Robert Goodman Accountants Blog

JobKeeper Update 7 August 2020


 

JobKeeper 2.0 Updated 7 August 2020 

From 28 September 2020, the second tranche of the JobKeeper scheme changes the eligibility tests for employers and employees, and the method and amount paid to eligible employees.

Eligibility

To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

 

Eligible employers

The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.

 

·         On 1 March 2020, carried on a business in Australia or was a non-profit body pursuing its objectives principally in Australia; and

o    before the end of the JobKeeper fortnight, it met the decline in turnover test*:

§  >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)

§  > 50% for large businesses:

·         aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).

§  ­>30% for all other qualifying entities.

o    And, was not:

§  on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or

§  a government body of a particular kind, or a wholly-owned entity of such a body; or

§  at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual's property.

 

1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

 

*Additional tests apply from 28 September 2020.

 

Additional decline in turnover tests

To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover

 

 

30 March to 27 September 2020

28 September to 3 January 2021

4 January 2021 to 28 March 2021

Decline in turnover

Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

Actual GST turnover in the September 2020 quarter (July, August & September) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.

The decline for the quarter needs to be met to continue receiving JobKeeper payments.

Actual GST turnover in the December 2020 quarter (October, November & December) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019. The decline for the quarter needs to be met to continue receiving JobKeeper payments.

 

* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.

 

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

 

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).

 

Alternative tests

The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019. These alternative tests have not as yet been released.

 

Eligible employees

The Government has announced that employee eligibility tests will change from 3 August 2020 onwards.

 

Under the current version of the JobKeeper scheme an employee must generally have been employed by the relevant entity on 1 March 2020 to be eligible for JobKeeper payments. Someone employed as a casual on that date also must have been employed on a regular and systematic basis for the 12 month period leading up to 1 March 2020.

 

However, these proposed changes mean that employees who were previously ineligible for JobKeeper because they were not employed by the entity on 1 March 2020 may now be able to receive JobKeeper payments if they were employed by the entity on 1 July 2020 and can fulfil all of the other eligibility requirements.

 

·         On 1 July 2020 (previously 1 March 2020):

·         Was aged 16 years and over; and

·         If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;

·         Was an employee other than a casual, or was a long-term casual*; and

·         Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.

·         And, at any point during the JobKeeper fortnight:

·         Was an employee of the employer (including employees that have been stood down or rehired); and

·         Was not an excluded employee:

§  An employee receiving parental leave pay or dad and partner pay; or

§  An employee receiving workers compensation payments in relation to total incapacity.

·         And, has provided the JobKeeper Payment Employee Nomination to the employer:

·         Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and

·         Confirming that they have not agreed to be nominated by another employer; and

·         If they are a long-term casual, they do not have permanent employment with another employer.

 

*A 'long term casual employee' is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on the applicable testing date (previously 1 March 2020, but changing to 1 July 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

 

JobKeeper payments

From 28 September 2020 the payment rates for JobKeeper will reduce and split into a higher and lower rate.

 

Whether an eligible employee can access the higher or lower rate will depend on the number of hours they worked during a 4 week test period. The Government indicates that the higher rate will apply to employees who worked at least 20 hours a week on average in the four weeks of pay periods prior to either 1 March 2020 or 1 July 2020.

 

JobKeeper

30 March to 27 September 2020

28 September to 3 January 2021

4 January 2021 to 28 March 2021

Payment

· $1,500 per fortnight per employee

· $1,200 per fortnight per employee or business participant who worked > 20 hours per week

· $750 per fortnight per employee or business participant working < 20 hours per week

 

· $1,000 per fortnight per employee or business participant who worked > 20 hours per week

· $650 per fortnight per employee or business participant working < 20 hours per week

 

Assessing if an employee has worked 20 hours or more

JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020 and the four weeks of pay periods before 1 July 2020.

 

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee's or business participant's hours were not usual during February or June 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly. This guidance is not as yet available.

Can I keep getting JobKeeper until September?

If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020. 

 

ATO Assistant Commissioner Andrew Watson said in a recent interview, "Once you're in, you're in to the end of September. If you meet the eligibility test once, you're in it for the whole time." The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight.

JobKeeper fortnights

 

 

JobKeeper fortnight

 

 

Payment rate

1

30 March 2020 – 12 April 2020

JobKeeper 1.0

Eligibility period 1

$1,500 per fortnight

2

13 April 2020 – 26 April 2020

3

27 April 2020 – 10 May 2020

4

11 May 2020 – 24 May 2020

5

25 May 2020 – 7 June 2020

6

8 June 2020 – 21 June 2020

7

22 June 2020 – 5 July 2020

8

6 July 2020 – 19 July 2020

9

20 July 2020 – 2 August 2020

10

3 August 2020 – 16 August 2020

11

17 August 2020 – 30 August 2020

12

31 August 2020 – 13 September 2020

13

14 September 2020 – 27 September 2020

14

28 September 2020 – 11 October 2020

JobKeeper 2.0

Eligibility period 2

High rate: $1,200

Low rate: $750

15

12 October 2020– 25 October 2020

16

26 October 2020 – 8 November 2020

17

9 November 2020 – 22 November 2020

18

23 November 2020 – 6 December 2020

19

7 December 2020 – 20 December 2020

20

21 December 2020 – 3 January 2021

21

4 January 2021 – 17 January 2021

Eligibility period 3

High rate: $1,000

Low rate: $650

22

18 January 2021 – 31 January 2021

23

1 February 2021 – 14 February 2021

24

15 February 2021 – 28 February 2021

25

1 March 2021 – 14 March 2021

26

15 March 2021 – 28 March 2021

Need help with working out eligibility?

If you need help to work out whether your business is eligible for the extension or whether certain employees will soon need to be paid a part-time rate, contact us today, we can help work out your eligibility in advance and plan for the new payment rates to your employees.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au© Copyright 2020. All rights reserved. Brought to you by Robert Goodman Accountants.

 

 

COVID-19 challenges for super funds

COVID-19 pandemic and associated government policy has provided challenges for the superannuation industry, particularly for trustees to provide appropriate information. ASIC has recently outlined its interim corporate plan, which includes protecting consumers from harm at a time of heightened vulnerability. This includes ensuring that trustees are communicating effectively with members on issues. While ASIC notes that a range of regulatory activities has been postponed, trustees' compliance and legal obligations remain unchanged.

The COVID-19 pandemic has presented some of the toughest challenges to businesses and the economy in recent memory. No surprises then that the superannuation industry has also been heavily impacted both in terms of early withdrawal of super and in investment opportunities. In the context of an uncertain future, ASIC has released information about what it expects from super funds including SMSFs, in order to provide a semblance of certainty to trustees.

"Trustees cannot be complacent when it comes to the role of superannuation in Australia. We should reflect on what the past few months have taught us and continue to adapt and evolve. The continued success of the superannuation system in Australia relies upon your next steps." – Jane Eccleston, ASIC's superannuation senior executive leader

Under ASIC's interim corporate plan, it has listed protecting consumers from harm at a time of heighted vulnerability and continuing to identify, disrupt, and take enforcement action against the most harmful conduct as two of its priorities. It notes that while it has postponed a range of regulatory activities to allow trustees to focus their resources and attention on responding to the pandemic, trustees' compliance with legal obligations remain unchanged.

Some of the issues ASIC has recently looked at including early release modelling, disclosure requirements, and insurance within super. In relation to insurance in super, it noted that trustees should communicate with member about the potential loss of insurance in certain circumstances where individuals accessed their super early. According to ASIC, in many cases it found there was little detail on how members' insurance through their super may be affected. Therefore, ASIC encouraged super funds to direct clear and personal communication on how early access affects insurance cover including the options to reinstate cover.

To further support individuals making informed decisions about the early release of super, ASIC reminded Australians that it has made changes to facilitate access to free and affordable advice with either financial advisers or within super funds. This includes:

  • allowing advisers to give a Record of Advice (ROA) instead of a Statement of Advice (SOA) to clients when providing advice about the early release scheme;
  • permit registered tax agents to give advice to existing clients about the early release scheme without needing an Australian Financial Services (AFS) licence; and
  • take a no-action position to allow super fund to more readily provide "intra-fund" advice in relation to the early release scheme.

Note that while the no-action position allows for a broader range of matters to be considered in the context of advice, such as matters relevant to the member's financial position and household circumstances, it can only be initiated by the member proactively seeking advice of this kind. ASIC says that trustees should not be the ones to initiate this conversation.

Further, ASIC notes that it will continue to work in conjunction with other agencies such as the ATO, ACCC, AFP, AUSTRAC and APRA to monitor the current environment where there is an increased risk of member harm from fraud and scams. Monitoring of this kind is not expected to be limited only to early release of super.

Need advice on your super?

If you need advice on superannuation matters including the early release scheme, you may be able to go to your trusted tax adviser for affordable advice. Otherwise, you could also approach your super fund for intra-fund advice which may be free.

IMPORTANT: This communication is factual only and does not constitute financial advice. Please consult a licensed financial planner for advice tailored to your financial circumstances Email us at Robert Goodman Accountants at reception@rgoodman.com.au.  © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants. 

Homebuilder

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HomeBuilder: What is it and how do you access it?

The Government has announced grants of $25,000 to encourage people to build a new home or substantially renovate their existing home.

 The HomeBuilder scheme targets the residential construction market by providing tax-free grants of $25,000 to eligible owner-occupiers, including first home buyers, to build a new home or substantially renovate their existing home.

 The grants will be distributed by the revenue office of the State or Territory where you live or plan to live.

 There are a few complexities to this grant that both home builders/renovators and the building industry need to be across before jumping in and signing a new contract on the expectation that the grant will apply.

Eligibility

Eligibility criteria apply to the individuals applying for the grant and the building project:

 Individual eligibility

The HomeBuilder scheme is available to owner occupiers including first home buyers. It is not accessible to owner builders, developers or investors.

 To be eligible you need to be:

·       An individual (not a company or trust); and

·       18 years of age or older; and

·       An Australian citizen.

And, you need to meet the income test. To be eligible, you cannot earn more than:

·       Individuals - $125,000 based on your 2018-19 or later tax return

·       Couples - $200,000 based on both of your 2018-19 or later tax returns

 The building project eligibility

The building contract must be signed between 4 June 2020 and 31 December 2020. And, the construction or renovation must commence within three months of the contract date.

 The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

 

New home*

The property value (house and land) does not exceed $750,000

Renovation**

Substantially renovate your existing home, where:

· The renovation contract is between $150,000 and $750,000, and

· The value of your existing property (house and land) does not exceed $1.5 million

* house, apartment, house and land package, off-the-plan, etc.

** renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

 If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

 ·       Own a property (house and land), and knock down the house to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;

·       Own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or

·       Buy the land after 4 June 2020, and then build, the total value of the land and build cannot exceed $750,000.

Integrity measures and pricing

Building contracts must be at arms-length, that is, the parties cannot be related or connected.

 Renovations or building work must be undertaken by a registered or licenced building service 'contractor'

(depending on the state or territory you live in) and named as a builder on the building licence or permit.

 When it comes to price, the terms should be commercially reasonable, and the contract price should not be inflated compared to the fair market price. The rules enable the purchaser to request that the builder demonstrate that the contract price for the new build or substantial renovation is no more than a comparable product (measured by quality, location and size) as at 1 July 2019.

Interaction with first home owner grant schemes

The HomeBuilder grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

Problem areas

As the building contract is entered into before the grant is approved, it will be important that the grant is not essential to finance the building project, just in case the grant is not approved.

In addition, as the builder needs to commence work within three months of the contract date, it will be important to ensure that the contract recognises the commencement dates.

Queensland

The Queensland Office of State Revenue (OSR) is now accepting applications for the Commonwealth HomeBuilder grant. For further information on eligibility and the application process, please refer to the OSR website. You can also contact the OSR at HomeBuilderGrant@treasury.qld.gov.au or call 1300 300 734.

It is expected that an online application will be available from 10 August 2020.

Frequently asked questions

The HomeBuilder frequently asked questions fact sheet has also been updated on the Treasury website.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained. We are here to help, contact us today.

Get ready for changes to the Jobkeeper

 

 A person standing in front of a window Description automatically generated

The JobKeeper payment will soon be changing. In order to support businesses through a potentially prolonged economic downturn due to the pandemic, the government has confirmed it will seek to extend the payment beyond the current end date of 27 September to 28 March 2021. The extension of the payment comes with significant changes including an introduction of a part-time rate for those who were employed less than 20 hours per week, a slow tapering of the payment rate from $1,500 to $1,000 per fortnight, and more stringent eligibility requirements.

Businesses nervous about the state of the economy in the wake of a potential second wave can breathe a sigh of relief; the government has confirmed its intention extend the JobKeeper beyond the current legislated end date of 27 September with a few tweaks to eligibility and payment rates.

While the government has extended the JobKeeper from 28 September 2020 to 28 March 2021, not everyone currently on the JobKeeper will be treated the same. Part of the changes include the introduction of a part-time rate to "better align the payment with the incomes of employees before the onset of the COVID-19 pandemic". Another significant change is the slow tapering down of the payment rate from the current $1,500 to $1,000 by 28 March 2021.

Period

Full rate per fortnight

Less than 20hrs worked per fortnight rate (Part-time rate)

28 September 2020 to 3 January 2021

$1,200

$750

4 January 2021 to 28 March 2021

$1,000

$650

Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the part-time rate from 28 September 2020. Businesses will therefore be required to nominate which payment rate they are claiming for each of their eligible employees. Payment by the ATO will continue to be made in arrears, and alternative tests are available where the employees' hours were not usual during the February 2020 reference period.

In addition to the change in payment rates, businesses that want to continue claiming the JobKeeper payment beyond 27 September 2020 will be required to reassess their eligibility with reference to their actual turnover in the June and September quarters as well as satisfying existing eligibility requirements.

Therefore, it may be possible for businesses to be eligible for the first extension (28 September 2020 to 3 January 2021) and not the second extension (4 January 2021 to 28 March 2021) depending on economic and trading conditions.

To be eligible for the JobKeeper for the period 28 September 2020 to 3 January 2021, businesses will be need to demonstrate that their actual GST turnover has significantly fallen in both the June quarter 2020 (April, May and June) and the September quarter 2020 (July, August, September) relative to comparable periods (generally the corresponding quarters in 2019).

Similarly, to be eligible for the second JobKeeper extension from 4 January to 28 March 2021, businesses will again need to demonstrate that their actual GST turnover has significantly fallen in each of the June, September and December 2020 quarters relative to comparable periods (generally the corresponding quarters in 2019). A 30% decline is considered significant (in line with existing eligibility requirements) for most businesses not including not-for-profits.

As the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, businesses will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO).

Therefore, businesses must be careful if they are intending to claim the extentions to the JobKeeper payment, however, the Commissioner will have the discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility.

Need help with working out eligibility?

If you need help to work out whether your business is eligible for the extension or whether certain employees will soon need to be paid a part-time rate, contact us today, we can help work out your eligibility in advance and plan for the new payment rates to your employees.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au© Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

 

Businesses that received the initial cash flow boosts as a part of the COVID-19 stimulus measures are in line for additional payments for the June to September quarter. Generally, the additional amount businesses will receive will be equal to the total amount that they initially received and will be split evenly between the lodged activity statements. However, if you've made adjustments or revised your activity statements after lodgement, the amount of additional cash flow boost payments you receive may be different.

If your business is one of many that received the initial cash flow boosts as a part of the government's COVID-19 economic stimulus measures, prepare for more help coming your way. When you lodge your monthly or quarterly activity statements for June to September 2020, your business will receive additional cash flow boosts.

The additional amount you receive will be equal to the total amount of initial cash flow boosts that you previously received and will be split evenly between your lodged activity statements. Therefore, quarterly payers will generally receive 50% of their total initial cash flow boost for each activity statement, while monthly payers will generally receive 25% of their total initial cash flow boost for each activity statement.

For example, if your business lodges activity statements quarterly and you received an initial cash flow boost of $10,000, when you lodge your June to September 2020 quarterly activity statements your business will receive $5,000 for the quarter ended June 2020 and $5,000 for the quarter ended September 2020. Although, if your business lodges monthly activity statements, you will receive $2,500 for each month of June, July, August and September 2020.

Beware however if your business has revised activity statements after lodgement, it may affect the amount of cash flow boost you may receive. You can check your statement of account through ATO online services for details on how your account may have been adjusted to work out how it will affect your cash flow boost payment.

Remember, if you have not made payments to employees subject to withholding, you need to report zero for PAYG withholding when lodging your activity statements to ensure that you receive the additional cash flow boost payments for June to September 2020. It is important that you do not cancel PAYG withholding registration until you have received the additional cash flow boosts.

If your business does not automatically receive the cash flow boost, it does not necessarily mean your business is not eligible, it may just mean the ATO requires additional information.

For example, to be eligible for the cash flow boost, your business will need to be a small to medium business with an annual turnover of less than $50m. However, the ATO has discretion to deem a business eligible if:

  • you're a new business that haven't previously lodged an income tax return because you started business on or after 1 July 2019; or
  • you can demonstrate that you expect your business to be a small or medium business entity with a turnover of less than $50m in the 2019-20 year even though your aggregate turnover for prior years was more than $50m.

To take advantage of the additional cash flow boost payments, make sure you lodge your activity statements by the due dates below:

  • For quarterly lodgers, the due dates are:
    • 28 July 2020 for the April-June 2020 quarter; and
    • 28 October 2020 for the July-September 2020 quarter.
  • For monthly lodgers, the due dates are:
    • 21 July 2020 for June 2020;
    • 21 August 2020 for July 2020;
    • 21 September 2020 for August 2020; and
    • 21 October 2020 for September 2020.

Need help?

If you're not sure whether your business will receive the cash flow boost payment, we can help you figure it out. We can also help you lodge your activity statements on time in order to receive the additional payments to help with the cash flow. Contact us today for expert service and advice.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

10 things to know this tax time

Tax time is here and the ATO has developed a list of important things you need to know this year. The ATO recognises 2019–20 has been difficult for many. The ATO will provide support where possible and help with information you can use to get things right, to ensure an easier tax time.

  1. The ATO has produced Tax Time Toolkits for various industries and occupations including rental properties and small business.  
  2. To reduce the risk of mistakes and amendments to tax returns, we will wait until your your income statements are 'Tax ready' before lodging your tax return. Pre-fill information should be finalised for most of our clients by the end of July.
  3. Employers no longer need to give their employees payment summaries or lodge a payment summary annual report to the ATO for information reported and finalised through Single Touch Payroll (STP). Instead, employees' income statements will be available to them in ATO online services through myGov. We can review your income statements on the tax agent portal. 
  4. After the last pay event for the financial year, employers need to make a finalisation declaration. They must do this by:
    • 14 July if they have 20 or more employees
    • 31 July if they have 19 or fewer employees.
  5. If you receives JobKeeper payments, these are treated as assessable income and will be included in the pre-fill data. If you are a sole trader, you need to include the payments as business income in your tax return.
  6. Funds received through the COVID-19 early access to superannuation measure are not assessable income and do not need to be included in your tax return.
  7. The cash flow boost amounts are non-assessable non-exempt (NANE) income. Employers are still entitled to a deduction for the pay as you go withholding paid. 
  8. The ATO has introduced an optional shortcut method for employees working from home during COVID-19. Employees can claim 80 cents for each hour they worked from home between 1 March 2020 and 30 June 2020, to cover all deductible expenses.
  9. The instant asset write-off threshold increased to $150,000 and eligibility was expanded to cover businesses with an aggregated turnover of less than $500 million from 12 March 2020 until 31 December 2020. To claim this tax time, assets must be first used or installed ready for use by 30 June 2020.
  10. If you are unable to make a payment by the due date, we can submit a payment-only deferral request form on your behalf until 14 September 2020 for eligible obligations. Please contact us for assistance. 
Email us at Robert Goodman Accountants at reception@rgoodman.com.au Source: ATO. All rights reserved. Brought to you by Robert Goodman Accountants.

With Tax Time 2020 just around the corner, many individuals on reduced income or have increased deductions may be eager to lodge their income tax returns early to get their hands on a refund. However, the ATO has issued a warning against lodging too early, before all your income information becomes available. It notes that employers will have until the end of July to electronically finalise their employees' income statements. This timeframe similarly applies to other information from banks, health funds and government agencies.

If you're a retail or hospitality worker, 2020 has perhaps not been the best year. However, as with everything, there is a silver lining, with tax time just around the corner, you may be able to get a larger refund than usual. This is due to either being on reduced incomes or having the ability to claim a wider range of deductions, such as deductions for protective equipment (eg gloves, face masks, sanitiser or anti-bacterial spray), or for some, a combination of both.

"This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work" – Assistant Commissioner Karen Foat.

With so many different types of incomes and expenses affecting tax obligations this income year, the ATO is taking a range of different approaches to support taxpayers and the community through tax time. In addition to updating published information on the website, the ATO is also encouraging taxpayers to search its online "ATO community" for any information that is not listed on its website. The community forum operates 24 hours a day and contains "ATO-endorsed" responses.

Remember also, for most people, income statements have replaced payment summaries. So, instead of receiving a payment summary from your employer, the income statements will be finalised electronically with the information provided directly to the ATO. The income statement can be accessed through myGov and the information is automatically included in your tax return if you use myTax. Tax agents will also have access to this information.

Although you may be eager to lodge as soon as possible, the ATO has warned against lodging your return too early (ie as soon as the new income year rolls around), as much of the individual information on income may not be confirmed until later. For example, the income statements which show year-to-date salary and wages, PAYG withholding tax, and employer super contributions may not be finalised by employers until 31 July.

According to the ATO, it is important to wait until the income statement is finalised before lodging a tax return to avoid either delays in processing or a tax bill later on. You income statement will be marked "tax ready" if it is finalised. Other information from banks, health funds and government agencies are also expected to be ready by the end of July and will be automatically inserted into your tax return.

If you still choose to lodge early, the ATO advises that you review any information that is pre-filled and confirm that it is correct and that you wish to use it. You will also be required to acknowledge that your employer may finalise your income statement with different amounts and that you may need to amend your tax return and additional tax may be payable.

If you would like to…

Lodge early? We can help you work out the best estimate of your income for the year from the various sources to minimise the chance of paying additional tax. If you're not sure about the amount of deductions you can claim this year, we can help you work that out, contact us for expert advice.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au © Copyright 2020 Thomson Reuters. All rights reserved. Brought to you by Robert Goodman Accountants.

Due Date for SBSCH Payments

If you use the Small Business Superannuation Clearing House (SBSCH), for 2019–20, super payments need to be accepted by the SBSCH by 23 June 2020 to allow time for the employees' super funds to receive the payments by 30 June. It is important to meet this timeframe as the timing of the payments may impact the individual tax position of employees.

For the purpose of claiming a tax deduction, superannuation payments are only considered to be paid once they have been processed and received by the employees' super funds, not the date the SBSCH accepts the payments.

However, in late 2019 a draft Practical Compliance Guide (PCG) was issued for consultation, which has now been finalised and published as PCG 2020/6.

With the finalisation of PCG 2020/6, where the conditions in the Guideline are satisfied, the Commissioner will not apply compliance resources to determine which income year employers are entitled to claim income tax deductions for super contributions made through the SBSCH provided your client makes the payment to the SBSCH before close of business on the last business day on or before 30 June.

Before you make super payments, you should confirm with your employees that their super fund details are correct in their SBSCH account, and make necessary updates as soon as possible. Please refer to the conditions in the PCG in regards to providing all relevant information to allow the SBSCH to process the payments.

Incorrect details may have an impact on the applicability of the PCG to your employers' circumstances.

The due date for quarterly super guarantee (SG) payments has not changed. The next quarterly due date is 28 July 2020.

Updated Office Opening Hours

White Clouds on Sky

Samford Office 2/32 Main St Samford

- Monday to Friday: Open 8:30am-5pm 

Telephone/Zoom appointments:

- Monday to Saturday 8am - 5pm

If you need to get in touch or send in your work, we ask that you do so by telephone, email, fax or mail to PO Box 35 Samford Qld 4520 or call the office to book an appointment on 3289 1700. You can also use a free iOS or Android PDF Scanner App on your phone to scan and email documents to us. For larger files, please get in touch with us and we can arrange a secure dropbox connection. Please call 3289 1700 or email reception@rgoodman.com.au .

Instant Asset Write Off Extended

The Federal Government has announced the extension to the instant asset write off for six months to 31 December 2020.

If your business is in relatively good shape and have been contemplating an asset purchase, now is the time. Not only will you be helping the Australian economy get back on its feet, you'll be doing your business a favour by taking advantage of the instant asset write-off threshold of $150,000. Which is the highest it has ever been or will likely to be for a while. 

With businesses all around the country starting back up after the COVID-19 pandemic, many, including the federal government are hoping to trade their way out of a potentially prolonged recession. Businesses that are in relatively good shape can help the economy and themselves at the same time by purchasing any needed capital assets and taking advantage of the instant asset write-off now.

From 12 March 2020 until 31 December 2020, the instant asset write-off threshold amount for each asset has been increased from $30,000 to $150,000. Which means that businesses are able to purchase an asset up to the value of $150,000 and claim the entire amount (or the business-use portion) as a tax deduction provided it is first used or installed ready for use between those dates. Any businesses with an aggregated turnover of less than $500m is eligible.

The timing of whether you get the instant asset write-off threshold of $150,000 will largely depend on when the asset was purchased and when it was first used or installed ready for use. Generally, if the asset was first used or installed ready for use between 12 March 2020 and 30 June 2020, the instant asset write-off threshold applies for the 2020 financial year. If the asset is first used or installed ready for use between 1 July 2020 and 31 December 2020, the instant asset write-off threshold applies for the 2021 financial year

However, not all assets are included in the instant asset write-off, a small number of assets are excluded and there are special rules for the purchase of a car.

For example, if your business purchases a luxury passenger car costing $100,000 on 5 June 2020, while the instant asset write-off threshold is $150,000, you are not able to deduct the entire cost of the car. The cost of car for depreciation is limited to the car limit for the year. For the year ending 30 June 2020, the car cost limit for depreciation is $57,581, therefore, you will only be able to deduct $57,581 under instant asset write-off and cannot claim the excess cost under any other depreciation rules.

If, in the above example, your business instead purchases a work ute which isn't designed to carry passengers and has been set up with all the trade tools in the tray for use in your business, the car cost limit for depreciation would not apply. So, if the ute was purchased for $70,000 on 5 June 2020, your business is able to claim the full deduction of $70,000.

It is also important to note that your business can claim the instant asset write-off on multiple assets, as long as the cost of each asset is less than the threshold. Whether or not GST is included or excluded from the threshold largely depends on if your business is registered for the GST. It will be crucial to get this right, particularly for those assets that are close to the threshold.

For any assets that cost the same or more than the relevant instant asset write-off threshold, it will usually need to be depreciated according to either simplified depreciation rules or general depreciation rules, depending on which one the business uses and the type of asset.

Want to do your bit to help the economy?

If your business has been contemplating an asset purchase under $150,000, now is the time to act. You will have until 30 June 2020 to first use it or have it installed ready for use to take advantage of a big deduction in the current 2020 financial year, or between 1 July 2020 and 31 December 2020 for the deduction in the 2021 financial year. Contact us today if you're not sure whether the asset you're planning to purchase would qualify.

Email us at Robert Goodman Accountants at reception@rgoodman.com.au .All rights reserved. Brought to you by Robert Goodman Accountants.