A paperwork nightmare: Are performers and sole traders missing out on JobKeeper because of poor admin skills?

By Ann Kayis-Kumar, UNSW; Fiona Anne Martin, UNSW; Jack Noone, UNSW; and Michael Walpole, UNSW

Performers and others in the arts industry are finding it almost impossible to access JobKeeper, despite being among the most needy.

The arts industry has been hit harder than any other sector apart from tourism, according to the Australian Bureau of Statistics.

Many are performers and other sole traders who are employed for their services on an engagement-by-engagement basis.

Sole traders are meant to have access to the $1500 per fortnight payment if their turnover has fallen or is likely to fall by 30% or more, assuming their turnover is less than $1 billion.

The fact many haven’t got it may be in part because they are behind in their paperwork.

Behind on paperwork

Sole traders seeking help from the University of NSW Tax Clinic, because they are not up-to-date with their quarterly Business Activity Statements, are on average seven years behind.

The clinic has seen some sole traders who are up to 20 years behind (that is, up to 80 statements behind).

If a business is cash-strapped and the owner is struggling financially and psychologically, a visit to a tax accountant tends not to be a high priority. Especially if the business does not have the cash to pay the agent.

In practice, clinic supervisors at the UNSW Tax Clinic are seeing many financially vulnerable sole traders opt instead for the lower-paying JobSeeker.

It means many of the most financially vulnerable small businesses are slipping through the cracks because they can’t afford an accountant.

Being behind on tax returns can also prevent access to other Centrelink benefits including child support.

Most vulnerable missing out

It puts people who were already in financial hardship at a further disadvantage — one that is set to grow.

By the end of the year, deferred mortgages, loans and rent payments will recommence. This will happen at the same time as JobKeeper and the JobSeeker Coronavirus Supplement payments run out (both of which can incur tax).

Many financially vulnerable people will have used up their superannuation savings to pay off debts, such as credit card bills, when they could have been eligible for hardship variations or waivers on those debts.

It builds a powerful case for providing good quality independent tax advice to those who are most likely to need it and can least afford it.

Free advice is the best solution

To its credit, the Commonwealth government funds a relatively new National Tax Clinic Program launched in 2019 following the successful prototype set up by Curtin University in 2018.

Operating out of 10 universities, students undertaking tax-related courses assist qualified professionals in providing tax advice.

These clinics help address the tax advice gap between free tax help offered by the
Australian Tax Office, and independent advice normally only available for a fee — a gap that is likely to grow in the downturn ahead.

One of the hopes for the program is that it will act as a bellwether for issues affecting often-marginalised and silent Australians, bringing their problems into the open and fuelling research.

Many also need financial counselling, and so the program has partnered with Financial Counselling Australia and the state financial counselling associations in Victoria, NSW, Queensland, South Australia, the Northern Territory and Western Australia.

This article was first published by The Conversation.

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