How to Access Your Income Statement

Accessing Your Income Statement Online Via myGov is Simple!

 

If your employer reports through Single Touch Payroll (STP) you may not receive a payment summary from them.

Instead, your payment summary information will be available in ATO online services through myGov. It is now called an ‘income statement’.

If you haven’t created a myGov account yet you can follow these instructions.

If you don’t want to create a myGov and link to the ATO you can phone the ATO on 13 28 61 to get a copy of your income statement.

If you use a registered tax agent, they will have access to your income statement so they can complete your tax return.

About Your Income Statement

Your income statement is the equivalent of a payment summary (which some people still call a group certificate).

Your income statement will show:

  • your year-to-date salary and wages
  • the tax that has been withheld
  • the super amounts your employer has to pay for you.

This is similar to the information you would normally see on your payslip.

Your income statement will be updated each time your employer pays you. It may take a few days for the information to be available online.

After the end of the financial year, when your income statement has been finalised by your employer, the status will change to ‘Tax ready’. This means the information is ready for you to use in your tax return.

How to Access Your Income Statement

Once you have a myGov account set up and linked to ATO online services you should:

  1. Log in to myGov.
  2. Select Australian Taxation Office.
  3. Select (from the top of the screen) Employment and then Income statements.

Using Your Income Statement For Your Tax Return

You can view your income statement at any time throughout the financial year. However, once your income statement information is finalised by your employer it will be identified as ‘Tax ready’.

After 1 July, your STP income statement information will be pre-filled into myTax, even if your employer hasn’t finalised it yet. If your income statement shows as ‘Not tax ready’, you will see a red box with ‘Required’ next to your employer’s name.

To complete your tax return, you should wait until the information is ‘Tax ready’.

However, if you choose to use information from an un-finalised income statement to lodge your tax return, you will need to:

  • review this pre-filled information and decide whether you wish to use it before you submit your tax return.
  • acknowledge that
    • your employer may finalise your income statement with different amounts
    • you may need to amend your tax return and additional tax may be payable.

If you use a registered tax agent, they will have access to the information they need to complete your tax return.

If you have more than one job and your other employers have not yet started STP reporting, you should receive payment summaries from them.

Make sure you have all the information you need to prepare your tax return. This may include both an income statement and payment summaries from other employers.

 

How to Create a myGov Account & Link to ATO

Linking your myGov account to the ATO to manage your tax and super affairs online is easy when you follow these steps below!

 

 

CREATING A myGov ACCOUNT

  1. Go to gov.au and select ‘Create an account.’
  2. Read the terms of use, then select ‘I agree to continue.’
  3. Enter an email address only you will use and select ‘Next.’
  4. myGov will email you a confirmation code.
  5. Enter the code.
  6. And select ‘Next.’
  7. Enter your mobile number to receive security codes via SMS when you sign-in to your account.
  8. myGov will send you a confirmation code via SMS.
  9. Enter the code and select ‘Next.’
  10. You’ll now be asked to create a password.
  11. And select ‘Next.’
  12. Choose and answer three secret questions.

You now have a myGov account.

Your myGov username will be emailed to you.

Keep it somewhere safe for future reference, but you will also have the choice to use your email address or mobile phone number to log in.

Once you have a myGov account, you can link to the ATO’s online services.

 

LINKING ATO SERVICES TO YOUR myGov ACCOUNT

  1. Now, navigate to the Services page.
  2. On the list of member services, find ‘Australian Taxation Office’ and select to start the linking process.
  3. You will need to agree to myGov storing your legal name and date of birth.
  4. You will now need to provide additional information to identify your ATO record. You need to confirm your identity by answering a series of questions specific to you.
  5. This will include providing your tax file number, given name, surname and date of birth.
  6. Enter information carefully and accurately so that it will match your details held by the ATO.
  7. If your details have changed since you last dealt with the ATO, you will need to update them before you can complete the link. Visit gov.au and search for ‘updating your details.’
  8. Read and agree to the terms and conditions and select ‘Next.’
  9. You will also need to answer two questions – specific to you – from information contained in:
    • a notice of assessment received in the last five years
    • a PAYG payment summary received in the last two years
    • a super account statement from the last five years
    • a dividends statement from the last two years
    • a Centrelink payment summary from the last two years
    • or, your bank account details. If you choose to use your bank account to confirm your identity, it must be an account you had your individual income tax refund paid into last year, or one that has earned interest in the last two years.

Be sure to have this information at hand.

If you are a first time lodger, you will need to call ATO call centre to get a unique linking code to help you complete this process.

If you receive an error message at any time, take note of the error code and follow the link provided in the error message for more information.

Once you’ve finished answering these questions, you’re done.

You have successfully linked your myGov account to your ATO record.

And that’s it. You can now manage your tax and super affairs online in ATO online.

 

CLICK HERE TO LEARN HOW TO ACCESS YOUR INCOME STATEMENT VIA myGov

 

 

Cashflow Levers | PRICING

PRICING IS YOUR BIGGEST LEVER

There is no other activity that has the most significant impact on your cashflow than pricing does.

An increase in price has the most significant impact on profit, as every dollar goes straight to your bottom line. The price will always have an effect that is 2 or 3 times higher than any driver.

With so much focus on increasing revenue and reducing costs, people often avoid the dreaded thought of increasing their price. We live in a world where we fear raising our prices because we think we will lose customers/clients.

Increasing your price goes hand in hand with showing additional value.

People pay a premium when they value your service, but more importantly, you need to be confident that your price point is set to attract a particular type of client.

I recently reached out to a social media company about their service. They came across like someone I wanted to work with, and when they asked me what my budget was, they pretty much said you’re not our ideal client, and you would be better off working with another company that supports your type of business. Some might be put off with that response, but because I have an appreciation for pricing and working with the right companies, I was impressed with their position and confidence in who they wanted to work with.

All too often, we get caught up in the notion that we need to serve everyone. There is no better time than now to zero in on what you want and what you are willing to give your customers for that price point.

Let’s say that your current margin is 20%. If you raise your prices by only 2% across the board, you may potentially lose 9% of your sales and still be ahead. What if you didn’t lose 9% of your sales by showing additional value to your product/service to counteract the mindset change of another price increase?

Pricing is irrational. We are always trying to put ourselves in the customer’s shoe and start to stress will they pay for that? Believe it or not, this isn’t the way it works.

Everyone makes emotional purchasing decisions when they are sold on the value and then realise the price (yes, me included).

If you would like to see the impact pricing can have on your business cashflow, feel free to schedule a call with us.

I would love to share the power of pricing with you!

EOFY Planning & Checklist 2020

It’s that time of year again…

At the heart of every business success is good planning.  COVID-19 smacked every business and individual in the face.  The speed at which change was forced upon our world has been nothing short of a shocking nightmare. Even the best of planners couldn’t plan for this.

One thing we do know is that EOFY is around the corner and that we can plan for.

In this edition we look at some of the things business owners need to be addressing with their Bookkeeper or Accountant before 30 June 2020.

Over the next week or so we will be looking at what things you can be doing to prepare for when JobKeeper and Cashflow Stimulus stop – yes that includes budgeting and forecasting (2 of my favourite things).

Please always know that we are only a phone call, email or even zoom meeting away (appointment link below) should you need to talk through some scenarios with us.

 

CHECKLIST

1.  Pay Super Contributions

For the purpose of claiming a tax deduction your superannuation payments for the 2019-2020 year must be received by the super fund on or before 30 June 2020.  If you are using a clearing house that needs to be done by 23 June to allow enough time for funds to be disbursed to the relevant super funds.  Always remember that the maximum super deduction is $25,000 per person.

2.  Write off Bad Debts

While it never seems like good news to write off “bad debts” it’s one way you can offset your taxable income especially if you’re still chasing invoices from last financial year.  So review your current debtors list and if there are any of those invoices that you believe won’t pay by 30th June then write these off. You must be able to show that you have attempted to collect these invoices.

3.  Stock take Count

In addition to meeting your tax obligations, doing a stocktake at the end of the financial year means you gain a better understanding of your stock levels and whether you should write off any damaged or obsolete items.  You may also decided that you want turn that stock into quick cash and sell them at a reduced price.  The purpose of stock take is to help you make legitimate tax deductions when they are warranted.

4.  Take Advantage of the Instant Asset Write-Off

The instant asset write-off scheme is one of the best tax breaks for businesses to claim an immediate tax deduction.  From 12 March 2020 the government increased the instant asset write-off from $30,000 to $150,000 per asset.  While this scheme will reduce the tax your business has to pay, it is not a rebate.  Your cashflow will still have to be able to support any outright purchases.
To claim the deduction the asset must be used or installed by 30 June 2020. Note, that the immediate deduction for a car cannot exceed the cost limit of $57,581.

5.  Claim ALL Deductions

Business owners sometimes purchase work related expenses on personal credit cards or cash.  Now is the time to sort through your personal accounts and find those transactions.  Proof of purchase will be required to support the claim.  Do not assume because you paid for it personally that you cannot claim it through the business.

6.  Take Up Any Deferred Revenue

Deferred revenue is common with subscription based businesses that are invoiced 12 months in advance. In some cases you may have invoiced for part of a job that hasn’t been completed or delivered.  In these scenarios you should look to adjust your revenue by the income amount that hasn’t been earned yet to offset your taxable income.

7.  Prepay Expenses

Whilst most businesses have been impacted by COVID-19 they may not have surplus cash to prepay any expenses.  The most typical ones that come to mind are rent, insurances and professional fees.  Some companies like to prepay to get the tax deduction upfront.  Prepayment rules apply to small business entities so you should therefore always check with your Accountant on your eligibility.

 

CONTACT US

We welcome your questions and queries and would encourage that you schedule a time with us to review your accounts.

Secondly if your Tax Accountant hasn’t contacted you for some tax planning advice, we encourage you to contact them.

No one wants to pay more tax than they need to :)

(click here) APPOINTMENT 

JobKeeper Steps & Guidelines

How do I ENROL for the JobKeeper payment?

As the business owner you can enrol and apply for the JobKeeper (JK) payment from 20 April 2020.

The steps you need to follow:

1.  Check you and your employees meet the eligibility requirements

2.  Continue to pay at least $1,500 to each eligible employee per ATO JK fortnight (the first JK fortnight is the period from 30 March to 12 April)

3.  Notify your eligible employees that you are intending to claim the JK payment on their behalf and check they aren’t claiming JK payment through another employer or have nominated through another business

4.  Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one

5.  From 20 April 2020, you can enrol with the ATO for the JK payment using the Business Portal and authenticate with myGovID. (if doing yourself) otherwise your Tax/BAS Agent can do this for you via the ATO Services Portal. This needs to be submitted by the end of April to claim JK payments for April

6.  In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader

7.  Specify the estimated number of employees who will be eligible for the first JK fortnight (30 March – 12 April) and the second JK fortnight (13 April – 26 April).

How do I APPLY for JobKeeper payment?

You can apply for the JK payment from 4 May 2020.

The steps you need to follow are:

1.  Apply to claim the JK payment by logging on to the ATO Business Portal (if doing yourself) otherwise your Tax/BAS Agent can do this for you via the ATO Services Portal

2.  Ensure you have paid each eligible employee a minimum of $1,500 per JK fortnight before tax.

3.  Identify your eligible employees in the application form by:

  • selecting employee details that are prefilled from your STP pay reports if
  • using a registered tax agent who will submit a report on your behalf through Online services for agents.

4.  Submit the confirmation of your eligible employees online and wait for your confirmation email or SMS showing it has been received.

5.  Notify your eligible employees you have nominated them

6.  ATO will pay you the JK payment for all eligible employees after receiving your application

7. Each month, you will need to reconfirm that your reported eligible employees have not changed to continue payment.

8.  If your eligible employees change or leave your employment, you will need to notify ATO through your monthly JK Declaration report.

You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report

What do you need to do for your employees?

You need to identify which employees you intend to claim the JK payment for and tell them you intend to claim the JK payment for them.

You need to provide these employees with the JobKeeper employee nomination notice and ask them to return it to you by the end of April if you want to claim JobKeeper payment for April.

If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they cannot nominate you. They cannot receive the JK payment from more than one employer.

If an employee is currently receiving an income support payment, they must notify Services AustraliaExternal Link of their new income to avoid incurring a debt that they will have to repay.

 

Example Of Decline In Turnover Test

Entity Name: ______________
Assessment Date: __________

Test provided for in the Rules

(A) Actual GST turnover for __________ (month/quarter)                  $XXX
(B) Compared turnover in ____________  (same period in 2019)      $XXX

(C) Shortfall of A deducted from B =                                                    $XXX
Shortfall percentage for the entity is C / B = % XXX%

If Shortfall % is more than 30% (or 50% if turnover more than $1billion) the entity is qualified for the JobKeeper Scheme. Note ACNC registered Charities shortfall only needs to exceed 15%

ATO have advised: To work out your fall in turnover, you can compare either:

• GST turnover for March 2020 with GST turnover for March 2019
• projected GST turnover for April 2020 with GST turnover for April 2019
• projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.

Therefore use the above table for one of the alternate testing methods Indicate whether the entity passes the decline in turnover test                          Yes / No

Alternative Tests:
If shortfall % is less than 30% then alternative tests may apply:
Part information on alternative test has been provided by the ATO, however further information is outstanding.
“Other circumstances” yet to be determined by the ATO.

Retailers welcome national tenancy framework

Today The National Retail Association NRA welcomed the announcement by the Prime Minister, saying the National Tenancy Framework strikes a sensible balance between the interests of tenants and landlords and would maximise the chances of small business survival.

Under the framework, businesses suffering a major downturn as a result of COVID-19 will be eligible to have their rents reduced by the same proportion as their revenue has fallen.  This rental reduction will be a combination of at least 50 per cent rent waiver and a rent deferral.

Businesses will have a minimum of 12 months after the downturn to pay the deferred rent. The Prime Minister also urged financiers to support property owners who would be affected by the new rules.

NRA Chief Executive Officer Dominique Lamb said while she had not yet had time to fully review the code, the changes described by the Prime Minister would help ensure the economic pain was not focused solely on small retail businesses.

Ms Lamb also welcomed Scott Morrison’s call for banks to support shopping centre owners through the crisis.

“There are no simple answers to these challenges, and all players in the business tenancy space will need to rely on each other to make it through,” Ms Lamb said.

“The model announced by the Prime Minister today is sensible and proportionate. It will ensure – to the greatest degree possible – that businesses who suffer a major downturn have the best chance of surviving.

“And that is good for both tenants and landlords. Just as we want to see businesses survive to keep employing their staff, property owners will also want to see the retail sector survive.

“Thousands of vacant stores at shopping centres across the nation will be of no use to landlords when we get to the other side of this crisis.

“Occupied stores with functioning businesses will be the key to recovery for all players in the sector.  That’s why we believe this package has struck the right balance.”


COVID-19 JobKeeper Payment – Announcement

Prime Minister Scott Morrison yesterday announced a $130 billion economic stimulus package to help keep Australians in jobs – the third and largest economic stimulus package yet.

With the JobKeeper payment, businesses will receive a fortnightly wage subsidy of $1,500 per employee for up to 6 months. The payment is designed to keep people in work and support employers to maintain their connection to their employees.

These connections will enable your business to reactivate your operations quickly without having to rehire staff when the crisis is over.

* The JobKeeper payment is still subject to legislation

Who Is an Eligible Employer?

  • 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)
  • 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)
  • Business who is not subject to the Major Bank Levy.

Are Sole Traders Eligible?

  • Soletraders and the self-employed with an ABN and Not For Profits (including charities) that meet the turnover tests are eligble for the JobKeeper payment.
  • They will need to provide an ABN for their business and nominate an individual to receive the payment together with their Tax File Number.
  • They will also have to make a declaration as to their recent business activity.
  • It is still unclear at this stage what conditions will need to be satisfied.
  • Payments will be made to the individuals bank account.

Who Is an Eligible Employee?

  • A person employed by the relevent employer at 1 March 2020
  • Are currently still employed by the employer (including those who have been stood down or re-hired)
  • Are full-time, part-time or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March 2020)
  • Are at least 16 years of age
  • 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

How is the Payment Calculated?

  • The ATO will administer this program and will make the $1,500 payments based on payroll information that is submitted via Single Touch Payroll.
  • 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 first payment will be made in the first week of May.

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 is the Payment Provided?

  • Eligible employers will receive $1,500 per fortnight per employee and pay this to the employee before tax.
  • The employer must pay superannuation at 9.5% ( SGC ) on this amount unless the employee was earning less than the $1,500 per fortnight. In that case you are only required to pay SGC on the employees actual pay that you were paying them.

How Do You Register for JobKeeper?

In order to make a claim you must elect to be in the scheme by registering with the ATO and currently you can register your interest here https://www.ato.gov.au/general/gen/JobKeeper-payment/

You will need to elect to participate in the scheme by demonstrating the downturn in your business and report the number of eligible employees on a monthly basis.

Example | Employer with Stood Down Employees

  • Zoe runs a beauty salon in Sydney.
  • She employs 3 permanent part-time beauticians.
  • She has been forced to stand down her 3 beauticians without pay.
  • Zoe’s turnover will decline by more than 30 per cent, so she is eligible to apply for the JobKeeper Payment for each employee and pass on $1,500 per fortnight before tax to each of her 3 beauticians for up to six months.
  • Zoe will maintain the connection to her employees and be in a position  to quickly resume her operations.
  • Zoe is required to advise her employees that she has nominated them as eligible employees to receive the payment.
  • It is up to Zoe whether she wants to pay superannuation on the additional income paid because of the JobKeeper Payment.
  • If Zoe’s employees have already started receiving income support payments like the JobSeeker Payment when they receive the JobKeeper Payment, they will need to advise Services Australia of their new income.

Example | Employer with Employees Still Working

  • Andrew owns a real estate business with 2 employees.
  • The business is still operating at this stage but Andrew expects that turnover will decline by more than 30 per cent in in the coming months.
  • The employees are:
    • Anne – permanent full-time salary of $3,000 per fortnight before tax and continues working for the business
    • Nick – permanent part-time salary of $1,000 per fortnight before tax and continues working for the business.
  • Andrew 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 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 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.
  • Andrew 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, Andrew is required to advise his employees that he has nominated them as eligible employees to receive the payment.
  • Andrew will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.

 

Helpful Links

The below links are issued by Treasury:

Information for Employees
Information for Employers
Support for Soletraders

 

We Are Here to Help You

Whilst there are still many unknowns how this stimulus will work we are making sure that we are contstantly kept up to date with all changes.  If you have any queries or would like to book some time to discuss the impact on your business please use the Booking Appointment button and select JobKeeper 30 min appointment.

Booking Appointment

Coronavirus (COVID-19) – Economic Stimulus Package Update

We are here to help you

Yesterday the government announced further measures to assist small business. These additional amounts will help many businesses to keep their doors opened.

If you have any questions or comments, please speak to us or your accountant.

Below is a summary of those changes.

1.  BUSINESS INVESTMENT 

The following measures are designed to assist Australian businesses and economic growth in the short term:

INCREASING THE INSTANT ASSET WRITE-OFF (No Change)

  • Threshold increased from $30,000 to $150,000
  • Applies to businesses with aggregated turnover of less than $500 million
  • Applies from today’s announcement to 30 June 2020
  • The $150,000 threshold applies on a per asset basis so eligible businesses can immediately write-off multiple assets
  • Applies for new or second-hand assets first used or installed ready for use by 30 June 2020.

We recommend that you please consider the cashflow implications of the purchase.  The increase to the instant asset write off DOES NOT mean that you will receive a tax refund, but rather that your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year.  Please contact your accountant or us to discuss the cashflow implications further

INVESTMENT INCENTIVE (No Change)

  • A deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost
  • Applies to businesses with aggregated turnover below $500 million
  • Eligible assets are new assets that can be depreciated under Division 40 of the ITAA97 (i.e. plant, equipment and specified intangible assets) acquired after today’s announcement and first used or installed by 30 June 2021 (NOTE: This measure does not apply to second-hand Division 40 assets or capital works subject to Division 43).

NOTE: the announcement did not reference the removal of the depreciation limit for cars.

We recommend that prior to purchasing assets that may be deductible under this measure, that you contact your Accountant and seek their specific advice, to ensure your business, and the asset being purchased is eligible for the measure.  Further information can be found here.

2.  CASHFLOW ASSISTANCE FOR BUSINESS 

The following measures are designed to support employers, employees and improve business confidence:

BOOSTING CASHFLOW FOR EMPLOYERS (Updated also now includes Not for Profit)

  • For those of you with employees you will be entitled to a rebate equal to 100% of your PAYG Withholding from 1st January to 30 June 2020, up to a maximum of $50,000. (This has increased from 50% of the withholding and a maximum of $25,000 which was announced last week)
    • Example: If you withhold $15,000 a month from your employees wages in PAYG you will receive a $15,000 rebate each month, until you reach the $50,000 threshold.
  • The minimum payment will increase from $2,000 to $10,000
    • Example: If you employ someone and you don’t have to withhold tax on their wages you will still receive $10,000.
  • This will be paid to you once the March BAS and June BAS have been lodged. For those of you who pay PAYG Withholding monthly the ATO will give you 3 times the March Withholding amount to ensure you are on a level playing field, then the rest in each BAS to the end of June.
  • On top of this an extension has also been applied from 1st July to 31st October. This extension means you will receive the same rebate again as you received between January – June. That means an additional $10,000 as a minimum up to $50,000 depending on how much you were eligible for previously.
  • Again, there will be no action required by our clients who are eligible to access this measure. It’s important to note that the payment will not be made until after your BAS has been lodged and will only be made to you if your ATO account is in Credit. That is, if you owe the ATO money this will come off your existing debt.
  • You don’t need to ‘register’ for this, it will automatically happen as part of your BAS. We will of course calculate and let you know how much this will be in April when we are preparing the March Quarter BAS.

SUPPORTING APPRENTICES AND TRAINEES (No Change)

  • 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 (and this subsidy will be available to a new employer where the business is unable to retain an apprentice)
  • Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter)
  • Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being 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 provider.

If you need assistance with your apprentices, please reach out to us for assistance and we can work with you to ensure you are correctly registered and able to claim for this measure.

 

3.  ASSISTANCE FOR AFFECTED REGIONS

Funds will be available to assist during the next few months and over the year ahead to ensure these communities are well placed to recover:

SUPPORT FOR CORONAVIRUS-AFFECTED REGIONS AND COMMUNITIES (No Change)

  • An initial $1 billion allocation to support regions and communities disproportionately affected by the economic impacts of the Coronavirus (e.g. tourism, agriculture, education) that will be provided through existing or newly established Government programs
  • The Minister for Trade, Tourism and Investment will work with affected industries and communities to develop recovery plans and measures.

ATO ADMINISTRATIVE RELIEF (No Change)

  • The ATO will provide administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis

The ATO will setup a temporary shopfront in Cairns within the next few weeks with a dedicated staff specialising in assisting small business (and will consider presence in other regions as well).

 

4.  STIMULUS PAYMENTS TO HOUSEHOLDS 

This measure is designed to assist around 6.5 million lower income Australians, including pensioners and social, security and veteran income support recipients:

  • The Government will provide a one-off $750 payment (with one payment per recipient)
  • The payment will be tax-exempt and will not count as income or Social Security, Farm Household Allowance and Veteran Payments
  • Eligible recipients are those residing in Australia and be receiving a payment specified by the Government (such as the Age Pension, Carer Payment, Newstart Allowance, etc) or hold a concession card on 12 March 2020

The one-off payment will be paid automatically from 31 March 2020 by Services Australia or Veterans’ Affairs.

JOB SEEKERS (New)

  • Jobseeker allowance has been doubled, will be called the coronavirus supplement
  • The government will waive the asset test and waiting period for the jobseeker allowance
  • The supplement will provide an additional $550 a fortnight on top of the existing jobseeker or new start payment and will be available to sole traders and casual workers who meet the income test.
  • Anyone eligible for the maximum jobseeker payment will now receive more than $1100 a fortnight.

INDIVIDUALS (New)

  • From July, a further $750 payment will be made to those on income support that are not eligible for the coronavirus supplement.
  • From April, those affected will gain access to superannuation that is tax-free and capped at $10,000 this financial year and a further $10,000 next financial year
  • Sole traders or casual workers who have seen income or hours reduced by 20 per cent or more as a result of the coronavirus will be able to get early access to their superannuation.
  • Applications can be made online through your Mygov account.

5.  TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES

  • Temporary relief for directors from all personal liability for trading whilst insolvent.
  • Threshold increase in the threshold at which creditors can issue a statutory demand as well as the threshold for a creditor to initiate bankruptcy proceedings (ATO will also tailor their solutions on reducing payments/deferrals or withholding enforcement actions including Director Penalty Notices and wind-ups.  Further information can be found here

6.  PAYROLL TAX RELIEF

There are a range of Payroll Tax Concessions in each state.

NSW

  • No Payroll Tax to be paid for March, April or May
  • When your annual reconciliation is lodged in July you will get an exemption of 25% of your total payroll liability for the year (note this includes the wages you paid in March – June)

VIC

  • For those with Annual Payroll of up to $3million this year NO PAYROLL TAX. If you have already paid during the year you will receive a refund.

QLD

  • Deferral of lodgement date until 3rd August for each month from now on. Note you still have to pay, just not until August.

WA

  • One off grants are available for employers with Australian wages between $1million and $4million. Grant total is $17,500

 

Coronavirus (COVID-19): Helping You Manage Your Business

This week the government announced a number of administrative measures for businesses experiencing financial difficulty in addition to the economic stimulus package announced last week.

Today The Australian Banking Association announced a small business relief package which will allow small businesses to defer any business loans by 6 months.

You can read here for more information. However as we get more information on what this means to you we will let you know directly.
https://www.ausbanking.org.au/banks-small-business-relief-package/

It’s important for all businesses to start assessing their financial situation. The next few months will be very challenging for businesses of any size, yet alone small or medium sized businesses. The All That Counts team are here during these difficult times to support you and your business.

As a business owner, there’s once key thing you need to totally focus on now – keeping your business alive during these difficult times. Planning and action now will be so important for the survival of your business.

As the business owner you need to fully understand your cashflow.  While cashflow is under control then so is your business.

It’s now time for all of humanity to come together and our part in doing this is to give you the additional help and support you require from us.

We are a phone call or zoom video away – please click on our booking link to arrange a time.

Stay safe!  We are in this together :)

Lielette Calleja

KEY AREAS YOU NEED TO CONSIDER:

1. Prepare a Cash Flow Forecast for 12 Months

Meet with your accountant or bookkeeper to create or update your business cash flow plan over the coming months.  You need to understand your daily and weekly planned cash position to make informed decisions.

2. Consider Delaying Tax Payments to the ATO

Keeping your business alive means paying your employees, your key suppliers and your rent.  Nothing else matters over the short term.
You may need to delay making payments of GST, PAYG Withholding to the ATO or arrange a payment plan that is manageable.

Important: It’s vital that you keep lodging your Business Activity Statements (BAS’s) and Instalment Activity Statements (IAS’s) by their due dates and negotiate a delayed payment with the ATO, otherwise the ATO may view the PAYG withholding portion as non-compliant and you will then lose you tax deduction for these amounts.

3.  Arrange Additional Bank Funding

Contact your Bank Manager ASAP and arrange for additional bank funding / lines of credit that can be approved NOW for use in an emergency. Making these arrangements early before things have gone bad is the key. Bank approvals may take up to one month or longer, so start the process today.

4.  Consider Alternative Funding Arrangements

Consider using alternative funders such as Moula or Prospa to set up a short-term line of credit now to pay for inventory and operating costs. These funders lend based on the cash flow of your business and don’t need property security. You should consider doing this as a backup now to any other bank lending arrangements you may have.

5.  Protect Your Personal Assets

Now is the time to upgrade / update your asset protection. Consider if you need to protect the equity in your Family Home or other assets in personal names with a “Gift and Loan Back arrangement” – with no stamp duty or Capital Gains Tax consequences.

6.  Employee Policies

While all your employees want to keep receiving their full salaries and wages, if your business runs out of cash then they no longer have their jobs. Everyone is suffering and tightening up in the short term, so we all have to work together.

  • Do you have to reduce working hours of some employees?
  • Decide if you should offer unpaid leave to your employees. Some businesses are suggesting that employees take unpaid leave on a roster basis.
  • Decide on how to inform employees of you need to stand them down for the short term.

7. Insurance

Review your general insurance policies for any Business Interruption Insurance inclusions. Now is the time to contact your insurance agent to review your policy to understand precisely what you are and are not covered for in the event of an extended incident.

8.  Review ATO Tax Relief Options

The Australia Taxation Office (ATO) is implementing a series of relief options to assist those impacted by the coronavirus. The relief will not be automatically applied.
You or your Accountant/Bookkeeper will need to contact the ATO to make any of the following requests for assistance.

  • Businesses can call the ATO’s Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances.
  • Individuals and businesses can request deferral of some payments (by up to 4 months) and vary instalments.
  • Businesses (under $20 million turnover) can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months.
  • Quarterly payers can vary their PAYG instalments for the March 2020 quarter, and claim a refund of instalments paid for the Sep and Dec 2019 quarters.
  • Businesses can request remittance of interest and penalties applied to tax liabilities incurred after 23 January 2020.
  • Businesses can request a low interest payment plan.
  • Employers still need to meet their SG obligations. The ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late/unpaid.

 

TIPS TO IMPROVE YOUR CASH INFLOWS

Outstanding Accounts Receivable

Double down on verifying outstanding invoices with customers, so you know there is no realistic reason for a customer to dispute or delay payment when the time comes.

Confirm Expected Receipt Dates

Confirm the date that your customer has in their payable schedule for paying your invoices. You can then send reminders to see if the payment arrives on time, and if not you have an alarm bell to be proactive in following up your cash flow.

Chase Up Late Payments FAST

Don’t be complacent in chasing late payments. You need to set a standard with your customers of what is expected. It’s proven that setting the expectation means you will be paid quicker than the other suppliers who are not chasing up on this.

Sell Unused Equipment

Be realistic about what equipment you need in your business. Decide if you can sell any underutilised or obsolete equipment so as to create your cash “war chest”.

TIPS TO IMPROVE YOUR CASH OUTFLOWS

Fixed Term Contracts

Discuss these with Suppliers and ask if they can be reduced or cancelled. Don’t assume that suppliers won’t work with you. You paying a supplier a smaller payment will be better for them than receiving no payment if your business closes.

Supplier Terms

Discuss terms with your suppliers to see if you can extend your terms, have a cash reserve request or get a discount from your suppliers if you pay early.

Reduce Costs

Reduce costs where possible. Many businesses have extras that in the good times seem to be needed (eg. lunches, training courses). Be critical and if there is an expense that will not put you at risk or reduce productivity at this time, then think seriously about cutting it.

Loan & Lease Repayments

Most banks have hardship teams offering a range of services that may be of support. For more information, or to find the number for your bank’s hardship team go to https://www.ausbanking.org.au/campaigns/financial-hardship/

Coronavirus (COVID-19) – Economic Stimulus Package Announcement

On 12 March 2020, the Federal Government announced that it will take new measures to help boost the economy and save jobs.  The stimulus package worth nearly $18 billion will benefit businesses and individuals.

Below is a summary of the key measures outlined and what they could mean for you.  Please reach out to us or your accountant if you want to know how these measures affect you.

Full details of the assistance can be found here.

  1. BUSINESS INVESTMENT

The following measures are designed to assist Australian businesses and economic growth in the short term:

INCREASING THE INSTANT ASSET WRITE-OFF

  • Threshold increased from $30,000 to $150,000
  • Applies to businesses with aggregated turnover of less than $500 million
  • Applies from today’s announcement to 30 June 2020
  • The $150,000 threshold applies on a per asset basis so eligible businesses can immediately write-off multiple assets
  • Applies for new or second-hand assets first used or installed ready for use by 30 June 2020.

We recommend that you please consider the cashflow implications of the purchase.  The increase to the instant asset write off DOES NOT mean that you will receive a tax refund, but rather that your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year.  Please contact your accountant or us to discuss the cashflow implications further

 

INVESTMENT INCENTIVE

  • A deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost
  • Applies to businesses with aggregated turnover below $500 million
  • Eligible assets are new assets that can be depreciated under Division 40 of the ITAA97 (i.e. plant, equipment and specified intangible assets) acquired after today’s announcement and first used or installed by 30 June 2021 (NOTE: This measure does not apply to second-hand Division 40 assets or capital works subject to Division 43).

NOTE: the announcement did not reference the removal of the depreciation limit for cars.

We recommend that prior to purchasing assets that may be deductible under this measure, that you contact your Accountant and seek their specific advice, to ensure your business, and the asset being purchased is eligible for the measure.

 

  1. CASHFLOW ASSISTANCE FOR BUSINESS

The following measures are designed to support employers, employees and improve business confidence:

BOOSTING CASHFLOW FOR EMPLOYERS

  • Will provide a tax-free payment up to $25,000 back to business, with a minimum payment of $2,000 for eligible businesses
  • Eligible businesses are those SME’s with aggregated annual turnover under $50 million (generally the prior year turnover)
    • The payment will be delivered by the ATO as a credit in the activity statement from 28 April 2020 when the business lodges its activity statement
    • Eligible businesses that withhold tax on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000
    • Eligible businesses that pay salary and wages will receive a minimum payment of $2,000 even where they are not required to withhold.
    • Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020
    • Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements (with the payment calculated at 3 times the rate i.e. 50 per cent in the March 2020 activity statement).

There will be no action required by our clients who are eligible to access this measure – it will be dealt with automatically upon lodgement of activity statements.  The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements (with the minimum payment applied to the first lodgement)

SUPPORTING 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 (and this subsidy will be available to a new employer where the business is unable to retain an apprentice)
  • Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter)
  • Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being 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 provider.

If you need assistance with your apprentices, please reach out to us for assistance and we can work with you to ensure you are correctly registered and able to claim for this measure.

 

  1. ASSISTANCE FOR AFFECTED REGIONS

Funds will be available to assist during the next few months and over the year ahead to ensure these communities are well placed to recover:

SUPPORT FOR CORONAVIRUS-AFFECTED REGIONS AND COMMUNITIES

  • An initial $1 billion allocation to support regions and communities disproportionately affected by the economic impacts of the Coronavirus (e.g. tourism, agriculture, education) that will be provided through existing or newly established Government programs
  • The Minister for Trade, Tourism and Investment will work with affected industries and communities to develop recovery plans and measures.

ATO ADMINISTRATIVE RELIEF

  • The ATO will provide administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis

The ATO will setup a temporary shopfront in Cairns within the next few weeks with a dedicated staff specialising in assisting small business (and will consider presence in other regions as well).

 

  1. STIMULUS PAYMENTS TO HOUSEHOLDS

This measure is designed to assist around 6.5 million lower income Australians, including pensioners and social, security and veteran income support recipients:

  • The Government will provide a one-off $750 payment (with one payment per recipient)
  • The payment will be tax-exempt and will not count as income or Social Security, Farm Household Allowance and Veteran Payments
  • Eligible recipients are those residing in Australia and be receiving a payment specified by the Government (such as the Age Pension, Carer Payment, Newstart Allowance, etc) or hold a concession card on 12 March 2020

The one-off payment will be paid automatically from 31 March 2020 by Services Australia or Veterans’ Affairs.

 

Our commitment to you

 

As a client of All That Counts you know that we have been big supporters of cloud technology to run our business and support yours.  Leveraging technology means that it’s business as usual.

Our strategy is to continue to support and assist all our clients in this manner.  We expect that any interruption to our business operations would only be triggered if one of our staff became unwell.  In this situation, we have staff capacity to ensure that work can be undertaken by another member of our team, and that there is no disruption to our client deliverables.

We would encourage the use of video meetings like Zoom to ensure we are able to provide you the additional support you may need. All our staff will be available via Zoom video conferencing.

The next few months are going to be challenging for businesses and individuals in Australia, and across the globe.  If you have any questions about any of the above please contact us.