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Covid-19 resources

Multiple sources of help and further explanations are available below regarding the relief packages and programs recently released by our Governments. All relate to Covid-19 and are grouped here so you don’t have to go searching for the information. If you have any questions, or require further assistance, please send us an email or phone.

Please click on the following links to access a wide range of resources. Once done, click on the X (top right) to close the article and you’ll return to this list.

  • Breakdown of Federal Government Covid-19 support. Click here.
  • 12 Treasruy Fact Sheets on Covid-19 releif measures. Click here.

Historic $130bn wage subsidy to cover 6 million workers

Prime Minister Scott Morrison has now unveiled an extraordinary $130 billion wage subsidy which will see businesses receive $1,500 a fortnight per employee for the next six months.

In the third and largest economic stimulus package announced by the government in response to the coronavirus pandemic, up to 6 million workers are set to be eligible for the $130 billion wage subsidy, known as the JobKeeper payment.

The flat $1,500 payment, which will be delivered by the ATO, will be paid to businesses, including businesses structured through companies, partnerships, trusts and sole traders.

Employers will be required to pass on the full $1,500 a fortnight, before tax, to eligible employees.

To qualify, businesses with a turnover of less than $1 billion will need to self-assess a reduction in revenue of 30 per cent or more, relative to a comparable period a year ago.

Businesses with a turnover of more than $1 billion will need to demonstrate a loss of 50 per cent of revenue.

Eligible employees will include those employed by the employer at 1 March 2020, including those who have been stood down. Retrenched workers can be re-hired to qualify for the payment.

How to apply

Eligible businesses, including not-for-profits, charities, and self-employed individuals, will need to register an intention to apply on the ATO’s website.

Information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business, including those stood down or rehired, will need to be provided to the ATO, although the Tax Office will look to use Single Touch Payroll data to pre-populate the employee details for the business.

The ATO will make payments to the employers monthly in arrears but the first payment will be sent in the first week of May and will be backdated to 30 March 2020 to allow employers to start paying their workers now.

Employers will be required to report the number of eligible employees employed by the business to the ATO on a monthly basis.

‘A lifeline’

According to Mr Morrison, the wage subsidy is meant to prop up businesses by paying for their employees even as the economy comes to a standstill.

“We will pay employers to pay their employees and make sure they do,” said Mr Morrison.

“This plan is about keeping those businesses together, by keeping these employees in these businesses.

“We want to keep the engine of our economy running through this crisis. It may run on idle for a time, but it must continue to run.”

What employees will get

Businesses must pay their employees a minimum of $1,500 per fortnight, before tax.

According to Treasury’s fact sheet, if an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements, with the JobKeeker payment to subside all or part of their income.

If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax, meaning employers will not be able to pocket the difference.

If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.

The $1,500 will be taxed as ordinary income but employers can choose to pay superannuation on the amount.

Employees who receive the JobKeeker payment will not be allowed to double dip with the recently expanded JobSeeker payment, which is paid through Services Australia.

The latest package by the government brings the total amount thrown at the coronavirus crisis to $214 billion, including the $66.1 billion second tranche support package and the initial $17.6 billion.

Mr Morrison said the government is currently in discussions with Labor to reach agreement over the latest announcement and will be looking to recall Parliament shortly to speed through legislation as it did with the first two packages.

Treasury example:

Employer with employees on different wages

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 per cent in the coming months. The employees are:

Anne, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues working for the business; and
Nick, who is a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues working for the business.
Adam is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits for the business and its employees:

The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s salary and will continue paying the superannuation guarantee on Anne’s income;
The business continues to pay Nick his $1,000 per fortnight before tax salary and an additional $500 per fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight before tax from the JobKeeper Payment which will subsidise the cost of Nick’s salary. The business must continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Nick is earning. The business has the option of choosing to pay superannuation on the additional $500 (before tax) paid to Nick under the JobKeeper Payment.
Adam can register his initial interest in the scheme from 30 March 2020, followed subsequently by an application to ATO with details about his eligible employees. In addition, Adam is required to advise his employees 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.

Self-employed
Melissa is a sole trader running a florist. She does not have employees. Melissa’s business has been in operation for several years. The economic downturn due to the Coronavirus has adversely affected Melissa’s business, and she expects that her business turnover will fall by more than 30 per cent compared to a typical month in 2019.

Melissa will be able to apply for the JobKeeper Payment and would receive $1,500 per fortnight before tax, paid on a monthly basis.

Jotham Lian
31 March 2020
accountantsdaily.com.au

Covid-19 Update – Small Business

Small businesses will be the hardest hit by the ramifications of Covid-19.  The following is more information to help small business owners better understand some of the business support that's now available.

Late last week there was an article added to this site about the Federal Governments stimulus package.

Then 4 Fact Sheets became available to help understand the stimulus package.  Plus more information can be found here .

  1. Cash flow assistance for business
  2. Stimulus payments to households to support growth
  3. Assistance for severely affected regions
  4. Delivering support for business investment
     

This latest update provides more detail on how the stimulus package operates.  For example, Cash flow payment for employers.  'Eligible businesses will automatically receive payments of 50 per cent of their Business Activity Statements or Installment Activity Statement from 28 April 2020, with refunds to be paid within 14 days.'  Read more detail here.

 

ATO
Treasury
Small Business WA

 

 

 

PM launches $17.6 billion virus stimulus plan

The Prime Minister has announced a stimulus plan to curb the economic impact of the coronavirus and keep “Australians in jobs and businesses in business”. 

           

The package, aimed to provide an immediate stimulus to the economy, will be worth $17.6 billion, with a projected impact of $22.9 billion.

It includes tax relief for small businesses, a $750 one-off cash payment for welfare recipients and wage assistance to keep apprentices in work.

“Each measure is temporary, each measure is targeted, and each measure is proportionate to the challenges we face,” Treasurer Josh Frydenberg told media in Canberra. 

Prime Minister Scott Morrison confirmed that the government plans to spend $11 billion before June 30 this year, with the remainder to be injected into the economy before the end of the next financial year.

“This plan is about keeping Australians in jobs. This plan is about keeping a business in business, particularly small and medium-sized businesses, and this plan is about ensuring the Australian economy bounces back stronger on the other side of this and, with that, the Budget bounces back with it,” Mr Morrison told media. 

Under the plan, the government is lifting the threshold for the instant asset write-off from $30,000 to $150,000, and expanding it to businesses with an annual turnover up to $500 million, up from $50 million. It has also announced a 50 per cent accelerated depreciation deduction above existing deductions, which will be available to June 30, 2021.

Additionally, businesses with turnover up to $50 million will receive a tax-free cashflow boost for employers worth up to $25,000, designed to help pay wages. 

It has also set up a coronavirus regional and community fund aimed to assist those in the most impacted areas such as tourism and export. 

 

 

Maja Garcia Djurdjevic
12 March 2020
mybusiness.com.au

 

 

SG amnesty bill passes Parliament

The long-awaited superannuation guarantee amnesty bill has now passed both houses, with employers set to get six months to disclose historical non-compliance before tougher penalties apply.

         

The Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 has now been passed and is awaiting royal assent.

The SG amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance dating from 1 July 1992 to 31 March 2018.

An employer will not be able to benefit from the amnesty for SG shortfall relating to the quarter starting on 1 April 2018 or subsequent quarters.

It will allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as remove the administrative component and the Part 7 penalty that may otherwise apply in relation to SG non-compliance.

The amnesty period will start from 24 May 2018 and end six months from the date it receives royal assent.

The new legislation will also impose minimum penalties on employers who fail to come forward during the amnesty period by limiting the commissioner’s ability to remit penalties below 100 per cent of the amount of SG charge payable.

Around 7,000 employers have since come forward to voluntarily disclose historical unpaid super since the amnesty was first announced on 24 May 2018.

Treasury estimates an additional 7,000 employers will come forward during the six-month amnesty period, returning $230 million of superannuation to employees who may have otherwise completely missed out.

Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said the passing of the legislation should not be viewed as giving a free kick to employers who had been previously non-compliant.

“Employers will not be off the hook. To use the amnesty, they must still pay all that is owing to their employees, including the high rate of interest. However, the amnesty will make it easier for workers to secure the super they are owed by not hitting employers with the penalties usually associated with late payment,” said Ms Hume.

“If employers do not take advantage of the amnesty, they will now face significantly higher penalties when they are caught. In addition, throughout the amnesty period the ATO will still continue its usual audit and enforcement activity against employers for historical obligations they do not own up to voluntarily.

“We encourage employers to check they don’t owe outstanding super — and if they do, to take advantage of this once-only opportunity to set things right before much tougher penalties apply.”

 

 

Jotham Lian 
24 February 2020
accountantsdaily.com.au

 

 

ATO flags most common SMSF return mistakes

The Australian Taxation Office has revealed the top five most frequent errors made in the submission of SMSF annual returns as well as how advisers can avoid them when lodging this year.

         

A bank account that isn’t unique to the SMSF

The ATO said there must be a bank account in the fund’s name to manage the SMSF operations and to accept contributions, rollovers of super and income from investments.

Further, it said the account must be separate from the trustees’ individual bank accounts and any related employers’ or advisers’ bank accounts.

“This will protect your fund’s assets and ensure super payments can be made to your SMSF,” the ATO said.

Providing an incorrect electronic service address (ESA)

The ATO said an ESA allows an SMSF to receive electronic remittance advice and contributions if it has members receiving super from non-related employers. Therefore, it’s not an email address or the contact details of the SMSF messaging provider.

“An ESA consists of alphanumeric characters with a combination of upper and lower-case characters and is case sensitive,” the Tax Office said.

Not valuing an SMSF’s assets at market value

The Tax Office noted that SMSF assets need to be calculated at market value as at 30 June to prepare the fund’s accounts, statements and SAR.

“If you follow our valuation guidelines, we’ll generally accept the valuation you provide,” the ATO said.

“Accurate asset valuation is important to ensure your SMSF retains its complying fund status. Penalties may apply for inaccurate valuations as these can have an impact on your members’ balances.”

Trying to lodge with zero assets

The ATO said an SMSF is not legally established until the fund has assets set aside for the benefit of members. As a result, the regulator said it won’t accept a SAR from an SMSF that has no assets unless the fund is being wound up.

“If this is your SMSF’s first year and you have no assets set aside for the benefit of members, you can ask us to either cancel your fund’s registration or flag the SMSF’s record as return not necessary (RNN),” it said.

Lodging an SAR without auditor details

An approved auditor examines an SMSF’s financial statements and assesses the fund’s compliance with super law, meaning an audit must be completed before your SAR can be lodged, according to the ATO.

“A SAR lodged without auditor’s details will be suspended and not recognised as a lodgment. This will impact the complying status of the fund until the SAR is lodged with the required information,” the ATO said.

“Appoint an auditor at least 45 days before your SAR is due to ensure the audit is completed in time to meet the lodgment date.”

 

 

Adrian Flores 
26 February 2020
accountantsdaily.com.au

 

 

Expected GDP by country 2010 to 2100

This animated chart is simply amazing but some world events could have a negative impact.  Even so, it's fascinating to see how the world might change into the future.

Simply click on the image and see how global economies are expected to change between 2010 and 2100.  

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATO expands small business review pilot

‘Not interested in dragging disputes out’:  The ATO has stopped short of making its small business independent review service a permanent feature as it expands and extends the pilot program until the end of the year.

         

The ATO’s independent review service trial for small businesses will now be extended to 31 December 2020 and expanded to include disputes involving GST, excise, luxury car tax (LCT), wine equalisation tax (WET) and fuel tax credits (FTC).

Launched by commissioner Chris Jordan on 1 July 2018, the pilot program had initially only considered disputes involving income tax audits and was set to run for only 12 months.

With 138 small businesses having taken up the offer since the pilot began, ATO deputy commissioner Scott Treatt said its early success had prompted the Tax Office to expand the pilot.

“Pleasingly, we’ve only received two objections from businesses that have been through our independent review pilot since it launched on 1 July 2018. This result demonstrates that our pilot program is working as intended for small business in that it’s helping to resolve disputes prior to matters reaching objection,” Mr Treatt told Accountants Daily.

“We proactively invite small businesses to take advantage of the service when we issue an audit finalisation letter. We’ve found that the service is helping us resolve disputes with small businesses earlier.

“Our officers will make every effort to resolve disputes as quickly as possible. We are not interested in dragging disputes out.”

The independent review process had been previously reserved for entities with a turnover greater than $250 million.

The pilot program will see eligible small businesses with an audit in progress be contacted by their audit case officer with the offer of a review before issuing assessments.

According to Mr Treatt, small businesses can expect an independent officer from outside its audit area to review the facts and technical merits of the ATO’s audit position.

The most common issues that small businesses have asked for a review into to date includes omitted cash income, usually due to inadequate record keeping; administrative penalties; deductibility of business expenses; and characterisation of payments to related individuals.

Disputes over superannuation, fringe benefits tax, fraud and evasion findings, and interest will not be considered by the independent review service at this stage.

 

 

Jotham Lian 
28 February 2020 
accountantsdaily.com.au

 

 

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Latest News. 7-9 individual articles every month and all chosen for their relevance. Our website is a great place to stay informed.

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Calculators. A good comprehensive range of calculators to help you better understand and manage your personal and family financial issues. Four of the more popular are: Pay calculator, Budget Calculator, Loan Calculator, and Superannuation Calculator

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Ask us a question at any time. If you have a question on any related topic then don’t hesitate to use a form on our site to ask.

Your information is private and confidential and should be treated that way. Using Secure File transfer means your information is encrypted when sent in either direction over the Internet.

Many sites also have a message window feature that displays messages of interest or that cover topics and deadlines you should be aware of.

 

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Risks when dating documents in 2020

Do you use the short form year when dating documents?

       

The risk is that formatting the date as DD/MM/YY leaves the year able to be altered by the adding of two digits after the ‘20’ to (fraudulently) post or pre-date the document.

It would be wiser, as a standard habit to always write ‘2020’ in full when dating documents.  Doing so means the date cannot be altered or manipulated.

 

 

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