Small Business

Queensland COVID-19 Jobs Support Loans

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

 

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!

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

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

March Monthly Newsletter!

Chesterton Accounting is growing again and we are currently looking for an experienced accountant to join our small team in preparation for tax time. The accounting position will commence in April and we are very excited to introduce our next team member to all of our clients. Stay tuned by following our Facebook page to see who our new accountant will be next month.

Monthly tax tip:
Investment properties, including residential and commercial can be a great tax deduction. Any investment losses, including that from an investment property can actually be used to offset taxable income, which will reduce the tax liability. Investment property deductions can include council rates, landlord insurance, garden maintenance, general repairs, advertising, depreciation of fixtures and fittings as well the interest and fees paid on the property loan. These deductions will offset the rental income received and may result in a loss. This loss can then be claimed against other income received including wage, business and other investment income. Majority of investment properties are negatively geared, meaning that they are a long-term investment and you shouldn’t expect to really make some earnings until you sell the property. So, this investment can be a great choice for someone who has a high taxable income and can afford to invest some of their personal capital whilst reaping the tax benefits. We do recommend discussing your options surrounding investments with your financial advisor. However, if you would like to know more about claiming rental property deductions and losses then please contact us.
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.

Important Dates!

21 March:

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

31 March:

  • Lodge and pay tax returns for companies and self-managed superannuation funds with income of more than $2 million
  • Lodge and pay tax returns for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more
Click to email us about the above

February Newsletter

Welcome to our February monthly newsletter!

Bushfires have been spreading over Australia during the last few months with many individuals, business owners and farmers affected. The Australian Taxation Office have created a list of the impacted areas that will automatically receive lodgement and payment deferrals for income tax, activity statements, SMSF and FBT returns until 28 May 2020. You can check if your postcode is listed online or call the emergency support Infoline on 1800 806 218 for more information on what these concessions cover. There are also some other support services offered which include:
  • give you extra time to pay your debt or lodge tax forms such as activity statements
  • help you find your lost tax file number (TFN) by using methods to verify your identity such as your date of birth, address and bank account details
  • re-issue income tax returns, activity statements and notices of assessment
  • help you re-construct tax records lost or damaged in the bushfires
  • fast track any refunds you are owed
  • set up a payment plan tailored to your circumstances including an interest-free period
  • remit penalties or interest charged during the time you have been affected by the bushfires

We strongly recommend taking advantage of these concessions if you have been affected. We, as a firm have also made the decision to donate hours to those that are struggling to keep up with their accounting requirements. If you have been affected or know someone who has been, then please contact us to discuss what pro-bono services we can offer you to assist you and your family through this hard time and get you back on track.

Monthly tax tip:
 Do you contribute anything to your superannuation fund? A study by MYOB has found as many as one-third of the self-employed are not making any contributions to their own superannuation.
When you are employed by another person, they must contribute 9.5% on earnings to your superannuation account, but what happens when you are employed by yourself? The self-employed cannot rely on anyone else to make contributions for them, this can now only be made by them. This of course isn’t mandatory but can be a great way to ensure you set yourself up for your own retirement.
Personal superannuation contributions can be claimed as a tax deduction simply by completing a form and sending it to the superannuation company you use. The maximum amount that can be contributed and claimed is currently $25,000 for this financial year. This amount does include any contributions that can also be made by employers so if you are also employed by another person then you will have to ensure your contributions and their contributions will fall under the cap.
So why would you use this tax deduction? Well superannuation is taxed at 15% on earnings which is generally a fair bit less than what the average taxpayer would pay. The other benefit to this tax deduction is the fact that you are saving for your retirement. We recommend discussing your options surrounding retirement savings with your financial advisor. However, if you would like to know more about claiming superannuation contributions then please contact us.
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.
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Important Dates!

21 February:

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

28 February:

  • Lodge and pay quarter ending 31 December 2019 activity statement
  • Lodge and pay tax returns for new registrant self-managed superannuation funds
  • Lodge and pay annual GST return for the year ending 30 June 2019
  • Lodge and pay quarter ending 31 December 2019 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
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