Robert Goodman Accountants Blog

Updated Office Opening Hours

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Samford Office 2/32 Main St Samford

- Monday, Wednesday & Friday: Open 8:30am-5pm (Re-opening from 1 June)

- Tuesday and Thursday:Open by appointment only

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. 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

Thank you for your patience and understanding! 

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$1,500 JobKeeper subsidy to keep staff employed

 

Date

· From 30 March 2020 for six months

· For employees employed at and from 1 March 2020

· First payments in first week of May 2020

Applies to

Based on comparable periods:

· Employers <$1 bn that have experienced a downturn of more than 30%

· Employers >$1bn that have experienced a downturn of more than 50%

 

A subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses over $1bn).

 

To be a part of the subsidy, employers will need to ensure that their employees receive at least $1,500 per fortnight (before tax). See the example below.

 

Eligibility

There are two levels of eligibility; for employers and employees.

 

Eligible employers are those with:

 

·         Turnover below $1bn that have experienced a reduction in turnover of more than 30% relative to a comparable period 12 months ago (of at least a month); or

·         Turnover of $1bn or more that have experienced a reduction in turnover of more than 50% relative to a comparable period 12 months ago (of at least a month); and

·         Are not subject to the Major Bank Levy.

 

Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.

 

Eligible employees are those who:

 

·         Were employed by the relevant employer at 1 March 2020; and

·         Are currently employed by the employer (including those who have been stood down or re-hired); and

·         Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March); and

·         Are at least 16 years of age; and

·         Are an Australian citizen, hold a permanent visa, are a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and

·         Are not in receipt of a JobKeeper Payment from another employer.

 

While it appears that businesses without employees can potentially qualify for JobKeeper Payments, it is not clear at this stage what conditions will need to be satisfied.

 

How the support is calculated

The ATO will administer this program and will make the $1,500 payments based on payroll information. The payments will be made monthly in arrears, so it is essential that you ensure your business and your employees continually meet the eligibility criteria.

 

The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the relevant employer.

 

How the support is provided

To access the JobKeeper subsidy, talk to us to assist you with the registration process and calculations.

 

If you want to manage the process yourself, you must:

 

·         Register

o    Applications are not yet open. However, you should register your intent to apply for the JobKeeper subsidy with the ATO (here). The ATO will provide you with regular updates and advise you when you can lodge your application

·         Assess turnover

o    Ensure you have an accurate record of your revenue for the 2018-19 income year and for the 2019-20 year to date

o    Ensure you keep an accurate record of revenue from March 2020 onwards

o    Compare your revenue for the whole of March 2019 with the whole of March 2020

o    Measure the % decline in your revenue and ensure it has declined by more than 30%

o    If you are not eligible in March, you may become eligible in another month

·         Identify eligible employees

o    Nominate the employees eligible for the JobKeeper payments – you will need to provide this information to the ATO and keep that information up to date each month. The ATO will use Single Touch Payroll to prepopulate the information in most cases.

o    Notify all eligible employees that they are receiving a JobKeeper payment. Employees can only be registered with one employer.

o    Pay eligible employees at least $1,500 per fortnight (before tax). If an employee normally receives $1,500 or more per fortnight before tax the employee should continue to receive their regular income.

o    Pay superannuation guarantee on normal salary and wages amounts paid to employees. If the employee normally receives less than $1,500 per fortnight before tax, the employer can decide whether to pay superannuation on the additional amount that is paid as a result of the JobKeeper program.

 

Sole traders and the self-employed can register their interest in applying for the JobKeeper payment with the ATO. These businesses will need to provide an ABN for the business, nominate an individual to receive the payment, provide the individual's TFN and declare their continued eligibility for the payments. Payments will be monthly to the individual's bank account.

 

Example

Adam owns a real estate business with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30% in in the coming months. The employees are:

 

Employee

Employment type

Salary per fortnight (before tax)

Anne

Full-time

$3,000

Nick

Part-time

$1,000

 

Both Anne and Nick are still working in the business.

 

Adam registers his interest in the JobKeeper scheme (from 30 March 2020), then applies to the ATO providing details of his eligible employees. Adam also advises Anne and Nick that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.

 

Adam's business is eligible to receive the JobKeeper Payment for each employee.

 

For Anne, the business will:

· Continue to pay Anne her full-time salary of $3,000 per fortnight before tax,

· Receive $1,500 per fortnight from the JobKeeper Payment

· Pay superannuation guarantee on Anne's salary

 

For Nick, the business will:

· Continue to pay Nick $1,000 per fortnight before tax salary

· Pay Nick an additional $500 per fortnight before tax (totalling $1,500)

· Receive $1,500 per fortnight from the JobKeeper Payment

· Pay superannuation guarantee on Nick's wage of $1,000 per fortnight (but can choose to pay SG on the full $1,500)

 

Adapted from Treasury fact sheet: JobKeeper payment - information for employers

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

COVID-19 OFFICE UPDATE

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Coronavirus (COVID-19) is causing significant disruption to businesses and households throughout Australia and the world. Robert Goodman Accountants are maintaining a close watch on developments.  We have activated our contingency planning that would allow us to continue our service delivery with minimal disruption.  We have no reported cases of illness relating to COVID-19 within Robert Goodman Accountants or persons who have come into contact with our team. In the meantime, we are seeking to minimise the chance of exposure and spread of COVID-19 by limiting meetings to telephone or video-call technology.

Opening Hours: 

From 8:30am Tuesday 31 March our office will be closed to receiving face to face appointments and dropping off/picking up documentation. However, it will be 'business as usual' as we will continue to be working remotely with the highest level of security and technology. 

Open for phone/Zoom appointments as follows: 
Monday:   8:30am - 5:00pm 
Tuesday:  8:30am - 5:00pm 
Wednesday: 8:30am - 5:00pm 
Thursday: 8:30am - 5:00pm 
Friday: 8:30am - 5:00pm 
Saturday: 10:00am - 5:00pm by Appointment
Sunday: Closed
8am and 6pm weekday appointments available.  Contact reception for details.

Whilst our offices are closed, we remain fully operational and are 100% committed to helping our clients through this worldwide emergency. Arrangements will be made to ensure that planned meetings will proceed using telephone or video-call technology such as Zoom. If you need to get in touch or send in your work, we ask that you do so by telephone, email, fax or mail. 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 note, if you mail documents to us we have a 24 hour policy before opening documentation. We request that any cheques be made payable to RGA Accounting Pty Ltd and direct deposited to our bank account rather than mailed.  

We have reached out to a significant number of clients over the last few weeks and will continue to reach out and try and assist in any way that we can.  If you have not yet heard from us, or need urgent assistance, we urge you to get in touch.  We can assure you that we will be available to support you and your business throughout this challenging period.

Stay healthy and positive! 

Call us on 07 3289 1700 or email us at Robert Goodman Accountants at reception@rgoodman.com.au .  

The Second $66.1 bn Stimulus Package: What You Need To Know

The Government released on 22 March 2020 a second, far reaching $66.1 bn stimulus package that boosts income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws. 

 

The stimulus measures are not yet legislated. Parliament will reconvene on Monday 23 March.

 

The Prime Minister has warned that there are no "quick solutions" and that business should prepare for 6 months of disruption.

 

In Summary

Business

·         Tax-free payments up to $100,000 for small business and not-for-profit employers. An increase in the previously announced initial tax-free payments for employers to a maximum of $50,000. In addition to this, a second round of payments will be made up to a maximum of $50,000, accessible from July 2020. 

·         Solvency safety net – temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.

·         Access to working capital – Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs.

·         Sole traders and self-employed eligible for Jobseeker payment – the eligibility criteria to access income support relaxed for the self-employed and sole traders.

·         Temporary relief from some Corporations Act requirements

Individuals

·         Early release of superannuation – individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans' Affairs payments.

·         Temporary reduction in minimum superannuation draw down rates – superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21.

·         Deeming rates reduced – from 1 May, superannuation deeming rates reduced further to a lower rate of 0.25% and upper rate of 2.25%.

·         Supplements increased, access extended and eased – for 6 months from 27 April 2020:

o    A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).

o    A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).

o    Eligibility for access to income support eased to include sole traders and the self-employed, and to those caring for someone infected or in isolation.

o    Waiting periods and assets tests temporarily waived.  

·         Bankruptcy safety net – temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor from $5,000 to $20,000.

 

The Government has flagged that additional stimulus packages will be required.

 

In detail

Support for business

Tax-free payments up to $100,000 for employers

·         From: 28 April 2020

·         Eligibility: Small and medium business entity employers and not-for-profit entities, with an aggregated annual turnover under $50 million.

 

The Government has increased the previously announced measures to provide cash flow support to business.

 

Now, eligible businesses with a turnover of less than $50 million will initially be able to access tax-free cash flow support, with the minimum amount being increased to $10,000 and the maximum amount increased to $50,000 (previously $2,000 to $25,000). However, additional support will be provided in the July – October 2020 period so that eligible entities will receive total minimum support of $20,000 and up to $100,000.

 

In order for a business to qualify for this support it must have been established prior to 12 March 2020. The rules are more flexible for charities because the Government recognises that new charities might be established in response to the pandemic.

 

The cash flow support measures will be provided in the form of a credit in the activity statement system. The support will be provided in two phases.

 

·         The first phase ensures that eligible employers receive a credit equal to 100% of the PAYG amounts withheld from salary and wages paid to employees during the relevant period, up to the maximum amount of $50,000.

·         The second phase ensures that eligible employers receive another series of credits, equal to the credits that were received under the first phase. For example, if a business received $40,000 of credits in the first phase it will receive a further $40,000 of credits in the second phase. These additional credits will be spread over two or four activity statement periods, depending on whether the employer lodges on a quarterly or monthly basis.

 

If a business pays salary and wages to employees but is not required to withhold any tax then a minimum payment of $10,000 will be made in the first phase and a further payment of $10,000 will be made in the second phase.

 

The credits are automatically calculated by the ATO and employers will need to lodge an activity statement to trigger the entitlement. If the credit puts the business in a refund position the excess amount will be refunded by the ATO within 14 days.

 

Businesses that lodge activity statements on a quarterly basis will be eligible to receive credits in the first phase for the quarters ending March 2020 and June 2020. Credits in the second phase will be available for the quarters ending June 2020 and September 2020. The minimum $10,000 payment will be applied to the first lodgement.

 

Business that lodge on a monthly basis will be eligible for the credits in the first phase for the March 2020, April 2020, May 2020 and June 2020 lodgements. Credits in the second phase will be available for the June 2020, July 2020, August 2020 and September lodgments. The minimum $10,000 payment will be applied to the first lodgement.

 

Eligibility for the measure will be based on prior year turnover. We will have to wait for the legislation for the finer details.

 

Not-for-profit employers, including charities, with an aggregated turnover under $50 million will also be able to access the cash flow support.

 

·       See: Cash flow assistance for businesses

 

Solvency safety net

A safety net has been put in place to protect businesses in temporary financial distress as a result of the pandemic by lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business. These include:

 

·         A temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000.

·         The time a company has to respond to statutory demands will increase from 21 days to 6 months.

·         For 6 months, directors will be provided with temporary relief from personal liability for trading while insolvent.

·         See also bankruptcy safety net below

 

It will be more important than ever for business to stay on top of their debtors.

 

Debts incurred will still be payable by the business. Only those debts incurred in the ordinary course of the business will be subject to the safety net measures.

 

·       See: Temporary relief for financially distressed businesses

 

Access to working capital for SMEs – supporting lenders

The Government has announced a Coronavirus SME guarantee scheme that will guarantee 50% of new loans to SMEs up to $20 billion. These loans are new short-term unsecured loans to SMEs.

 

SMEs with a turnover of up to $50 million will be eligible to receive these loans.

 

The Government will provide eligible lenders with a guarantee for loans with the following terms:

·       Maximum total size of loans of $250,000 per borrower.

·       The loans will be up to three years, with an initial six month repayment holiday.

·       The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

 

Loans will be subject to lenders' credit assessment processes with the expectation that lenders will look

through the cycle to sensibly take into account the uncertainty of the current economic conditions.

 

This latest measure builds on the previous initiatives to ensure small business can access capital, including:

·       An exemption to the responsible lending obligations to enable financial institutions to provide new credit, credit limit increases, and credit variations and restructures,

·       $15bn to the Australian Office of Financial Management to invest in wholesale funding markets used by small banks and non-banks to enable these lenders to support SMEs, and

·       Australian Banking Association members will defer loan repayments for 6 months for small businesses (affected small businesses will need to apply for relief).

 

Sole traders and self-employed eligible for Jobseeker payment

The eligibility criteria to access income support payments will be relaxed to enable the self-employed and sole traders whose income has been reduced, to access support.

 

More:

·       Income support for individuals

·       More financial support for coronavirus affected job seekers

 

Temporary relief from Corporations Act requirements

The Treasurer has been given a temporary instrument-making power to amend the Corporations Act to provide relief or modifications to specific compliance obligations.

 

ASIC has announced measures for those companies with a 31 December financial year that need to hold their AGMs by 31 May 2020, providing a two month no action period and enabling hybrid virtual AGMs.

Individuals

Early release of superannuation

From mid-April, individuals in financial distress will be able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax free and will not affect Centrelink or Veterans' Affairs payments.

 

To be eligible to access your superannuation you need to meet the following requirements:

·       you are unemployed; or

·       you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or

·       on or after 1 January 2020:

o    you were made redundant; or

o    your working hours were reduced by 20% or more; or

o    if you are a sole trader - your business was suspended or there was a reduction in your turnover of 20% or more.

 

For those eligible to access their superannuation, you can apply directly to the ATO through the myGov website from mid-April.

 

More:

·       Early access to superannuation

 

Temporary reduction in minimum superannuation draw down rates

Superannuation minimum drawdown requirements for account-based pensions and similar products will be reduced by 50% in 2019-20 and 2020-21.

 

Age

Default minimum drawdown rates (%)

Reduced rates by 50 per cent for the 2019-20 and 2020-21 income years (%)

Under 65

4

2

65-74

5

2.5

75-79

6

3

80-84

7

3.5

85-89

9

4.5

90-94

11

5.5

95 or more

14

7

 

The upper and lower social security deeming rates will be reduced further. As of 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate 0.25%.

 

More: Providing support for retirees

 

Time limited fortnightly $550 'coronavirus supplement'

For the next 6 months, the Government is introducing a new Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients in the eligible payment categories.

 

The payment will be made to those receiving:

·       Jobseeker payment (and those transitioning to the jobseeker payment)

·       Youth allowance jobseeker

·       Parenting payment

·       Farm household allowance

·       Special benefits recipients

 

In addition, eligibility to income support payments will be expanded to:

·       Permanent employees who are stood down or lose their job

·       Casual workers

·       Sole traders

·       The self-employed

·       Contract workers who meet the income test

 

The Government notes that these criteria could include those required to care for someone affected by the Coronavirus.

 

Asset testing has also been reduced and will be waived for 6 months. Income testing will still apply.

 

The payment is not available if you have access to any employer entitlements such as annual or sick leave or income protection insurance.

 

More:

·       Income support for individuals

 

Second $750 payment to households

The Government is now providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders residing in Australia (see the full list here). The payment will be exempt from taxation and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.

 

·       Payment 1 from 31 March 2020 (previously announced on 12 March): Available to people who are eligible payment recipients and concession card holders at any time between 12 March 2020 to 13 April 2020;

·       Payment 2 from 13 July 2020: Available to people who are eligible payment recipients and concession card holders on 10 July 2020.

 

The payments will be made automatically to those that meet the criteria.

 

More:

Payments to support households

 

Bankruptcy safety net

A temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will increase from $5,000 to $20,000. In addition, the time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.

 

Where someone declares their intention to enter voluntary bankruptcy, the period of protection from unsecured creditors will be extended from 21 days to 6 months.

 

More:

·       Temporary relief for financially distressed businesses

 

More information:

·       Joint media release with The Hon. Scott Morrison MP Prime Minister

·       Treasury: Support for Businesses

·       Treasury: Supporting Individuals and Households

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

The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice's or trainee's wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Employers will be reimbursed up to a maximum of $21,000, per eligible apprentice or trainee ($7,000 per quarter).

Support will also be provided to the National Apprentice Employment Network, who are responsible for coordinating the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

Eligibility

The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. 

Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy. The apprentice or trainee must have been in training with a small business as at 1 March 2020.

Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

Timing

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

An example of how this support can help your business

David's Plumbing is a small business that employs 10 people, including two full-time Australian Apprentices.

Taylor is a first year Australian Apprentice, aged 20, undertaking a Certificate III qualification.  She commenced her apprenticeship with David's Plumbing on 6 February 2020. Taylor receives a weekly wage of $532.89.

Lisa is a third year Australian Apprentice, aged 29, undertaking a Certificate IV qualification. She commenced her apprenticeship with David's Plumbing on 18 November 2017. She receives a weekly wage of $772.71.

David's Plumbing are eligible for Supporting Apprentices and Trainees which pays 50 per cent of the apprentices' wages that have been paid by David's Plumbing since 1 January 2020.

David's Plumbing will receive:

  • $9,059 subsidy for employing Taylor for 6 February 2020 to 30 September 2020
  • $15,068 subsidy for employing Lisa for 1 January 2020 to 30 September 2020

For more info https://bit.ly/2WHoKSu 

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

ATO Coronavirus administrative support

A series of administrative measures to assist businesses experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic has been announced by the ATO. These include deferring the payment date and amounts due on BASs, income tax assessments, FBT assessments, and excise by up to 4 months. Businesses will also be allowed to change payment and reporting cycles for GST and vary PAYG instalment amounts. Any interest or penalties applied to tax liabilities incurred after 23 January 2020 may be remitted.

ATO has recently announced that it will implement a series of administrative measures to assist taxpayers experiencing financial difficulty as a result of the coronavirus (COVID-19) pandemic. The measures that will apply is similar to those for taxpayers affected by the bushfires. However, one important point of difference is that while the bushfire measures applied automatically to particular geographical areas, assistance for those impacted by COVID-19 will not be automatically implemented. As such, taxpayers that have been affected will need to contact the ATO to discuss their situation in order to come up with a tailored support plan.

Commissioner Jordan said: "We know that many businesses and communities are being heavily affected by challenging economic conditions created by the outbreak of COVID-19…we understand this is a time of significant uncertainty and that we will need to be flexible in how we help businesses"

Businesses on a quarterly reporting cycle for GST will be able to change their reporting and payment to monthly in order to get quicker access to GST refunds. However, the ATO notes that businesses can only make the change from the start of a quarter, so any changes now will take effect from 1 April 2020, and once a change is made you must keep reporting monthly for 12 months before you can elect to revert back to quarterly reporting. Additionally, businesses registered for fuel tax credits that change to a monthly GST reporting cycle will also need to claim fuel tax credits monthly.

Another thing to note is that changing your GST reporting cycle to monthly doesn't mean you have to change your PAYG withholding reporting cycle, each is managed separately. Businesses that are quarterly PAYG instalment payers can vary their PAYG instalments on activity statement for the March 2020 quarter. To do this, they must lodge a revised activity statement before the instalment due date and before their tax return is lodged. Any business that vary their PAYG instalment rate or amount may also be eligible to claim a refund for any instalments made for the September and December 2019 quarters.

In addition to the above, the ATO will defer by up to 4 months the payment date of amounts due through the BAS (including PAYG instalments), income tax assessments, FBT assessments and excise. It will also consider remitting any interest and penalties applied to tax liabilities incurred after 23 January 2020 for any businesses affected by COVID-19. Taxpayers that need help with paying existing and ongoing tax liabilities are encouraged to contact the ATO to arrange a low-interest payment plan.

The ATO has also clarified that emergency accommodation, food, transport, medical or other assistance provided by employers to employees affected by COVID-19 may be exempt from FBT depending on the circumstances. However, despite the concessions offered, it notes that employers will still need to meet their ongoing super guarantee obligations for their employees. The ATO says by law, it cannot vary the contribution due date or waive the super guarantee charge where super guarantee payments are late or unpaid.

Need administrative support?

If you would like to change your payment/reporting cycle, vary your instalments or apply for a low-interest payment plan to give your business some breathing space, contact us today. Remember, the administrative support is not automatic, so you'll need to apply as soon possible to get the maximum benefit.

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.

Queensland COVID-19 Jobs Support Loans

Expressions of Interest: Queensland COVID-19 Jobs Support Loans

The Queensland Government announced on Tuesday, 17 March a new $500 million loan facility, interest free for the first 12 months, to support Queensland businesses impacted by COVID-19 retain employees and maintain their operations.

The $500 million concessional loan facility will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff.

The Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible.

To register your interest:

Email the Qld Government here with your full name, phone number and preferred email address.

Or

Freecall 1800 623 946

QRIDA will contact you when the scheme is open to applications shortly.

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

The Stimulus Package: What You Need To Know

The Government has announced a $17.6 billion investment package to support the economy as we brace for the impact of the coronavirus.

 

The yet to be legislated four part package focuses on business investment, sustaining employers and driving cash into the economy.

 

For business

1.     Business investment

·         Increase and extension of the instant asset write-off

·         Accelerated depreciation deductions

2.     Cash flow assistance for small and medium sized business

·         Tax-free payments up to $25,000 for employers

·         Wage subsidy of up to 50% of an apprentice or trainee wage

3.     Targeted support for severely affected sectors, regions and communities

 

For individuals

4.     Household stimulus payments to drive cash into the economy

·         Tax-free $750 payment to social welfare recipients

 

Parliament sits on 23 March. The Prime Minister has stated, "we have no plans to change the parliamentary sitting schedule."

 

Here's what we know so far:

Business investment

Increase and extension of the instant asset write-off

From 12 March 2020, the instant asset write-off threshold will increase from $30,000 to $150,000, and access to the write-off will be expanded to include businesses with aggregated annual turnover of less than $500 million until 30 June 2020.

 

The instant asset write-off is a tax deduction that reduces the tax liability of your business. It enables your business to claim an upfront deduction for depreciating assets in the year the asset was purchased and used (or installed ready to use). For example, if your business is a base rate entity (turnover under $25m) in a company structure you will get back 27.5% in your 2019-20 company return if the company acquires an asset that is used by 30 June 2020. If your business is likely to make a tax loss for the year, then the instant asset write-off is unlikely to provide a short-term benefit to you.

 

This is the fourth increase or extension to the instant asset write-off and businesses will need to be wary of what they are claiming and when:

 

Instant asset write-off thresholds

Small Business*

Medium business**

Large business***

1 July 2018 - 28 January 2019

$20,000

-

-

29 January - 2 April

$25,000

-

-

2 April - 12 March 2020

$30,000

$30,000

-

12 March - 30 June 2020

$150,000

$150,000

$150,000

* aggregated turnover under $10 million

** aggregated turnover under $50 million

***aggregated turnover under $500 million

 

Assets will need to be used or installed ready for use from when the changes were announced on 12 March 2020 until by 30 June 2020 to qualify for the higher threshold. Anything previously purchased does not qualify for the higher rate but may qualify for one of the other thresholds. Similarly, anything purchased but not installed ready for use by 30 June 2020 will not qualify.

 

The instant asset write-off only applies to certain depreciable assets such as a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business. You will also need ensure that there is a relationship between the asset purchased by the business and how the business generates income. You can't for example just go and purchase multiple television sets if they have no relevance to your business.

 

There are some assets that don't qualify such as horticultural plants, capital works (building construction costs etc.), assets leased to another party on a depreciating asset lease, etc.

 

What businesses can access the instant asset write-off

To access the instant asset write-off, your business needs to be a trading business (the entity buying the assets needs to carry on a business in its own right). It also needs to have an aggregated turnover under $500 million. Aggregated turnover is the annual turnover of the business plus the annual turnover of any "affiliates" or "connected entities". The aggregation rules are there to prevent businesses splitting their activities to access the concessions.  Another entity is connected with you if:

 

·         You control or are controlled by that entity; or

·         Both you and that entity are controlled by the same third entity.

 

Accelerated depreciation deductions

In addition to the increased instant asset write-off rules, accelerated depreciation deductions will apply from 12 March 2020 until 30 June 2021. This will bring forward deductions that would otherwise be claimed in later years.  

 

Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of the asset in the year of purchase. They can also claim a further deduction in that year by applying the normal depreciation rules to the balance of the asset's cost. This will presumably only be relevant if the business cannot already claim an immediate deduction for the full cost of the asset.

 

For example, let's assume that a business purchases a new truck for $250,000 (exclusive of GST) in July 2020. In the 2021 tax return the business would claim an upfront deduction of $125,000. The business would also claim a further deduction for the depreciation that would have arisen on the balance of the cost. If the business is a small business entity and using the simplified depreciation rules, this would mean an additional deduction of $18,750 (i.e., 15% x $125,000). The total deduction in the 2021 tax return would be $143,750. Without the introduction of this investment incentive the business would have claimed a deduction of $37,500 (i.e., 15% x $250,000).

 

This incentive will only be available in relation to new assets that are acquired after 12 March 2020 and are first used or installed ready for use by 30 June 2021. It will not apply to second-hand assets or buildings and other capital works expenditure.

Cash flow assistance for small and medium sized business

Tax-free payments up to $25,000 for employers

Tax-free cash flow support between $2,000 and $25,000 will be available to eligible businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020.

 

This is not a direct cash payment but a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees. The employer will need to lodge an activity statement to trigger the entitlement. If the credit puts the business in a refund position the excess amount will be refunded by the ATO within 14 days.

 

If a business pays salary and wages to employees but is not required to withhold any tax then a minimum payment of $2,000 will still be made.

 

Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Business that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgments. The minimum $2,000 payment will be applied to the first lodgement.

 

Eligibility for the measure will be based on prior year turnover. We will have to wait for the legislation for the finer details.

 

Wage subsidy of up to 50% of an apprentice or trainee wage

Eligible employers can apply for a wage subsidy of 50% of the apprentice's or trainee's wage for up to 9 months from 1 January 2020 to 30 September 2020. The payments are accessible to businesses with less than 20 employees. Employers will receive up to $21,000 per apprentice ($7,000 per quarter).

 

Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

 

In order to qualify for this payment the apprentice or trainee must have been in training with the business as at 1 March 2020. Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will also be eligible for the subsidy.

 

It is expected that employers will be able to register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

Targeted support for severely affected sectors, regions and communities

$1 billion has been committed to support sectors, regions and communities disproportionately affected by the economic impact of the coronavirus. Tourism, agriculture and education are specifically mentioned.

 

Initial measures include:

1.     Waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks

2.     Additional assistance to help businesses identify alternative export markets or supply chains

3.     Measures to promote domestic tourism

 

Further plans and measures will be developed with the affected industries and communities.

 

Administrative relief for certain tax obligations will also be provided, including deferred tax payments up to four months. The ATO will establish a temporary shop front in Cairns within the next few weeks to support the region's small businesses. Other initiatives to bring support to the communities are being considered.

 

Household stimulus payments to drive cash into the economy

Tax-free $750 payment to social welfare recipients

A one-off, $750 cash payment will be made to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Payments will be from 31 March 2020 on a progressive basis, 90% are expected to be made by mid-April.

 

The payment will be tax-free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.

 

There will be one payment per eligible recipient even if they qualify in multiple ways.

 

Casual employees able to access the Newstart 'sickness payment'

While not part of the stimulus package, the Prime Minister has stated that casual employees required to self-isolate or who contract the coronavirus will be eligible for a sickness payment (jobseeker payment) through Newstart. The normal waiting period for this payment will be waived.

 

We'll bring you more details as soon as they become available.

 

More information:

·         Media release - Economic Stimulus Package

·         Press conference transcript

·         Economic Response to the Coronavirus

·         ATO Support measures to assist those affected by COVID-19

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

 

The ATO has recently combined systems from 2002 and we are aware of two cases where clients have been charged backdated GIC from as far back as 2002. The ATO advises us that this is a system glitch and and they are working on removing the GIC from the relevant accounts but they do not know how long this will take. The GIC in these two cases does not need to be paid. If you have an amount of GIC on your account out of the blue please contact the ATO for further details or contact us to look into it for you.   

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

While many trustees will know that self-managed super funds (SMSFs) are required to prepare and implement an investment strategy, what they may not know is that specific factors have to be considered in forming the investment strategy including the risk of inadequate diversification. It is an area where the ATO has released further guidance on after finding that a significant proportion of SMSFs were holding 90% or more of their retirement savings in one asset or a single asset class (typically property).

The ATO has released further guidance on investment strategy requirements for trustees of self-managed superannuation funds (SMSFs). The guidance comes on the heels of ATO contacting 17,700 SMSFs in late 2019 where the SMSF annual return data indicated that they may be holding 90% or more of their retirement savings in one asset or a single asset class.

According to the ATO, it has concerns that these SMSFs may not have given due consideration to the risks associated with a lack of diversification when formulating and reviewing their investment strategy as required by law. It is also looking at SMSFs that have used limited recourse borrowing arrangements (LRBAs) to acquire the single asset or asset class (typically property).

Most trustees know that every SMSF is required by law to prepare and implement an investment strategy which needs to be reviewed regularly. But what they might not know is, by law, the following specific factors must be considered in the context of the whole circumstances of the fund:

  • risks involved in making, holding and realising, and the likely return from your fund's investments regarding its objectives and cash flow requirements;
  • composition of your fund's investments including the extent to which they are diverse (such as investing in a range of assets and asset classes) and the risks of inadequate diversification;
  • liquidity of the fund's assets (how easily they can be converted to cash to meet fund expenses such as the cost of managing the fund and income tax expenses);
  • fund's ability to pay benefits (such as when members retire and require a lump sum payment or regular pension payments) and other costs it incurs; and
  • whether to hold insurance cover (such as life, permanent or temporary incapacity insurance) for each member of your SMSF.

It is the second point in relation to diversification that the ATO has concerns over. While it notes in the guidance that trustees can still choose to invest all their savings in one asset or one asset class (such as property or shares), where that has occurred, the trustee should document that they have considered the risks associated with the lack of diversification.

In addition, trustees should also include how they still think the investment will meet the fund's investment objectives including returns and cash flow requirements.

Your SMSF auditor should be checking during the annual audit whether your fund has met the investment strategy requirements for the relevant year. Where your SMSF does not comply with the investment strategy requirements, you can rectify that by addressing the breach before the finalisation of the audit.

For example, if your strategy failed to adequately address the risk of diversification, you can fix it by attaching a signed and dated addendum to the strategy or a trustee minute which adequately addresses the requirements and show it to your auditor before he finalises the audit. If you do not address a breach that meets certain criteria, the auditor will be required to lodge an auditor contravention report (ACR) with the ATO which may lead to the imposition of penalties.

Need to review your strategy?

Remember, the law requires all trustees to invest in accordance with the best interest of all members and trustees should be aware of any legal risks that may result from investing in one asset class. If you're not sure whether your SMSF strategy is compliant, we can help.

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.