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The JobKeeper package is excellent but we, as a small childcare business, are really concerned we will miss out on this entirely (despite having more than 61% drop in revenue) due to possibility that 'business revenue' loss will be defined by the ATO as 'aggregated turnover' loss .
We are desperately awaiting interpretation under this JobKeeker package as to whether revenue is calculated on ‘an employer by employer’ or ‘business by business’ basis or alternatively if revenue is to be interpreted as ‘aggregated turnover’ and grouped with other businesses?
Due to historical structural grouping we have not yet, as a small childcare business, been eligible for any of the payroll or other small business relief via State or Federal Government Initiatives.
So ordinarily, by all understandings, we would more than qualify for the JobKeeper Subsidy as an eligible employer, but unfortunately due to the potential grouping (applying grouping rules which were understandably designed by ATO for other unrelated purposes eg taxation) we are in the awful position of facing ‘grouped’ aggregated turnover for this Job Keeper subsidy: meaning we would be ineligible (and forced close our doors) until a related company in a completely different industry, (a landscaping business whose contracting clients and business nature means that revenue losses will likely be deferred until 4-6 months time) qualifies for Jobkeeper. Our childcare business is a separate Pty Ltd and a separate employer and is run entirely separately to the related party landscaping business: It would be a great pity if our staff, centre and families (clients) were so heavily penalised due to application of any grouping/aggregated turnover rules to this program.
We understand the purpose of JobKeeper is directly intended to assist our type of business, and to keep employees, exactly like our amazing and loyal staff in the childcare industry, in their jobs during these trying times (where we have lost over 60% revenue) so we can continue to keep our doors open and continue to care for children and families in need. We sincerely wish to do that but, unfortunately, we will not be able to keep our staff in this small childcare business if we are forced to be joined with other industries (in less rapid decline and completely different circumstances) to evidence the 30% revenue decline.
We have sought your formal discretion as Commissioner of Taxation urgently today (as Scott Morrison has suggested in his speech) but we are honestly managing staff resourcing day to day and to have this confirmation that businesses (or we) will not be grouped for the purposes of calculating business revenue losses will allow us to resource and plan appropriately.
Todays announcement that childcare will be free from Monday onwards, exasperates our current situation, as we will need to increase our staffing (whilst only getting 50% of fees) which is impossible without the knowledge that we are eligible for JobKeeper.
@klc11klc this is a stressful time for a lot of businesses like yours. While the Prime Minister has announced the JobKeeper payment, it hasn’t been through parliament so we can’t answer your question with certainty. Once it becomes law, we’ll be ready to answer your questions and support businesses in accessing support measures like the JobKeeper payment. We know this doesn't alleviate your anxiety or help with decisions you are currently facing in your business, but we are working to get certainty on these issues.
NEW TO THIS: I posted this question and have not had any feedback. Please can you help? Many thanks.
I am one of the ones that misses out on any support from the government and I am not a high-income earner. I have lost more than 30% of my monthly income in April. The mortgage relief package only defers payment and so is really does not help me. My question - can I take out $10,000 from my super in the current tax year and not pay tax on that withdrawal, but still deposit money into my super before June 30th 2020. This would save me a few thousand dollars. Is this possible? I do not want to do something that is wrong. Any help would be gratefully received.
From mid-April, eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 until 24 September 2020.
Right now if you look at the criteria it seems like you can do this to me. However, you can't claim your super until mid April. I would be expecting more clarity and perhaps the government might tighten up the rules before then to stop things like this. Who knows, things are changing so rapidly. I would double check the criteria before you do this. There are so many details the government is working through right now, they are trying to keep up.
@Pall2020 I’m sorry to hear that you are being financially affected by COVID-19 and that you feel there is no support available to you. As you know, the temporary early release of superannuation measure is for people who are unemployed, people receiving certain support payments and people whose income has been affected by COVID-19. It’s important to remember that this measure has been introduced to relieve financial pressure by letting these people access some of their super from mid-April, rather than waiting until retirement. If you’re in a position to access some of your super and re-contribute these amounts immediately, you may not be eligible for the scheme.
Our Second Commissioner, Jeremy Hirschhorn has also posted about this topic on his LinkedIn:
We are aware of super recontribution schemes relating to COVID-19... we ask that individuals, tax agents and businesses be mindful that it is not acceptable to apply for relief payments or benefits where eligibility may be questionable. Applications for relief through stimulus measures based on artificial arrangements will see the ATO take swift action...
I believe people should be made aware that any Super withdrawal under COVID-19 legislation is unfortunately not tax free as stated by the Prime Minister and many other sources.
I have a managed Super fund with MLC and they have told me today I will still be liable for Capital Gains Tax even though the personal tax element will be waived. Any Super withdrawal amount will be taxed and a persons Super balance will be less by the amount withdrawn and the Capital Gains Tax.
I have been told by MLC today that the Capital Gains Tax is either hidden in the sold units "unit price" or as a direct CGT transaction deduction. This happened to me last month when I consolidated my Super into one account (using ATO system) and a substantial CGT deduction appeared on my old IOOF account. The roll-over amount into my MLC account was less than my actual IOOF balance.
You're right @AB1959
Depending on how the money in your super account has been invested (e.g. shares) when you withdraw money from your fund they generraly need to sell some assets. This causes a CGT event and is taxed.
The super system works this way and I don't think the ATO is intentionally trying to hide this from anyone this is just how super works. While the amount you receive as a result of the COVID measures is tax free it doesnt change how the fund works (i.e sells assets to give you the money).
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