

I do understand that the Cash Flow Boost was developed quickly but it does appear that the design is not reflective of small business accounting/tax practices.

The second round of Cash Flow Boost started in July 2020 with lodgement of the April - June 2020 BAS but the policy issues that I addressed in April 2020 still exist.

 

My concern is the potential/actual overpayment of Cash Flow Boosts and the many decades that will be required to repay the Government Debt.

 

Duncan

 

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Enthusiast

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Hi @DuncanS ,

 

You may find this thread of interest:

https://community.ato.gov.au/t5/Activity-statements/JobKeeper-and-Cash-Flow-Boost-Why-is-the-ATO-rej...

 

The ATO rep there seems to suggest the scenario you describe is no longer rejected...