Mandatory Code for Commercial Tenancies – released 7 April 2020 (COVID-19 response)

The National Cabinet announced a Mandatory Code of Conduct for SME Commercial Leasing Principles during COVID-19 on 3 April 2020 and released the code on 7 April 2020.

The mandatory code for Commercial tenancies will be legislated and regulated as appropriate in each state and territory jurisdiction.

It will apply to tenancies where the tenant or landlord is eligible for the JobKeeper Program (essentially a tenant or a landlord who are in a position of distress), where they have a turnover of $50 million or less.

The code is designed to support those small and medium-sized enterprises, be they a tenant or a landlord.

The code brings together a set of good-faith leasing principles.

• Landlords must not terminate the lease or draw on a tenant's security.

• Likewise, tenants must honour the lease.

• Landlords will be required to reduce rent proportionately to the trading reduction in the tenant's business, through a combination - over the course of the pandemic period - of a combination of waivers of rent and deferrals of rent.

• Waivers of rent must account for 50 per cent at least, of the reduction in the rental provided to the tenant during that period and deferrals must be covered over the balance of the lease term and in no less a period than 12 months. So, if the lease term goes for three years, the rental deferral is amortised over that three year period, after the end of the pandemic period. But if the lease only has another six months to run, the tenant would have a minimum of 12 months after the pandemic period in order to catch up on the deferrals of the rental payments.

• The arrangements will be overseen through a binding mediation process.

• All of this will be run by the states and the territories and will be regulated & legislated in each state and jurisdiction.

See the National Cabinet Mandatory Code of Conduct - SME Commercial Leasing Principles during COVID-19 here

Should you need advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions, on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Working from home deduction - new shortcut method

Due to COVID-19 the government has made it easier for people to claim deductions for working from home.

This will allow people to claim 80 cents per hour for all running expenses, rather than calculating specific running expenses.

The additional running expenses included in the revised working from home shortcut method covers:

• Electricity expenses related to heating and cooling the area you are using for work

• Cleaning costs for your dedicated work area

• Internet and phone expenses

• Computer consumables eg ink, paper and printer as well as stationery

• Home office equipment, including computer, printers, phones furniture and furnishings – you can claim either the full cost of items up to $300 or decline in value for items over $300.

A couple living together and both working from home can individually claim 80 cents per hour.

You also don’t need to have a dedicated working from home area.

All you need to do is keep a record of the hours you worked from home as evidence for your claim.

Importantly this shortcut arrangement doesn’t prohibit people using the existing method.

However if you use the shortcut method to claim a deduction for your additional running expenses, you cannot claim a further deduction for any of the expenses listed above.

Claims for working from home expenses prior to 1 March 2020 cannot use the shortcut method and must meet the pre-existing working from home approach and requirements.

This will be reviewed by the ATO for the next financial year, as the COVID-19 situation progresses.

More information is available at the ATO website here

Should you need advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions, on 02 9899 4730 or via the contact page at www.ias-ca.com.au

JobKeeper Payment

The JobKeeper Payment Program is a Federal Government Wage Subsidy program to assist Businesses that have been economically affected by the Coronavirus to retain staff. It was announced Monday 30 March 2020 and legislation was passed on 8 April 2020.

Summary of Program

• Government will provide $1,500 per fortnight per employee for up to 6 months

• Employers must elect to participate through an application with the ATO and provide supporting documentation demonstrating a downturn in their business.

• Employers need to report the number of eligible employees employed by the business on a monthly basis.

• Eligible Employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer, including full time, part time, and long term casuals (that have been with the employer regularly for at least 12 months as at 1 March 2020). It also applies to employees who have been stood down since 1 March.

• 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.

• 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.

• Payments will be made to the employer monthly in arrears by the ATO. 

More information is available in this summary Fact Sheet or via the Treasury website here. A series of Frequently Asked Questions has also been addressed and can be accessed here

Eligibility for Employers

• their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or

• their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and

• the business is not subject to the Major Bank Levy.

Eligible employees

An employee must be an Australian citizen, the holder of a permanent visa, 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.

Self-employed Individuals

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered, or expect to suffer, a 30 per cent decline in turnover relative to a comparable prior period (of at least a month). 

Timing

The subsidy will start on 30 March 2020, with the first payments expected to be received by employers from 4 May onwards. Businesses can register their interest in participating in the Payment on the ATO website via this link and from 20 April 2020, will be able to formally Enrol and Apply via this page.

Importantly, you will need to enrol by the end of April to be eligible for April payments.

There will then be ongoing reporting from 4 May to confirm eligible employees. More information is included below from the ATO website.

Should you need advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

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DETAILED INFORMATION COURTESY OF THE ATO JOBKEEPER PAYMENT PAGES IS AS FOLLOWS AND IS ALSO ACCESSIBLE VIA THIS LINK

Enrol for the JobKeeper payment (from 20 April onwards)

You or a registered tax professional can enrol for the JobKeeper payment:

• Step 1 – Register your interest and subscribe for JobKeeper payment updates.

• Step 2 – Check you and your employees meet the eligibility requirements.

• Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).

• Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.

• Step 5 – 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.

• Step 6 – From 20 April 2020, you can enrol with us for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.

• Step 7 – 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.

• Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

Confirmation of eligible employees you will claim JobKeeper Payment for (available from 4 May 2020 onwards)

You or a registered tax agent can apply for the JobKeeper payment for your eligible employees:

• Step 1 – Apply to claim the JobKeeper payment by logging in to the ATO Business Portal

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

• Step 3 – Identify your eligible employees in the application form by

  • selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution, or

  • manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution, or

  • using a registered tax agent who will submit a report on your behalf through Online services for agents.

• Step 4 – Submit the confirmation of your eligible employees online and wait for the confirmation screen.

• Step 5 – Notify your eligible employees you have nominated them.

• Step 6 – We will pay you the JobKeeper payment for all eligible employees after receiving your application.

• Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments from us. 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.

• Step 8 – If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.

If you use the ATO Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid

What do you need to do for your employees

You need to identify which employees you intend to claim the JobKeeper payment for and tell them you intend to claim the JobKeeper 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 JobKeeper payment from more than one employer.

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

Coronavirus update (COVID-19) 23 March 2020 update

Restrictions on Social Gatherings

Yesterday, 22 March, the Federal Government announced further restrictions on social gatherings in response to the COVID-19 outbreak.

In summary the following facilities are restricted from opening from midday local time 23 March 2020:

• Pubs, registered and licenced clubs (excluding bottle shops attached to these venues), hotels (excluding accommodation)

• Gyms and indoor sporting venues 

• Cinemas, entertainment venues, casinos, and night clubs

• Restaurants and cafes will be restricted to takeaway and/or home delivery

• Religious gatherings, places of worship or funerals (in enclosed spaces and other than very small groups and where the 1 person per 4 square metre rule applies).

(Isolated remote community hubs are not included in these restrictions).

Here is a link to The Prime Minister’s press release

This obviously has a massive impact on these businesses and organisations, as well as their associated supply chain. Many will close indefinitely.

The Government has attempted to mitigate the financial impact arising out of these restrictions and the other economic shocks that are occurring with some temporary relief for financially distressed businesses. Those measures are outlined further below.

Second economic response package

Earlier in the day, the Prime Minister and Treasurer announced a second economic response package. Broadly it can be summarised as

• Support for individuals and households

  • Income support for individuals

  • Payments to support households

  • Temporary early release of superannuation

  • Temporarily reducing superannuation minimum drawdown rates

  • Reducing social security deeming rates

• Support for business

  • Boosting cash flow for employers

  • Supporting Apprentices & Trainees

  • Temporary relief for financially distressed businesses

• Support for credit flow

  • Coronavirus SME Guarantee Scheme

  • Supporting the flow and reducing the Cost of Credit – Reserve Bank of Australia (RBA)

  • Quick and efficient access to credit for small business

  • Supporting non-ADI and smaller ADI lenders in the Securitisation market

Detail of the announcement can be found on Treasury page here or via this PDF copy

Banking Relief - Small Business

The Australian Banking Association also announced Small Business Relief measures on 20 March 2020. In short, Australian banks will defer loan repayments for small businesses affected by COVID-19 for six months. The announcement is available via this link or a PDF copy is here

Practically speaking, it appears Banks are set to reach out their customers to offer assistance and packages. However, we suggest getting on the front foot and getting in touch with your bank if have any commercial loans to seek payment reprieve under this relief package, should you believe it is necessary, or in fact prudent given the uncertain environment.

Similarly, this will apply to anyone with a mortgage who is concerned about their ability to meet repayments over the next six months.

Business ideas

One thing that is clear is that there are severe impacts on many businesses and individuals, some more so than other.

For businesses, it is critical to look at your costs & revenue and adjust accordingly, as well as to take advantage of the various assistance packages being offered, just to get through this period.

It is also a time to think outside the square. How can you provide your services differently? Granted very difficult in the situation where the social gathering restrictions have effectively caused your business to close or be extremely curtailed. However, there will also be opportunities, and a great chance to adapt and do things differently in order to survive and most importantly be ready for when the restrictions are lifted and things start to get back to normal.

Most importantly be proactive, think of what you need to do and get onto it. Look for new revenue streams, talk to your bank, take advantage of the ATO payment plans, talk to your suppliers, and make sure you engage your staff both for ideas, and also if you need to vary working arrangements through this period.

We do believe there will be permanent structural changes to the way many businesses operate out of all this also!

Above all, stay well and look after yourself, your loved ones and friends.

Should you need advice or need to discuss your particular requirements, please contact us, Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Government support for Individuals and Households (COVID-19) 23 March 2020

This assistance includes income support payments, payments to support households and temporary early releases of superannuation.

• Income support for individuals

• Payments to support households

• Temporary early release of superannuation

• Temporarily reducing superannuation minimum drawdown rates

• Reducing social security deeming rates

Income support for individuals

Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.

Please see this Fact sheet for more information

Payments to support households

The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Around half of those that benefit are pensioners. This payment will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the Coronavirus supplement.

Please see this Fact sheet for more information

Temporary early release of superannuation

The Government is allowing eligible individuals to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months.

Eligibility

To apply for early release you must satisfy any one or more of the following requirements:

• you are unemployed; or

• you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or

• on or after 1 January 2020:

  • you were made redundant; or

  • your working hours were reduced by 20 per cent or more; or

  • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.

Timing

You will be able to apply for early release of your superannuation from mid-April 2020.

Please see this Fact sheet for more information

Temporarily reducing superannuation minimum drawdown rates

The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21.

This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.

Please see this Fact sheet for more information

Reducing social security deeming rates

On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.

As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. The reductions reflect the low interest rate environment and its impact on the income from savings. The change will benefit around 900,000 income support recipients, including around 565,000 Age Pensioners who will, on average receive around $105 more of the Age Pension in the first full year the reduced rates apply.

Please see this Fact sheet for more information

More information is also available directly at Services Australia, Department of Veteran Affairs and Department of Social Services

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Supporting the Flow of Credit (COVID-19) 23 March 2020

Coronavirus SME Guarantee Scheme

Under the Scheme, the Government will provide a guarantee of 50 per cent to SME lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months. SMEs with a turnover of up to $50 million will be eligible to receive these loans. The Government will provide eligible lenders with a guarantee for loans with the following terms:

• Maximum total size of loans of $250,000 per borrower.

• The loans will be up to three years, with an initial six month repayment holiday.

• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

• Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

Supporting the flow and reducing the Cost of Credit - Reserve Bank of Australia (RBA)

The RBA announced a package on 19 March 2020 that will put downward pressure on borrowing costs for households and businesses.

The RBA is supporting small businesses as a particular priority. It announced a term funding facility for the banking system.

Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25 per cent. This will reinforce the benefits of a low cash rate by reducing funding costs for banks, which in turn will help reduce interest rates for borrowers.

To encourage lending to businesses, the facility offers additional low-cost funding to banks if they expand their business lending, with particular incentives applying to new loans to SMEs.

Quick and efficient access to credit for small business

The Government is providing an exemption from responsible lending obligations for lenders providing credit to existing small business customers.

This exemption is for six months, and applies to any credit for business purposes, including new credit, credit limit increases and credit variations and restructures.

Supporting non-ADI and smaller ADI lenders in the Securitisation market

The Government is providing the Australian Office of Financial Management (AOFM) with $15 billion to invest in structured finance markets used by smaller lenders, including non-Authorised Deposit-Taking Institutions (Non-ADI) and smaller Authorised Deposit-Taking Institutions (ADI).

This support will be provided by making direct investments in primary market securitisations by these lenders and in warehouse facilities.

More information on these measures is available here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Government support for businesses (COVID-19) 22 March 2020 update

Boosting Cash flow for employers

Under this enhanced scheme (update to the initial scheme announced 13 March 2020), employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

Not-for-profit entities (NFPs), including charities, will now also be eligible and will apply to entities with aggregated annual turnover under $50 million that employ workers. Eligibility is based on prior year turnover.

This additional payment continues cash flow support over a longer period, to help employers retain staff and helping entities to keep operating.

The cash flow boost provides a tax free payment to employers and is automatically calculated by the Australian Taxation Office (ATO). There are no new forms required.

Timing of the credits is set out below:

Please note the credits will be applied to the Integrated Client account and if the account is in credit, the refund will then be paid with 14 days.

Supporting Apprentices & 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. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

Timing

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

Further information is available at:

• The Department of Education, Skills and Employment website at www.dese.gov.au

• Australian Apprenticeships website at  www.australianapprenticeships.gov.au

For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

More information on both measures are available here

Temporary relief for financially distressed businesses

 The elements of the package are

• A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive;

• A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition;

• Temporary relief for directors from any personal liability for trading while insolvent; and

• Providing temporary flexibility in the Corporations Act 2001to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

More information on this measure is available here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

RBA Cash rate cut to 0.25% and other Monetary Policy measures 19 March 2020

Yesterday, the Reserve Bank announced a comprehensive series of measures to help the economy fight the Coronavirus economic fallout, as follows:

• Cash rate at 0.25%, down 0.25%.

• A 3-year bond rate targeted at 0.25%.

• Cheap money for the banks to lend to small and medium-sized businesses - The RBA will provide a $90 billion line of credit to banks to lend cheap money to SMEs on top of the $15 billion the Government will provide for smaller banks and non-banks.

• Help banks help the economy with a better-than-expected rate for deposits of banks held at the RBA.

The RBA Governor, Philip Lowe’s full speech is available here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Coronavirus and Australian Workplace Laws (Fair Work Australia)

Fair Work has a webpage dedicated to the Coronavirus and Australian Workplace Laws.

The following list is a summary of the information available via the page:

• Where can I get information on health and safety in the workplace?

• When can employers direct employees to stay away from their usual workplace under workplace health and safety laws?

• What happens if an employee or their family member is sick with coronavirus?

• What if an employee is stuck overseas or is required to be quarantined or to self-isolate?

• What if an employee wants to stay home as a precaution?

• What if an employer wants their employees to stay home as a precaution?

• When can employees work from home?

• What about casual employees and independent contractors?

• What if I cannot attend work because my child’s school is closed due to concerns about the coronavirus?

• What if I need to let employees go or reduce their working hours?

• Can employees be directed not to travel?

A link to the page is included here, or a PDF copy of the page, as at 19 March 2020, can be accessed here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

NSW Government Stimulus Package announced 17 March 2020 in response to the Coronavirus

This package has two key components — $700 million in extra health funding and $1.6 billion in tax cuts to support jobs. 

Key elements of the NSW COVID-19 package include:

Health boost

• $700 million extra funding for NSW Health. This will assist in doubling ICU capacity, preparing for additional COVID-19 testing, purchasing additional ventilators and medical equipment, establishing acute respiratory clinics and bringing forward elective surgeries to private hospitals.

Business support and jobs

• $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20). This means these businesses will save a quarter of their annual payroll tax bill in 2019-20

• $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21

• $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies

• $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings

• more than $250 million to bring forward maintenance on public assets including social housing and crown land fencing

• $500 million to bring forward capital works and maintenance.

More information is available via the NSW Government website here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

ATO support measures to assist those affected by COVID-19

The ATO has announced it will implement a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak.

Options available to assist businesses impacted by COVID-19 include:

• Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise

• Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to

• Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters

• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities

• Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

Taxpayers will need to contact the ATO for assistance. Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on the Emergency Support Infoline 1800 806 218, when they are ready, to discuss their situation.

More information is available at the ATO COVID-19 page

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Federal Government Economic Stimulus COVID-19 package announced – 13 March 2020

The Government announced a $17.6 billion economic stimulus package to support the Australian economy and households while dealing with the significant challenges posed by the spread of the coronavirus, COVID-19.

The package has four parts:

 1. Delivering support for business investment:

• increase the instant asset write off threshold from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020

• providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase. These measures start today and will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees or 3 in every 4 workers. The measures are designed to support business sticking with investment they had planned, and encouraging them to bring investment forward to support economic growth over the short term

2. Cash flow assistance for businesses:

• businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020 will be able to receive a payment from $2,000 up to $25,000. The payment will be tax free and businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.

• eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

3. Stimulus payments to households to support growth:

• provide a one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders.

4. Assistance for severely-affected regions:

• $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

To implement the stimulus plan, a package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament’s urgent consideration and passage.

In addition the Government has committed an additional $2.4 billion to support the health system to manage any further outbreak in Australia. It has also committed to cover 50 per cent of additional hospital costs incurred by states and territories related to the diagnosis and treatment of patients with, or suspected of having, the Coronavirus.

More details are available at the Treasury Coronavirus page, or via PDF copy here

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

ATO Bushfire support

As devastating bushfires continue to burn across large parts of Australia, the ATO acknowledges and understands that tax lodgements are not a priority.

Automatic deferrals are now available for lodgments and payments for bushfire-impacted postcodes.

If your business or residential address is in one of the identified bushfire impacted postcodes on the dedicated Bushfires 2019–20 page you do not need to apply for these deferrals.

The ATO has also automatically fast-tracked refunds if you have one due.

The ATO Bushfire page will be regularly updated with identified impacted postcodes and support available to affected individuals and businesses on an ongoing basis.

If you need further assistance, or you are impacted by the bushfires but are not in an identified postcode, please let us know so we can advise the ATO on your behalf, or call the ATO Emergency Support Infoline on 1800 806 218 for help directly.

The ATO recognises the ongoing effects of this disaster and will continue to assess the impact of the bushfires.

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

ATO keeping a closer eye on CGT

The ATO are paying close attention to capital gains made on property, shares and cryptocurrency, with their data-matching capabilities increasing.

The ATO is reminding taxpayers to keep good records of asset disposals to help work out capital gains or losses correctly. You need to keep records of a CGT event, including for asset disposals, loss or destruction, for at least five years after the event has occurred.

Records of any net capital losses need to be kept from the year they occurred, in order to be able to offset against capital gains in a later year. Once a loss is offset against a capital gain, you should keep the records of the CGT event that resulted in the loss for:
• Two years for individuals and small businesses after the gain has been offset
• Four years after the gain has been offset for other taxpayers

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Recent Law Changes affecting SMSFs

There are two changes affecting SMSF’s which have recently occurred:

Non-Arm’s Length Income (NALI) Changes
The definition of Non-arm's length income (NALI) has been expanded to now apply to non-arm’s length expenditure and outgoings, not just income.
The definition now states that the ordinary or statutory income of a super fund will be NALI and taxed at the top marginal rate where there is a scheme in which the parties are not dealing with each other at arm's length and the fund incurs:
• a loss, outgoing or expenditure (including a nil amount), in gaining or producing the income, that is less than what would be expected had the parties dealt with each other at arm's length in relation to the scheme; or
• a loss, outgoing or expenditure (including a nil amount) to acquire a fixed entitlement to the income of a trust or in gaining or producing the income from a fixed entitlement that is less than would be expected had the parties dealt with each other at arm's length in relation to the scheme.
This is a significant change to encompass expenses and outgoings, not just income with related parties! It applies from the 2018-19 income year onwards.

Total Super Balance Changes
The calculation of an individual’s total superannuation balance will include, in certain circumstances the outstanding Limited recourse borrowing arrangement (LRBA) amount attributable to each member’s interest where the SMSF has an LRBA that was made under a contact entered into on or after 1 July 2018.
This occurs if:
• the LRBA is with an associate of the SMSF
• a member of the fund met a condition of release with a nil cashing restriction
This change doesn’t include the refinancing of an LRBA that was made before 1 July 2018 where both the following apply:
• the new borrowing is secured by the same asset or assets as the old borrowing
• the refinanced amount is the same or less than the existing LRBA.

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

AUSkey is being replaced by myGovID – ACT NOW

MyGovID and Relationship Authorisation Manager (RAM) will be replacing AUSkey at the end of March 2020.

MyGovID is an app that can prove your digital identity from your smart device. RAM is a new Australian Government authorisation service that allows you to authorise who acts on your behalf.

There are a few steps to setup your MyGovID and RAM:

1. Check your ABN details are up to date from the Australian Business Register and your authorised users are correct in the AUSkey Manager.
2. Download the myGovID app onto your smart device and use your identity documents to set up your account.
3. Use your myGovID to login to RAM and link your ABN.
4. When your ABN is linked, you start to set up and manage authorisations. Once you authorise someone, the person will be sent a request via email to act on your behalf.

You should act now to set up the new authorisation service before the deadline.

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Cash rate on hold as economy reaches a “gentle turning point” (December 2019)

At its monthly meeting on Tuesday, the Reserve Bank Board decided to leave the cash rate unchanged at 0.75 per cent. This follows the 3 recent decreases of 0.25% in June, July, and October.

The RBA believes the Australian economy has reached what it has termed a “gentle turning point” and it believes growth will gradually pick up to around 3 per cent in 2021.

The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices and an improved outlook for the resources sector should all support this forecast increase in growth.

The downward pressure on the exchange rate from the lowered cash rate has also supported activity in various industries, and boosted asset prices which, together with lower mortgage rates leaving more disposal income for households, should flow through to increased spending.

In summary the Board will give the previous rate cuts more time to work given the lead time for the reductions to take effect and will continue to monitor developments, including in the labour market. It acknowledges that given global and domestic factors, an extended period of low interest rates will reasonably be required to reach full employment and achieve the inflation target. However, it is prepared to reduce the cash rate further to achieve these goals and support sustained growth.

The full statement supporting the decision by Philip Lowe, Governor of the RBA, can be found here.

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

ATO Disclosure of Business Tax Debts

Legislation has recently been passed, with effect from 28 October 2019, allowing the ATO to disclose tax debt information of businesses to registered credit reporting bureaus (CRBs).

This will only be permissible where certain criteria are met including:

• The business has an Australian business number (ABN), and is not an excluded entity

• it has one or more tax debts, of which at least $100,000 is overdue by more than 90 days

• it is not effectively engaging with the ATO to manage its tax debt, and

• the Inspector-General of Taxation is not considering an ongoing complaint about the proposed reporting of the entity's tax debt information.

The ATO will notify a business in writing if they meet the reporting criteria and give them 28 days to engage with the ATO and take action to avoid having its tax debt information reported.

The ATO does of course have various other methods of enforcing payment of tax debts.

The message however is clear, engage with the ATO if your business is in a situation where it has tax debts and adhere to any negotiated payment arrangements.

Given this new additional compliance tool the ATO has at it’s disposal, and the potential commercial implications for obtaining finance in the future should a debt be reported to a CRB, this only reiterates the imperative need to engage and adhere to arrangements.

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Reserve Bank leaves the cash rate on hold – September 2019

At its monthly meeting yesterday, the Reserve Bank Board decided to leave the cash rate unchanged at 1.00 per cent. This follows the two 0.25% decreases to the cash rate in June and July.

In short, while the global economic outlook remains positive, there are several downside risks to world economic growth including trade and technology disputes. Inflation is subdued with many central banks also decreasing interest rates this year.

Locally, Australia’s inflation rate is below the target band of the Reserve Bank, and is expected to be for some time.  The unemployment rate of 5.2% is higher than preferred despite record increases in employment, which have been due to more supply of labour. Wages growth has also been subdued.

Increased wage growth would be welcome, and there is cautious optimism about the housing market stabilising.

The Board will continue to monitor developments, including in the labour market, and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time

The full statement supporting the decision by Philip Lowe, Governor of the RBA, can be found here https://www.rba.gov.au/media-releases/2019/mr-19-23.html

For more information please contact Infinite Accounting Solutions on 02 9899 4730 or via the contact page at www.ias-ca.com.au

Non-compliant payments to workers no longer tax deductible

Business taxpayers can no longer claim deductions for payments to workers if they have not met their Pay As You Go (PAYG) withholding obligations.

This applies to income tax returns lodged for the 2020 income year onwards.

If PAYG withholding rules require an amount to be withheld, a business must:

• withhold the amount from the payment before they pay their worker

• report that amount to the ATO.

The deduction will not be lost however if you withhold:

• an incorrect amount by mistake (this needs to be rectified though)

• the correct amount but make a mistake when reporting (this should also be rectified)

The deduction will be lost however, if no amount is withheld or reported to the ATO, unless this is voluntarily disclosed to the ATO before they examine your affairs.

Message is clear – do the right thing and comply with the requirements of the PAYG withholding system.

This is part of the government’s response to recommendations from the Black Economy Taskforce with the aim to level the playing field for honest businesses doing the right thing by their workers.

If you require further information on this measure, or anything else, please contact us on 02 9899 4730 or via www.ias-ca.com.au