Small Business

May Newsletter

Income Tax, Small Business

Well, it’s safe to say that no business owner could have possibly predicted what 2020 had in store for them! After devastating bush fires and now the Coronavirus pandemic, the economy has certainly taken a hit. Small business owners and their workers have been greatly affected over the last few months. We encourage all of our business clients to apply for as many Government concessions, payments, reimbursements and subsidies that are available to them. The Government has made many announcements over the last few weeks so there certainly is a lot of information to wrap your head around – please contact us for a consultation (we also offer phone and video consultations) to discuss what your business is eligible for. We also ask kindly to respect our response times as we are busier than ever assisting clients in need and wrapping our own heads around the new legislation that is being passed. Most of all, we want to say that we are here for you and hope that you trust us as your advisor during this hard time – we only want to see your business flourish!

Monthly tax tip:
The ATO has announced a new and 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.

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!

15 May:

  • Lodge and pay tax returns for the year ending 30 June 2019 for all entities that did not have an earlier lodgement date

21 May:

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

26 May:

  • Lodge and pay quarter ending 31 March 2020 activity statement if lodging electronically

28 May:

  • Lodge and pay quarter ending 31 March 2020 superannuation guarantee charge statement if contributions were not paid on time*

*Superannuation guarantee charge is not tax deductible
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

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

6 month deferral on small business loan repayments as a result of the Coronavirus outbreak!

Small Business

Banks are now allowing a 6 month deferral on small business loan repayments as a result of the Coronavirus outbreak. The Australian Banking Association chief executive Anna Bligh advises that small business owners should contact their bank now to apply for the deferral. The central bank is also setting up a $90 billion term funding facility specifically for small business clients. Now is not the time to be proud, if you are struggling in your business then please reach out for the help that is being offered. Full story can be read in the link below.

https://www.accountantsdaily.com.au/business/14161-banks-to-defer-small-business-loan-repayments-for-6-months?utm_source=Accountants+Daily&utm_campaign=21_03_20&utm_medium=email&utm_content=1&utm_emailID=c0f3478d376245b1ff05a695f01fbdb49f42f8e2e369799f58fabda77f2adf97&fbclid=IwAR1tKRjvC5aO2bTbmxkvwwpSgRuS1EtMJyeKHafLqPoT9mIL7I36PdAkyX8

Increase in tax benefits in response to the Coronavirus outbreak

Income Tax, Small Business

The Government has announced an increase in tax benefits in response to the Coronavirus. Parliament will have a final sitting next week to consider the $17.6 billion economic stimulus package in hopes of protecting the economy and supporting businesses and workers. Below is the list of key tax measures and payments that are hoping to be included in the package. However, please note that the package of Bills has not been introduced yet and nothing can be confirmed or guaranteed at this stage. We will keep our clients and readers up to date as we hear the results of this package and hope to include them in our April newsletter.

  • 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 $2000 to $25,000 for eligible small and medium businesses that employ staff based on their PAYG withholding obligations – this will be applied as a credit of 50% of the PAYG withheld when lodging an activity statement from March to June 2020 with the ATO
  • Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders from 31st March 2020
  • Relief from the ATO for some tax obligations for persons affected by the Coronavirus outbreak – deferral of certain lodgements and payments
  • 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 – applications are set to be taken from April 2020
  • Government assistance to regions and communities that have been severely affected by the outbreak

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

Scroll to Top
Scroll to Top