Chesterton Accounting

Working From Home Deductions

Australian Taxation Office, Income Tax

The ATO has announced a new easier method for claiming home office expenses due to the increase of people working from home due to the COVID-19 lockdown.

Workers will now be able to claim hours worked in their home at a rate of 80 cents per hour. This method will cover all home office expenses from 1st of March 2020.

If a person worked from home prior to this date then the usual method of claiming home office expenses would be used. However, you can still choose to use the pre-existing method after March if you prefer to do so or it will result in a higher claim.

 

Examples of the two different methods are listed below:

Pre-existing method

Hours spent working at home (this covers electricity and home office furniture) = 456 hours x 52 cents per hour = $237.12

Home internet – 60% for work purposes = $162

Mobile phone – 40% for work purposes = $84

Depreciation of laptop – 70% for work purposes = $116

Total claim = $599.12

 

New method

Hours spent working at home (this covers all home office expenses) = 456 hours x 80 cents per hour = $364.80

 

As seen in the above calculations, in this instance the pre-existing method will result in a higher claim.

We recommend that if you are working from home then you keep records of all hours spent in your home office as well as receipts for home office expenses. This will allow you to then compare which method will be best to claim at tax time.

https://www.ato.gov.au/Media-centre/Media-releases/New-working-from-home-shortcut/

April Newsletter

Uncategorized

Welcome to our April monthly newsletter!

We are delighted to announce that a new employee has joined our team! The role of Junior Accountant will be filled by Stacey Rees. Stacey is a local mum who lives in Kingaroy with her husband and children. She is currently studying a Bachelor of Business (Accounting) and aims to complete her degree later on this year. Please make sure that you welcome her if you see her around our office.
Please note that we are trading under our usual business hours and are currently still open to the public. We do kindly ask that during this time, face to face appointments are kept to a minimum. We encourage you to correspond with us via email and telephone but still offer face to face appointments if necessary. If you have a consultation booked with us then please wash your hands prior to coming in, ensuring you come in with only the necessary persons for the consultation and contacting us prior to reschedule if you are experiencing any sickness. This is in respect to our staff and other clients.
Head on over to our Website
Monthly tax tip:
The Government has announced an increase in tax benefits in response to the Coronavirus outbreak. Below is the list of key tax measures and payments available to small businesses that have been included in the $83.6 billion economic stimulus package.

• The instant asset write-off threshold has been increased from $30,000 (for businesses with a turnover of less than $50 million) to $150,000 (for businesses with a turnover of less than $500 million) from 12th of March to 30th of June 2020

• Immediate 50% deduction of the cost of an eligible asset with the balance to be depreciated under current depreciation rules for assets purchased from 12th March 2020 to 30th June 2021

• Tax-free payments from $20,000 to $100,000 for eligible small and medium businesses that employ staff based on their PAYG withholding obligations – this will be applied as a credit of 100% of the PAYG withheld when lodging an activity statement from March to June 2020 with the ATO

• Relief from the ATO for some tax obligations for persons affected by the Coronavirus outbreak – deferral of certain lodgements and payments

• Temporary relief for directors from any personal liability for trading whilst insolvent

• Wage subsidies to support employers who pay apprentices and trainees – employers who employee less than 20 full-time employees may be entitled to apply for a wage subsidy that will cover 50% of an apprentices or trainees wages for up to nine months from 1st January to 30 September 2020 with a maximum subsidy of $21,000 for each employee

If any of the above points apply to you or your business then please ensure that you apply for them to receive your full entitlement. Please note that some of the benefits are automatic and do not require an application but you do need to ensure that you are eligible. We will be available to answer any questions on the new stimulus package benefits and assist your business to gain these entitlements if required.
If you would like to schedule a consultation with us then please jump onto our website where you can see our availabilities and book a time that suits you.
Book an Appointment

 

Important Dates!

21 April:

  • Lodge and pay March 2020 monthly business/instalment activity statement

28 April:

  • Make super guarantee contributions for quarter ending 31 March 2020 to funds by this date
  • Lodge and pay quarter ending 31 March 2020 activity statement if lodging by paper
  • Pay quarter ending 31 March 2020 instalment notice. Lodge the notice only if you vary the instalment amount

30 April:

  • Lodge TFN report for closely held trusts for quarter ending 31 March 2020

 

Click to email us about the above

JobKeeper Payments

Australian Taxation Office, Small Business, Wages

The Government has just announced it’s third stimulus package update in response to the coronavirus outbreak.

A wage subsidy will be available to eligible businesses and not-for-profit entities who can demonstrate a loss in revenue of 30 per cent or more when compared to the relative period a year ago. Businesses with a turnover of $1 billion or more would need to demonstrate a loss in revenue of 50 per cent.

The subsidy would include a payment of $1,500 per fortnight for each eligible employee for a period of 6 months maximum. Eligible employees are those that were employed by the business from 1st of March 2020, including those that have been stood down and sole traders. They also have to be employed under a full-time, part-time or long-term casual contract and be over 16 years of age.

If a business receives this subsidy then they must pay at least $1,500 to the employee (before tax) each fortnight. Examples below.

  • If an employee usually receives $1,000 per fortnight (before tax) then the business would now pay them $1,500 per fortnight (before tax)
  • If an employee usually receives $2,000 per fortnight (before tax) then the business would continue to pay that amount to them
  • If the business operates as a sole trader without employees and they can demonstrate a 30 per cent loss in revenue then they would receive $1,500 per fortnight

You can register your interest with the ATO by clicking on the below link. Once parliament has passed this new package, the ATO will contact you to make arrangements for the application and information required.

https://www.ato.gov.au/general/gen/JobKeeper-payment/

Queensland COVID-19 Jobs Support Loans

Small Business

The Australian Government has announced a number of benefits for small business entities during this difficult time but each State also have their own extra benefits available. If you run a QLD business then you can apply for a low interest loan of up to $250,000 to assist with wages, rent and other business expenses. The loan would be provided for a term of ten years with no repayments or interest charged during the first year and then followed by two years of interest only payments. You can apply online through the below link until 25th of September 2020.

http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme

Employer Obligations during the Coronavirus Government Restrictions

Payroll & Employees

This is a trying time for all businesses but especially so the employers and their employees. Many businesses have been forced to close due to the current restrictions in place, but what does this mean for employees?

 

Q. Can employees be stood down and if so do I need to pay them?

A. You as the employer would need to first discuss any other options to keep your employees usefully employed before making the decision of standing them down. If this means that they work from home then you should do all you can to allow this. However, if you can prove that they cannot be usefully employed and that there is a stoppage of work that you cannot be reasonably held responsible for then you can stand them down. If your employees are under a part-time or full-time agreement then they can access their annual leave entitlements during the stand down period. If they have exhausted their leave entitlement then they would use unpaid leave. Your employees will still be considered employed by you even if they are unpaid during this time.

 

Q. Can I reduce an employees hours?

A. You as the employer would need to first discuss any other options with your employees to continue their ordinary hours. The employee would also need to agree with the reduction of hours before commencing the new arrangement. If agreed, then you can reduce their hours.

 

Q. What if my employee has to stay home because they have or may have Coronavirus?

A. Your employee would use their personal/carers leave entitlements and then use annual or unpaid leave.

 

Q. What if I choose to send my employees home as a precaution?

A. Your employees would generally still be entitled to their ordinary pay. If you direct them to not work but they are willing and able to work then you still have the responsibility to pay them under their agreement. However, if you are forced to send them home then please read the first question and  answer again.

 

Q. What if my employee has to stay home because their children no longer have access to childcare?

A. Your employee would use their personal/carers leave entitlements and then use annual or unpaid leave. However, you can arrange your employee to work from home in this case and should still attempt to provide them with alternative work before commencing unpaid leave.

 

Q. What if I choose to terminate employees?

A. You would still need to follow the usual Fair Work laws, e.g. provide notice, redundancy pay if applicable, pay out for leave accrued if applicable. Please be careful to ensure that you are not dismissing employees because of discrimination or a temporary absence due to illness or injury.

 

 

For more information about your obligations as an employer, please see the Fair Work website at https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws

Economic Response to the Coronavirus

Australian Taxation Office, Business Activity Statements, Income Tax, Payroll & Employees, Small Business

 

The Federal Parliament voted last night in acceptance of the $84 billion economic stimulus package. The bills have been passed in both the House of Representatives and the Senate.

Below is the list of key tax measures and payments that are included in the package.

Business:

  • The instant asset write-off threshold is set to be increased from $30,000 (for businesses with a turnover of less than $50 million) to $150,000 (for businesses with a turnover of less than $500 million) from 12th of March to 30th of June 2020
  • Immediate 50% deduction of the cost of an eligible asset with the balance to be depreciated under current depreciation rules for assets purchased from 12th March 2020 to 30th June 2021
  • Tax-free payments from $20,000 to $100,000 for eligible small and medium businesses that employ staff based on their PAYG withholding obligations – this will be applied as a credit of 100% of the PAYG withheld when lodging an activity statement from March to June 2020 with the ATO
  • Relief from the ATO for some tax obligations for persons affected by the Coronavirus outbreak – deferral of certain lodgements and payments
  • Temporary relief for directors from any personal liability for trading whilst insolvent
  • Wage subsidies to support employers who pay apprentices and trainees – employers who employ less than 20 full-time employees may be entitled to apply for a wage subsidy that will cover 50% of an apprentices or trainees wages for up to nine months from 1st January to 30 September 2020 with a maximum subsidy of $21,000 for each employee

Individuals:

  • Coronavirus supplement being paid by Centrelink at a rate of $550 per fortnight for eligible individuals
  • Tax-free payments of $1500 to social security, veteran and other income support recipients and eligible concession card holders
  • Temporary early release of superannuation of up to $10,000 during the 2020 financial year and a further $10,000 in the 2021 financial year – these payments will be tax-free and will not affect Centrelink payments
  • Government assistance to regions and communities that have been severely affected by the outbreak

Timing of Assistance:

  • Immediately, with deductions to be included in 2019-20 tax returns – Increased instant asset write off, accelerated depreciation
  • As soon as practicable – Support for Coronavirus-affected regions and communities
  • From 31 March 2020 – First round of $750 payments to support households
  • Applications from early-April – Assistance for existing apprentices and trainees
  • Applications from mid-April 2020 – Temporary early release of superannuation
  • From 27 April 2020 – Income support and a Coronavirus supplement
  • From 28 April 2020 – First phase of Boosting Cash Flow for Employers (tax-free PAYG credits)
  • From 13 July 2020 – Second round of $750 payments to support households
  • From 21 July 2020 – Second phase of Boosting Cash Flow for Employers (tax-free PAYG credits)

For more details, please visit the treasury website at https://treasury.gov.au/coronavirus

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