COVID-19 Government Economic Responses: Small Business, JobKeeper, Youth Allowance

maberbs Leave a comment

Hi Everyone,

This is a very uncertain time for us all. COVID-19 has changed the way most of us run not only our lives but also our businesses. Legislation is changing rapidly and the information available, particularly via the broad media outlets, can often be confusing and hard to verify. As your accountant, I receive regular tax updates from several sources most, if not all, of which are front line advisers to the Government.

I will endeavour to pass on any relevant updates to my business and individual clients as and when they become available in an effort to hopefully ease some of the confusion and inevitable contradictory reports in this difficult time.

Small Business Stimulus Package

Whilst your Q3 BAS 2019-2020 is not due for lodgement until 28 May, 2020,  given the current COVID-19 situation, it is in your best interest to get on to this ASAP.

For those of you with employees, you must lodge your Q3 BAS return and report salaries/wages via STP to receive your initial Coronavirus Small Business Stimulus package payment.

I have found a very informative link https://www.smallbusiness.wa.gov.au/blog/coronavirus-stimulus-package-small-business  which outlines the various stimulus measures for small businesses.

For those of you without employees, you still must lodge your Q3 BAS return to determine your eligibility for the JobKeeper payment. Whilst the above link covers this, a more targeted fact sheet can be found here https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_supporting_businesses.pdf – in particular, please refer to the last page which shows examples for self-employed individuals and others.

Please send me your details/spreadsheets/bank statements or ensure your transactions are reconciled in your cloud accounting packages.

JobKeeper Payment

As you know, late last night on 8 April 2020, Parliament passed the JobKeeper package in response to the economic consequences of the outbreak of the COVID-19 virus.  Whilst the bill was passed by both Houses of Parliament, unfortunately it did not contain the finer details of how the JobKeeper payment scheme will operate. It is anticipated that the ATO will make this information available once Treasury has released the rules. We believe this information is imminent and as soon as it is available, we will be working quickly to provide this to you.

Currently, the most informative fact sheet that has been made available can be found here: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_supporting_businesses_0.pdf -in particular, please refer to the last page which shows examples for self-employed individuals and others. Whilst this is a Treasury document, it would be prudent to wait until they provide a formal updated fact sheet.

Another informative link can be found here:  https://www.smallbusiness.wa.gov.au/blog/coronavirus-stimulus-package-small-business  which outlines the various stimulus measures for small businesses.

Overall, the key to your eligibility for the JobKeeper package appears to rely heavily on your business accounts being as up to date as possible as it seems you will be required to continually report your current (reduced) turnover in comparison to the corresponding period a year earlier. Your eligibility as a non-BAS lodging entity will be reassessed on a regular basis which can be as short as monthly.

Action to take now

Initially, if you haven’t already done so, I strongly suggest that you all visit the ATO website https://www.ato.gov.au/general/gen/JobKeeper-payment/ to register your interest in JobKeeper payments – you will need your ABN for this process.

It still remains difficult to get definitive answers in relation to the above at the current time so please note, this information is to the best of my knowledge at the time of sending.

Whilst the current restrictions mean that we are no longer able to meet with clients face to face, we are always more than happy to respond to your questions via email or telephone.

Kind regards,

Wayne

COVID-19 – Government Economic Responses – March 2020 – Update

maberbs Leave a comment

Dear valued clients,

As you know, on 23 March, 2020, Parliament passed two packages worth $17.6 billion and $66 billion in response to the economic consequences outbreak of the COVID-19 virus.

Fact Sheets and Package Details

A Fact Sheet outlining the First “Coronavirus Economic Rescue Package” can be found here – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_households.pdf

Details of Treasury’s Second “Coronavirus Economic Response Package” can be found here – https://treasury.gov.au/coronavirus

A link to the Australian Government’s Business website can be found here – https://www.business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business

Sole Traders, Self-employed, Permanent, Casual, Contractors.

The key distinguishing feature is for those who employ staff/workers.  For my many clients who are sole traders and do not employ staff/workers, the Government has established a new $550 fortnightly coronavirus supplement payment.  Sole Traders, the self-employed, permanent employees who are stood down or lose their employment, casual workers and contract workers will be able to access the above coronavirus supplement payment under expanded access to the Job Seeker allowance via MyGov.  Payments are set to commence from 27 April, 2020.

As an aside, the Government made a last-minute decision to include students on youth allowance, Austudy and Abstudy in the package thus allowing them to get their welfare payments boosted by $550 a fortnight along with those receiving Jobseeker, youth allowance, parenting and special benefit payment.

Small Businesses

For my Business clients who employ staff/workers, the stimulus payments will be made upon you lodging your upcoming BASs.  Those eligible businesses will receive a minimum payment of $10,000 (max $50,000) when they lodge their BAS for Q3 (Jan-Mar 2020) plus $5,000 (max $25,000) when they lodge their BAS for Q4 (Apr-Jun 2020) and a further $5,000 (max $25,000) when they lodge their BAS for Q1 2020-2021 – (Jul-Sep 2020).

An article by Peter Switzer best describes this with an example and this can be found here – https://switzer.com.au/the-experts/peter-switzer/scomo-and-josh-take-on-covid-19/?utm_source=newsletter&utm_medium=email&utm_campaign=20200323

Access to Superannuation

Employees who have either been made redundant or incurred reduced working hours of 20% or more, plus Sole Traders whose business have been suspended or incurred a reduction in turnover of 20% or more, will be able to apply online through MyGov to access up to $10,000 of their Super before 1 July, 2020 and up to a further $10,000 after 1 July, 2020 but only up to 30 September, 2020.

Conclusion

If you have any questions, please get in touch, ideally during business hours, to discuss. The office is ostensibly closed to face-to-face meetings as all communication during the COVID-19 period is either via telephone 1300-141796 or via email.

It is difficult to get definitive answers in relation to the above at the current time so please note, this information is to the best of my knowledge at the time of sending.

Kind regards,

Wayne Maber

COVID-19: Changes to meeting policies

maberbs Leave a comment

Hi valued business clients and BAS lodgers,

CPA Australia have yesterday cancelled all events/meetings until June, 2020 due to the current health crisis.

In light of this, we here at the office are adopting a similar precautionary measure.

Tax returns and other services

We will be conducting all taxation meetings and interactions over email and/or telephone.

If you need us to prepare your return, please respond/get in touch and we will pre-prepare your return(s) over the next week or so and be back in touch with any questions and/or remarks.

BAS

We will be conducting all BAS preparation meetings and interactions over email and/or telephone plus through cloud software for those using such programs.

Most of you have already lodged your Q2 BAS returns however for those who have not, if you still need us to prepare your BAS return, please respond/get in touch ASAP.

Going forward, we will be back in touch shortly in relation to your Q3 BAS at which time we will advise any updates.

 

Apologies for any inconvenience and we hope you understand our reasoning.

Kind regards,

Wayne

Tax Time 2017: things to think about

maberbs Leave a comment
It’s that time of the year again – with less than a month until the end of the financial year, this is an opportune time for some last minute tax savings/action!
The Turnbull Government’s recent Budget announced very few changes from a taxation perspective. The changes already enacted into law that will apply to the 2016-2017 tax year are as follows.

Accelerated depreciation for small businesses – extended to 30 June, 2018

  • On and from 12 May 2015, there is an instant asset write-off threshold of up to $20,000 for individual assets acquired and installed ready for use.
  • Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30PM on 12 May 2015 and 30 June 2018. This deduction can be used for each asset that costs less than $20,000, whether new or second-hand. You can claim the deduction through your tax return, in the year the asset was first used or installed ready for use.

Work related car expense calculation

  • The cents per kilometre method remains unchanged at 66 cents per kilometre which applies to all vehicles.

Rental property owners

  • From 1 July 2017, the Government announced that all travel deductions relating to inspecting, maintaining, or collecting rent for a rental property will be disallowed.
  • The Government announced that from 1 July 2017, plant and equipment depreciation deductions will be limited to outlays actually incurred by real estate property investors. For investors who purchase plant and equipment for their residential property investment after 9 May 2017 will be able to claim a deduction over the effective life of the asset. Property owners will be unable to claim deductions for plant and equipment purchased by a previous owner of the property.

Increase to the low-income thresholds for the Medicare Levy

  • The Government announced that the Medicare levy low-income thresholds for singles, families, seniors and pensioners will increase from the 2016-17 income year. The threshold increases mean that households will not pay the Medicare levy if their taxable income is below a statutory low-income threshold.
    • The singles threshold will increase to $21,655.
    • The family threshold will increase to $36,541 plus $3,356 for each dependent child or student.
    • The single seniors and pensioners threshold will increase to $34,244.
    • The family threshold for seniors and pensioners will increase to $47,670 plus $3,356 for each dependent child or student.
There still remains an increased responsibility placed on me as your Tax Agent in certain reporting areas regarding your spouse and your family situation.
I must complete and cross reference Income details of your Spouse including certain Superannuation details, Pension information, Rental Property, Child Support and Foreign Income information. Whilst this information is automatically cross referenced into each return if I am the Agent for both parties, if your Spouse does not complete their tax return through me, you will need to bring these details in with you when we meet to complete your tax return.
The ATO is seeking this information to calculate your entitlement to certain offsets or government concessions and will use this information to work out whether you need to pay tax or the Medicare levy surcharge.

Private Health Funds – Tax Rebate based on income level:

Your entitlement to the rebate will depend on your level of income. This income threshold has again increased marginally.
You will receive a statement from your private health insurer, which is required to complete your tax return. Please bring this statement with you when you meet with me to prepare your tax return.

Medicare Levy Surcharge – If you DON’T have qualifying Hospital Cover:

The Medicare levy surcharge remains unchanged.
  • 1% Medicare Levy Surcharge applies from $90,001/$180,001.
  • 1.25%  from $105,001/$210,001; and
  • 1.5% above $140,000/$280,000.

Net Medical Expense – Tax Offset

  • This offset is now only available for taxpayers with out-of-pocket medical expenses relating to disability aids, attendant care or aged care expenses until 1 July 2019.

 

Other matters to consider are as follows:

Business Clients:

  • Give some thought to purchasing Business supplies, stationery items, an extra Ink cartridge etc., before 30 June.
  • The “simpler” depreciation rules surrounding small business assets and new motor vehicles still apply.
  • Small gifts for clients and/or key business contacts can be claimed.  Keep each under $100.
  • Also – please forward your BAS spreadsheets ASAP after 21 July.

Home Office, Internet and Mobile Phone:

  • You can claim an allowance for using your Home Office for work related purposes.  Please note the number of hours spent doing ‘work from/at home’ in your home office in your diary over a 4 week period.  I will compile your claim when I do your return.
  • Do you use your Mobile Phone for work related matters?  Please locate your bills and/or pre-paid dockets and assess your work related usage.
  • You can claim a portion of your home internet usage that relates to your work and your ‘work-from-home’ situation as per your home office usage.
  • Many “work related” stationery items used in your home office can be allowable – perhaps a quick trip to your local Newsagent or Stationery Shop??

Bank Interest:

  • Please locate ALL Interest received on ALL Bank Accounts – the ATO now receives this information from all Financial Institutions.  Whilst I can obtain copies also, it is best to keep all your Bank Statements and/or it may be possible to obtain these interest amounts via your Internet Banking.

Donations:

  • Give some thought to perhaps making that long overdue donation before 30 June.  Donations made before 30 June can be claimed this year and as these generally result in a tax refund to you, this can be “returned” to you in your Tax refund shortly after lodging your return, otherwise you will have to wait another 12 months or more for the refund.

Dry Cleaning:

  • Perhaps that last minute dry cleaning of your work uniform/protective clothing.  Please ensure the Dry Cleaner notes the receipt as “Work Clothes”.

Motor Vehicle and Travel:

  • Work related motor vehicle expenses – please note the destination and odometer readings in your Diary or your log-book. You can also calculate the distances travelled using Google Maps or Whereis.
  • Work related travel – train/bus fares, tolls, accommodation and some meals can be claimed – please note in your diary and keep your receipt(s).

Other Expenses:

  • If you are not sure, please ask but nevertheless, KEEP ALL YOUR RECEIPTS!!!
In the past, the ATO has been slow at updating individuals’ tax reports. As such, I suggest you make appointments to complete your 2017 tax returns on and from say, 25 July, 2017. Please feel free to contact Bronwen or myself during normal business hours and I look forward to seeing you all shortly.