The Tax Office will now apply automatic lodgement and payment deferrals for company 2018–19 income tax returns to a new due date of 5 June 2020.
Further, SMSF 2018–19 annual returns will now be due on 30 June 2020.
2019–20 fringe benefits tax (FBT) annual returns have also been automatically deferred to 25 June 2020.
2018–19 income tax returns for individuals, partnerships and trusts can be lodged by the 5 June concessional due date, provided clients pay any liability by this date.
The change of heart by the ATO comes after Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Public Accountants, the Tax Institute and the Corporate Tax Association wrote a joint letter to the Commissioner of Taxation, calling for deferrals and penalty waivers in light of the evolving COVID-19 situation.
It is understood that Assistant Treasurer Michael Sukkar was also contacted for assistance on the issue.
“We’ve taken this issue through all the various forums and it took the might of the National Tax Liaison Group and the joint accounting bodies to get this over the line,” the IPA’s Tony Greco told Accountants Daily.
“They’ve recognised that the accounting profession is going to do the heavy lifting in relation to a lot of the stimulus measures.
“It is recognition that we are the messengers, we are the ones that have to navigate their clients through the measures and help them receive the government stimulus.”
The ATO has also taken on board the joint accounting bodies’ request to provide assurance to the tax profession on the 85 per cent lodgement benchmark.
“You will not be adversely affected if you do not meet the 85 per cent lodgement program performance benchmark, and we will be working pragmatically and flexibly to ensure that we provide the right support for impacted tax professionals,” the ATO said.
CA ANZ tax leader Michael Croker said the ATO’s announcement would be warmly welcomed by tax professionals who were on the frontline dealing with the coronavirus-induced economic downturn.
“It’s hard to recall a time when accountants have been busier. Cash-in-the-door stimulus measures are obviously important, but more so is advice on how to survive the COVID-19 crisis,” Mr Croker said.
“Many of our members have been helping with negotiations with lenders and landlords, identifying cost savings, shoring up whatever income streams remain available and identifying new business models for a post-COVID-19 economy.”
The ATO had previously refrained from offering blanket deferrals because it was looking to take tax return data to inform government policy.
“CA ANZ recognises the enormous pressures on the ATO at the moment. The ATO isn’t just a tax collector; it’s the eyes and ears of government and data contained in tax returns is vital to good policy decision-making and administration,” Mr Croker said.
“More than ever, Australia needs a well-functioning tax system and ATO tolerance for non-lodgement and non-payment can only extend so far.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.