Tax scam warning

The ATO has warned taxpayers and businesses to be extra vigilant to guard against scammers throughout the COVID-19 pandemic, pointing out that scammers often work to steal your money and identity while you’re most vulnerable.

“Life’s busier than ever for small business owners. Scammers hope you’re too busy to check what they’re saying so you’ll hand over your personal or financial information,” a statement from the ATO read.

They have provided the following tips to help businesses and consumers stay safe during these times. The following tactics are often used by scammers to take advantage of people both online and over the phone:

  • Ask you to pay a fee in order to receive a refund
  • Request payment via iTunes, Google Play cards, cryptocurrency, offshore wire transfer or cardless cash transfer
  • Send an email or SMS with a hyperlink to government online services
  • Request personal identifying information via return email unless you’ve agreed to engage in this way

Remember, the ATO will never threaten you with arrest or insist you stay on the line until you make payment.

If you’re ever unsure about an ATO communication, do not reply. Phone the ATO scam hotline on 1800 008 540, visit ato.gov.au/scams or speak to us.

Changes to bankruptcy law

Sole traders and businesses operating as a partnership are being offered temporary protection during the COVID-19 pandemic.

To reduce the financial stress, the Australian Government has temporarily changed bankruptcy laws to protect people who are facing unmanageable debts to help them stay afloat in this difficult period, rather than face insolvency or mandatory closure.

This means that you can apply for temporary debt protection for up to six months, preventing recovery action by unsecured creditors.

Over the six month period, the ATO suggests people in financial trouble use the time to seek free advice from a financial counsellor, negotiate plans with creditors and consider and seek advice about insolvency.

Also, the minimum amount of debt that can trigger bankruptcy has changed from $5,000 to $20,000 and you now have up to six months to respond to a bankruptcy notice, instead of 21 days.

For more help, advice can be obtained from the National Debt Helpline by calling 1800 007 007.

STP exemption period extended for closely held payees

The ATO has moved the exemption cut-off date for Single-Touch Payroll (STP) reporting back a full year to 1 July 2021 in light of the COVID crisis. This applies to businesses with less than 20 employees.

The ATO defines closely held payees as those directly related to the entity from which they receive payments, including

  • family members
  • directors or shareholders of a company
  • beneficiaries of a trust.

You will still need to report through STP for other (arm’s length) employees.

The only exemption is if they are eligible for a micro employer reporting concession. This allows their registered tax or BAS agent to report on their behalf on a quarterly basis until 30 June 2021.

You can report closely held payees sooner if you prefer, especially if you’re already using STP reporting.

Reporting through STP may also support your JobKeeper payment application and help you meet your monthly reporting requirements. STP reporting enables employers to notify employees of:

  • eligibility
  • start and finish periods
  • amounts the employee has been paid (including any JobKeeper top-up).

Read more about STP reporting for closely held payees on the ATO website.