Small Business Restructuring Changes

On the 1st of January 2021, significant changes were introduced to insolvency law in Australia. The new laws provide for a simplified liquidation process. The new process allows small businesses the flexibility to restructure debts while company directors are still in control of the company, and also for a simplified liquidation process.

To be eligible for the process, the liabilities of the company must not exceed $1 million. Additionally, the company and the companies’ directors must not have been involved in a simplified liquidation process or under restructuring within the last 7 years.

Before the directors of a company consider proposing a restructuring plan to creditors, they should ensure they have substantially complied with the following two requirements:

-          Paid entitlements of employees that are due and payable

-          Supplied all notices, statements, applications and other documents as required by taxation laws

If the company is eligible for the SBR, the directors would pass a resolution to the fact that the company is (or is about to be) insolvent and that a small business restructuring practitioner (RP) should be appointed. For a person to act as an RP they must be registered with ASIC as a Registered Liquidator. The appointment of an RP cannot be revoked, removed or changed by creditors.

The role of an RP includes:

-          Assisting in the preparation of a restructuring plan

-          Making a declaration to the creditors about the plan

-          Help the business comply with laws

-          Provide advice

Once an RP is appointed the changes for creditors include:

-          Cannot begin, continue or enforce claims against the company

-          Court action is adjourned unless they find it is in the creditors interest to wind up the company

-          Cannot exercise property rights without consent of RP

-          Cannot enforce personal guarantees during the proposal process

There are a few rules regarding what must be included in a restructuring plan. The company’s restructuring plan must identify which company property is to be dealt with and how it is to be dealt with, there must also be remuneration for the RP for creating the plan and there must be a specific date at which the plan is to be executed by. The plan is then accompanied by a proposal statement, which is to be signed by the RP, stating that the practitioner believes on reasonable grounds that the company meets the eligibility criteria. The RP needs to make reasonable enquiries into the company’s affairs and take steps to verify information that is given by the directors.

 A restructuring plan must:

-          Last less than three years

-          Treat all creditors equally

-          Allow for only one dividend

Voting on the plan occurs when the RP invites all creditors, except those directly related to the company, to indicate in writing whether or not they would like to accept the plan and whether or not they dispute the debt that is stated in the plan. The period to accept the plan is fifteen business days from the end of the proposal period, although this can be extended if the creditor disputes the assessment of its claim in the proposal statement. Acceptance of the plan occurs if the majority of creditors have accepted the plan by the end of the acceptance period.

This information is of a general nature only. We recommend seeking advice from a qualified insolvency practitioner if you require further information.

Australia's Current Trade Account - December 2020

Australia’s trade surplus increased in December to $6.8bn, a figure that was slightly lower than projected.

The trade surplus increase in the month of December can be attributed to a 2.8% increase in exports, combined with a 2.4% decrease in imports from the previous month.

A large factor in the increase in exports can be attributed to the 3.2% rise in the price of metal ores in December, caused by increased demand from China and weak supply of metal ores from Brazil. These factors have allowed metal ore exports to reach a record high in December, at $13.9bn, which is $3.2bn higher than December 2019.

Rural goods were another important driver of the export increase, posting an 18.4% increase in the month, mainly spurred by the 75% increase in cereals.

The factors above allowed December to be the 7th consecutive month of current account surpluses, capping the quarter off with a $17.4bn surplus, a $3.8bn increase from the September quarter.

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

Source: Westpac

Updating your payroll to apply tax cuts

The ATO has now updated tax withholding schedules to reflect the 2020–21 income year personal tax cuts.

Updated schedules are available at ato.gov.au/taxtables

Employers now need to adjust their payroll processes and systems for the tax cuts to be reflected in employee’s take-home pay. Employers need to ensure that the correct amount is being withheld from each employee’s salary or wages from no later than 16 November.

The implementation of these adjustments may be complicated and different for each employer.

Anything that is withheld from old scales will be taken into account in the individual’s end of year tax return.

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

State and Territory governments’ COVID-19 economic stimulus responses

States & Territories have all enacted various economic stimulus responses to COVID-19. The responses are detailed below.

Australian Capital Territory

·        Reduction in stamp duty on the following:

o   new land single residential blocks to zero

o   off-the-plan apartment and townhouse purchases up to $500,000 to zero

o   off-the-plan apartment and townhouse purchases between $500,000 and $750,000 by $11,400.

·        Payroll tax relief:

o   6-month waiver of payroll tax for businesses whose operations are directly affected by the 'prohibited activities list' now, and into the future. Has been extended to December 2020

o   All ACT businesses with Group Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest free, until 1 July 2022

o   Businesses in the construction sector will be able access interest-free payroll tax deferrals. This has been extended to December 2020

o   Licenced venues will receive a 12-month waiver of their food business registration and on-licence liquor licencing fees from 1 April 2020 and outdoor dining fees for 2020-2021 will be waived.

·        Rent relief:

o   Deferring the issuing of notices for 2019-20 quarter four commercial rates instalments by 4 weeks to provide immediate cash flow assistance to commercial property owner

o   Commercial landlords and owner operated businesses can continue to apply for rates rebates to December 2020 if their tenants or themselves are significantly affected

o   Rental relief to commercial and community tenants of ACT Government owned properties that have been significantly impact by the virus

·        Increasing subsidies for apprenticeships and traineeships and other VET students

·        $750 electricity rebate for small business owners

·        one-off payment of up to $5,000 to taxi drivers

·        Support for households includes:

o   Government will share the cost reduction of rental on a 50/50 basis, capped at $1,300 per quarter

o   Delaying the issue of all general rates notices by 4 weeks, and push back payment dates by that time, to allow people eligible for Commonwealth assistance to start receiving it.

deferral of general household rates for 12 months will be available for any owner occupier in the Territory experiencing hardship

New South Wales

·        changes to the stamp duty threshold on newly built homes and vacant land. This will eliminate stamp duty on newly built homes below $800,000 and vacant land below $400,000.

·        introduction of a land tax discount for new build-to-rent housing projects until 2040. The discount will be equivalent to at least a 50% reduction in land tax, dependent on the unimproved land value.

·        recovery grants of up to $3000 for eligible small businesses

·        rental support measures which includes a $440 million land tax relief package for eligible landlords if they pass on the savings to their tenants

·        Small businesses can receive up to $10,000 which will be available through Service NSW (after mid-April) and will remain open until 1 June 2020. To be eligible, a business will need to provide appropriate documentation to show:

o   they have been highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020

o   the business has between 1-19 employees

o   turnover of the business is more than $75,000 and payroll of below $900,000 (NSW Government 2019-20 payroll tax threshold)

o   the business is NSW based, employs staff and has an ABN as at 1 March 2020

o   the business will use funding for business costs such as utilities, overheads, legal costs and financial advice.

·        A $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees.

·        Further payroll tax relief:

o   Deferral of payroll tax for business with payrolls over $10 million for up to 6 months

o   Businesses with payrolls of $10 million or less will receive an additional 3-month deferral to the initial 3-month waiver in the first package.

·        Deferral of gaming tax for clubs, pubs and hotels, and lotteries tax for 6 months, conditional on these funds being used to retain staff.

·        Deferral of the parking space levy for 6 months

·        Deferral of rents for 6 months for commercial tenants with less than 20 employees in all Government-owned properties.

Northern Territory

To save jobs the Northern Territory Government has announced on 29 July 2020 an additional $42 million in stimulus measures:

·        $20 million for the Small Business Rebound and Adaption Grant – a new grant up to $10,000 when matched dollar-for-dollar to support small businesses to rebound and adapt. Grants open 1 September 2020

·        $10 million Territory Tourism Voucher Scheme

·        $10 million Immediate Work Grants Scheme – grants for incorporated not-for-profit and community organisations to undertake repairs, renovations and upgrades to their premises/facilities and will be issued to applicants who missed out the first time around. Grants open 1 September 2020.

·        $2 million My Territory Local Business Voucher Scheme - a second round of local business-boosting voucher scheme to commence on 1 September.

The Government previously announced $180 million in additional support to businesses as part of the Jobs Rescue and Recovery Plan. The additional support involves:

·        payroll tax relief – includes abolishing payroll tax for 6 months for smaller and medium-sized businesses, and defer it for 6 months for large businesses

·        reducing power, water and sewerage bills by 50 per cent for businesses for 6 months (for regulated utility tariffs)

·        Providing incentives for commercial landlords to reduce rents, and

·        working with councils to reduce rates.

Support for businesses and jobs include:

·        $20 million Business Improvement Scheme - aimed at helping businesses get customers back into premises by undertaking improvements to a Territory business. All eligible businesses will receive $10,000.

·        $5 million Business Structural Adjustment package – to assist businesses who need to physically adjust to the 100 person rule or to establish or upgrade their online presence to adjust to changing behaviours of consumption. All businesses can apply, but the Department will be focusing on the hospitality sector first (such as restaurants). Terms and conditions and a hotline will be released soon.

·        $5 million Immediate Works Grants Package - reintroduces the Immediate Works Grant for incorporated not-for-profit and community organisations – including clubs - to undertake repairs, renovations and upgrades to their premises/facilities. Applicants can apply for grants of up to $50,000, which will then be matched dollar-for-dollar if the organisation also puts in their own $50,000.

·        Freezing Government Fees and Charges and Electricity Prices until 1 July 2021.

Queensland

The Queensland Government has announced an additional $249 million in COVID-19 related tax relief to small and medium businesses across Queensland.  The measures are: 

 ·        a two-month waiver for of payroll tax for July and August 2020 for businesses with annual Australian taxable wages up to $6.5 million – eligible employers need to apply by 30 October 2020

·        continuing to exempt JobKeeper subsidy payments from payroll tax – despite the Morrison government making these payments liable for income tax

·        allowing businesses to pay off existing payroll tax deferred liabilities over the course of 2021, and

·        for businesses renting State Government premises and incurring a demonstrable COVID impact, extending existing rent relief to the end of calendar 2020.

The protections would be underpinned by $400 million in land tax relief for property owners, which must be passed on to tenants. Land tax relief measures available include:

·        a 3-month deferral of land tax liabilities for the 2020–21 assessment year

·        a land tax rebate reducing land tax liabilities by 25% for eligible properties for the 2019–20 and 2020–21 assessment years

·        a waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year.

South Australia

The emergency $650 million Jobs Rescue Package, brings the total stimulus package for SA to $1 billion. Support for businesses, jobs and households include:

·        Payroll tax relief for businesses:

o   6-month payroll tax waiver for businesses with Australian grouped wages up to $4 million i.e. no payroll tax payments for the months of April to September 2020. RevenueSA will notify these businesses through Revenue SA online

o   6-month payroll tax deferral (April to September 2020) for businesses with Australian grouped wages above $4 million on demonstration of significant COVID-19 impacts on cashflow. Apply online (the form will be developed)

·        Land tax relief:

o   individuals and businesses paying land tax quarterly in 2019-20 will be able to defer payment of their 3rd and 4th quarter instalments for up to 6 months. No application required – information will be provided with their land tax notices of assessment

o   For 2020-21, the new Land Tax Transition Fund relief will be increased from 50% to 100% based on existing relief criteria guidelines

·        Waiver of liquor licence fees for 2020-21 for those hotels, restaurants, cafes and clubs forced to close because of the social distancing restrictions

·        The criteria for Job Accelerator Grants will be relaxed

·        Establishment of the $300 million Business and Jobs Support Fund and the $250 million Community and Jobs Support Fund

·        Cost of Living concessions:

o   A once-off boost of $500 and bring forward the 2020-21 'Cost of Living Concession' for households who are receiving the Centrelink JobSeeker Payment

o   For eligible homeowners, their 2020-21 payment of $215.10 will now become $715.10. Eligible tenants will receive $607.60

Access to accrued leave for the public sector workforce.

Tasmania

Small business support includes:

·        Increase the Small Business Interest Free Loan Scheme announced in the first package from $20 million to $50 million which is now available for businesses with turnovers less than $10 million.

·        Provide a new $40 million Small Business Grants Program with $20 million set aside for an emergency grants program of $2500 cash payments.

·        Provide a Digital Ready for Business Program, to assist businesses take their business online.

·        Provide Business Continuity Advice with $750,000 in funding made available for businesses to seek cashflow and continuity advice. A one-off grant of up to $750

·        A youth employment payroll tax rebate scheme will be introduced for young people from 1 April 2020.

·        $2.1 million will be provided for one-off $5,000 grants for businesses that hire an apprentice or trainee, complementing the Federal Government's apprenticeship package.

·        One-off emergency relief payments of $250 for individuals and up to $1000 for families who are required to self-isolate by public health as a result of coronavirus.

Victoria

Support for business and jobs in the $1.7 billion economic survival and jobs package include:

·        Full payroll tax refunds for the 2019-20 financial year will be provided to small and medium-sized businesses with payroll of less than $3 million. Eligible businesses must continue to lodge returns but do not need to may further payments. Refund payments will start next week

·        The above businesses will also be able to defer any payroll tax for the first 3 months of the 2020/21 financial year until 1 January 2021.

·        Land owners due to pay 2020 land tax that have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020.

·        Commercial tenants in government buildings can apply for rent relief. The government is encouraging private landlords to do the same.

·        Liquor licensing fees for 2020 will be waived for affected venues and small businesses

·        $500 million will be provided to establish a Business Support Fund to support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.

·        A $500 million Working for Victoria Fund will be established to help workers who have lost their jobs find new opportunities including work cleaning public infrastructure or delivering food.

Western Australia

·        Households:

o   Eligibility for Energy Assistance Payment boost will be expanded to include new eligible applicants until 30 September 2020.

o   No households experiencing financial hardship as a result of COVID-19 will have their power or water disconnected and no interest will be charged on deferred bill payments.

o   Households can apply for an interest-free payment arrangement or for late payment penalties to be waived for transfer duty, landholder duty, vehicle licence duty or land tax.

o   Keystart customers facing financial hardship due to COVID-19 can apply to defer principal repayments and waive interest costs by up to 6 months.

·        Business:

o   payroll tax threshold will be increased to $1 million on 1 July 2020, bringing the increase forward from the planned date of 1 January 2021.

o   Businesses can apply for an interest-free payment arrangement and for late payment penalties to be waived for payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax.

o   one-off grant of $17,500 will be available for employers, or groups of employers, whose annual Australian taxable wages are more than $1 million and up to $4 million

JobKeeper Scam

The ATO has issued a warning regarding scam emails being sent to Australians recently. It is urging people to delete the email immediately.

The suspicious email encourages a reply that includes an attachment of a high-resolution photo of both the back and front of their Medicare and driver’s licence cards. This email claims to ‘check’ JobKeeper and Backing Business Incentive Scheme.

The ATO have acknowledged the scam email by saying, “We’re receiving reports of email scams about JobKeeper and Backing Business Investment claims. The fake emails say we're investigating your claims. They ask you to provide valuable personal information, including copies of your driver’s licence and Medicare card.”

They urge people to delete the email and never send out your personal information over email or phone call.

If you believe that you’ve been targeted by a scam it is important that you should call the ATO on 1800 008 540 to check its legitimacy, or report it to reportemailfraud@ato.gov.au.

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

Home Office Expenses – Shortcut Method - Extended to 31 December 2020

The Shortcut method for Home Office Expenses enables you to simply calculate your deductions from working from home. This method allows you to claim up to 80 cents per hour, of every hour you have worked from home.

It is important to note that this is temporarily available and only valid for the hours worked from home between:

• 1 March to 30 June 2020 in the 2019–20 income year

• and now extended for 1 July and 31 December 2020 in the 2020–21 income year.

All employees who work from home during these dates can use this method if you:

• Are working from home to fulfil your employment duties, not just carrying out minimal tasks such as occasionally checking emails or taking calls

• Have incurred additional running expenses as a result of working from home.

The shortcut method covers all your working from home expenses, such as:

• Phone expenses

• Internet expenses

• The decline in value of equipment and furniture

• Electricity and gas for heating, cooling and lighting.

By using this method your unable to claim any other expenses for working from home.

No dedicated work area is mandatory to use this method. However, a record of hours worked (timesheet. roster, diary etc.) is required.

If you already had a work from home arrangement in place before 1 March 2020, that method will be enforced to calculate your deduction for the period 1 July 2019 to 29 February 2020.

The shortcut method includes decline in value of all items. Therefore. if you choose to use this method, there’s no requirements to separately calculate the decline in value of equipment or depreciating assets. With that said, you still may combine methods or use a different method in later years, so it is important to keep the:

• Receipts for depreciating assets or equipment you use when working from home

• Records of how you calculated your work-related use of the asset

• Your decline in value calculations

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

$250 Cash Bonus for Pensioners

In the 2020-21 Budget announcement, 6 October 2020, there was talk about a $500 total Cash Bonus for pensioners. It was announced a payment of $250 will be given out in December 2020 and a second $250 payment in March 2021. There are no official dates for these payments as of yet. In order to be considered eligible to receive the bonus, information in your MyGov should be undated by 27 November 2020. It is also important to note that there are no laws in place yet and therefore the cash bonus may be subject to change.

If you fit into any of the following categories, you are eligible for the payments:

• Age pension

• Disability Support Pension

• Carer Payment

• Family Tax Benefit, including the Double Orphan Pension (but not in receipt of a primary income support payment)

• Carer Allowance (but not in receipt of a primary income support payment)

• Pensioner Concession Card (PCC) holders (not in receipt of primary income support payment)

• Commonwealth Seniors Health Card holders

• Eligible Veterans' Affairs payment recipients and concession card holders

These payments will not be taxed and will not count as income support.

To qualify for the Commonwealth Seniors Health Card, an individual must have reached the pension age, meet an income test, are not receiving any payments from Veterans Affairs and are an Australian resident living in Australia.

To meet the income test, individuals or couples must earn below the following thresholds:

·       $55,808 for singles

·       $89,290 for couples

·       $111,616 for couples who are separated by illness, respite care or prison.

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

Australian Federal Budget 2020-21 - Overview

Last night, Tuesday 6 October 2020, the Government released it’s 2020-21 Budget, an historical budget spending big on infrastructure, job creation, asset write-offs and personal tax cuts.

The 2020/2021 Federal Budget sees a record $213.7 Billion deficit and net debt predicted to peak at $966 Billion (44% GDP) by June 2024. 

With unemployment expected to peak at 8% in December 2020, the Government is focused on growing the economy and creating jobs, with unemployment expected to reduce to 6.5% by June 2022.

However, there is no indication of how the Government plans to fund this expenditure and ultimately repair the Budget. That will happen when unemployment falls below 6%.

Note: These changes are proposals only and may or may not be made law.

View fullsize

The following are a summary of some of the key items in the budget

Accelerated Personal tax cuts

An additional $17.8 billion announced in personal income tax relief to support the economic recovery, including an additional $12.5 billion over the next 12 months. More than 11 million taxpayers will get a tax cut backdated to 1 July this year as the government brings forward "Stage 2" tax cuts to 1 July 2020. In 2020-21, low- and middle-income earners will receive tax relief of up to $2,745 for singles, and up to $5,490 for dual income families, compared with 2017-18 settings. Treasury expects most of the benefit will go to those on incomes below $90,000.

The upper threshold of the 19% tax bracket will rise from $37,000 to $45,000 and the upper threshold of the 32.5% tax bracket will rise from $90,000 to $120,000. This will be worth the equivalent of $41 a week to those earning between $50,000 and $90,000 a year, and about $49 a week to those earning more than $120,000 a year

Extended instant asset write-off

The instant asset write-off is being made even more generous and temporarily extended. From 7:30pm (AEDT) on 6 October 2020 until 30 June 2022, businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed. The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.

Small business loss carry back

Companies with turnover up to $5 billion will be allowed to offset losses against previous profits on which tax has been paid, to generate a refund. Eligible companies can carry back tax losses from the 2019-20, 2020-21 or 2021-22 income years to offset previously taxed profits in 2018-19 or later income years. Companies may elect to receive a tax refund when they lodge their 2020-21 and 2021-22 tax returns.

Additional R&D incentives

An additional $2 billion is being invested through the Research and Development Tax Incentive. For small claimants (turnover less than $20 million), the refundable R&D tax offset will increase and there will be no cap on annual cash refunds. For larger claimants, the intensity test will be streamlined and the non-refundable R&D tax offset will be increased.

The cap on eligible R&D expenditure will be lifted from $100 million to $150 million per annum. These changes apply from 1 July 2021 and are expected to support more than 11,400 companies that claim the incentive.

Expanded small business tax concessions

Amendments will allow businesses with less than $50 million aggregated annual turnover (up from $10 million) to access up to 10 small business tax concessions with fringe benefits tax scrapped on car parking, phones or laptops, simpler trading stock rules and easier PAYG instalments.

Super reforms

Under the Government's latest reforms to super, employers will effectively stop offering a default fund and superannuation funds will be required to meet an annual performance test under guidance from APRA.

The Government will also establish an online comparison tool known as 'YourSuper'.

Additional trustee obligations will also be in place - Super fund trustees will need to ensure decisions are made in the best financial interest of members and provide better information on management and expenditure.

Transport Infrastructure spend

Infrastructure investment announced in the Budget now totals $14 billion in new and accelerated projects over the next four years. The projects are expected to support 40,000 jobs during their construction.

There is also an additional $3 billion for small scale road safety and the Local Roads and Community Infrastructure Program supporting a further 10,000 jobs. Funding will be provided to state and local governments on a 'use it or lose it' basis.

Jobmaker hiring credit

The $4 billion JobMaker Hiring Credit will be payable for up to 12 months for each new job and is available from 7 October 2020 to employers who hire eligible employees aged 16-35. The Hiring Credit will be paid quarterly in arrears at the rate of $200 per week for those aged between 16-29, and $100 per week for those aged between 30-35. Eligible employees are required to work a minimum of 20 hours per week. To be eligible, employers will need to demonstrate an increase in overall employee headcount and payroll for each additional new position created. Treasury estimates that this will support around 450,000 jobs for young people.

New apprenticeships and trainees

Businesses that take on a new apprentice or trainee will be eligible for a 50% wage subsidy starting 5 October 2020. But the subsidy is capped at 100,000 workers. The $1.2billion subsidy will be available to employers of any size or industry.

Insolvency reforms

Forming part of the cutting red tape initiatives are recently announced reforms to the insolvency framework in more than 30 years. The changes, which will start on 1 January 2021, would enable more Australian small businesses to quickly restructure.

Support for pensioners and welfare recipients

Two cash payments: Aged pensioners, carers, disability support and concession cardholders will receive two $250 payments. The payments will be made progressively from 30 November 2020 and early 2021.

First home buyers

Purchase cap lifted: Up to 10,000 more first home buyers will be able to get a loan to build a new home or buy a newly built home with a deposit of as little as 5%. The purchase cap will also be lifted and varies depending on the State and regional area.

Detailed information is available in the Budget Papers here

Source : Chartered Accountants ANZ / MLC

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

Deductions for vacant land

If you hold vacant land and intend to build a rental property, from the 2019-20 income year, you are unable to deduct expenses for holding onto the property until it is available to rent. This includes any vacant land where you have claimed expenses in previous financial years.

This does not apply to land:

• held by the following entities

  • corporate tax entity

  • superannuation plan (other than self-managed superannuation funds)

  • managed investment trust

  • public unit trust

  • unit trust or partnership where all the members are entities on this list.

• used in business or primary production

• vacant land due to natural disaster or major fire.

If your land is vacant due to the rental property being destroyed by a natural disaster like a bushfire, you may be covered by the exceptional circumstances provision which may allow you to claim costs of holding the land for up to three years while you rebuild your rental property.

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

JobKeeper Payment Extension

The JobKeeper scheme has now been extended from 28 September 2020 until 28 March 2021.

A concise pictorial summary of the Extension is available here

There are two separate extension periods. For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different. Additionally, you must allocate sales in the same way those sales are reported on a business activity statement (BAS) if you were registered for GST (this was not necessarily the case in JobKeeper 1.0).

The extension periods are:

• Extension 1 : from 28 September 2020 to 3 January 2021

• Extension 2: from 4 January 2021 to 28 March 2021

JobKeeper extension 1

You will need to show that your actual GST turnover has declined in the September 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).

JobKeeper extension 2

You will need to show that your actual GST turnover has declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019).

Rates

JobKeeper Payment rates for employees will change based on the total hours worked during their reference period (either 4 weeks prior to 1 March or 1 July as applicable) and employers will need to nominate the rate being claimed for each eligible employee and business participant.

The rates of the JobKeeper payment in extension period 1 are:

• Tier 1: $1,200 per fortnight (before tax)

• Tier 2: $750 per fortnight (before tax).

The rates of the JobKeeper payment in extension period 2 are:

• Tier 1: $1,000 per fortnight (before tax)

• Tier 2: $650 per fortnight (before tax).

The rate of the JobKeeper payment will depend on the number of hours:

• an eligible employee works, or

• an eligible business participant is actively engaged in the business.

Tier 1 rate:

This rate applies to:

• eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and

• eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.

Tier 2 rate:

This rate applies to:

• any other eligible employees and eligible business participants.

Alternative tests for determining the payment rates that apply to an eligible employee, eligible business participant or eligible religious practitioner may be available in some circumstances.

Actual decline in turnover test

For JobKeeper fortnights from 28 September 2020 you will need to meet an actual decline in turnover test. The actual decline in turnover test is similar to the original decline in turnover test. However:

• it must be done for specific quarters only (no longer an option to assess based on monthly turnover)

• you must use actual sales made in the relevant quarter, not projected sales, when working out your GST turnover

• you must allocate sales to the relevant quarter in the same way you would report those sales to a particular business activity statement if you were registered for GST.

You can satisfy the actual decline in turnover test in two ways:

• the basic test; or

• the alternative test.

Generally, businesses will use the basic test, which is based on GST turnover. Importantly though, the alternative test remains available for some cases where the normal comparison period is not appropriate.

What doesn't change

To claim for fortnights in the JobKeeper extension 1 or 2:

You don't need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September.

• You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September.

• You don't need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to

  • holding an ABN, and

  • declaring assessable income and supplies.

What you need to do

From 28 September 2020, you must do the following:

• work out if the tier 1 or tier 2 rate applies to each of your eligible employees and/or eligible business participants and/or eligible religious practitioners

• notify the ATO and your eligible employees and/or eligible business participants and/or eligible religious practitioners what payment rate applies to them

• during JobKeeper extension 1 – ensure your eligible employees are paid at least

  • $1,200 per fortnight for tier 1 employees

  • $750 per fortnight for tier 2 employees

• during JobKeeper extension 2 – ensure your eligible employees are paid at least

  • $1,000 per fortnight for tier 1 employees

  • $650 per fortnight for tier 2 employees.

New JobKeeper participants

The JobKeeper scheme will remain open to new participants, provided they meet the eligibility requirements for the relevant period.

Further factual information from the ATO is available here

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

2020 Tax Facts & Tips - Businesses & Individuals

Our 2020 Tax Tips for Business and Tax Facts for Individuals are now available below or at our Newsletters page

Should you need further 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

Instant asset write-off $150,000 for eligible businesses

From 12 March 2020 until 30 June 2020 the instant asset write-off:

• threshold amount for each asset is $150,000 (up from $30,000)

• eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

Note: On 9 June 2020, the government announced it will extend the $150,000 instant asset write-off until 31 December 2020. This proposed change is subject to the parliamentary process and is not yet law.

Eligibility

Eligibility to use instant asset write-off on an asset depends on:

• your aggregated turnover (the total ordinary income of your business and that of any associated businesses)

• the date you purchased the asset

• when it was first used or installed ready for use

• the cost of the asset being less than the threshold.

If you run a small business and choose to use the simplified depreciation rules, you must use instant asset write-off on all eligible assets.

Thresholds

The thresholds have changed over the last few years and are as follows:

Under instant asset write-off eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use.

Instant asset write-off can be used for:

• multiple assets as long as the cost of each individual asset is less than the relevant threshold

• new and second-hand assets.

It cannot be used for assets that are excluded from the simplified depreciation rules.

Cars

If you purchase a car (a passenger vehicle, except a motor cycle or similar vehicle, designed to carry a load less than one tonne and fewer than nine passengers) for your business, the instant asset write-off is limited to the business portion of the car depreciation limit of $57,581 for the 2019–20 income tax year

For more information see the ATO site at https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/#

Should you need further 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 – ongoing monthly declaration dates and guidance, plus key dates

To ensure JobKeeper payments continue for employers, sole traders and other entities that have enrolled and identified their eligible employees, they will need to make a business monthly declaration as a condition of participating in the scheme.

The ATO has granted a deferral of the due date for the monthly declaration to the 14th of each month under the JobKeeper scheme commencing from June. This declaration needs to be completed for each month, between the 1st and the 14th of following month. For example, the business monthly declaration for reimbursement of JobKeeper payments for the month of May needs to be completed by 14 June. The earlier this step is completed from the 1st of each month; the sooner businesses will be reimbursed for JobKeeper fortnights for that month.

Employers need to ensure they have paid their eligible employees at least $1,500 (before tax) in each JobKeeper fortnight that they are they are claiming for. They will need to reconfirm their eligible employees, and their contact and bank details.

 As part of the declaration employers need to confirm:

• their eligible employees, including if employees change or leave their employment

• their current and projected turnover. 

This can be done through the business monthly declaration step in ATO online services, or through STP enabled software that is updated with JobKeeper functionality.

This is not a re-test of eligibility; it is an indication of how the business is progressing.

SMS and email reminders will continue to be issued to employers that have registered for the JobKeeper Payment to remind them to identify their eligible employees and make their monthly declarations.

 Key dates

• From 20 April: complete Step 1: Enrol for the JobKeeper payment.

• From 4 May: complete Step 2: Identify and maintain your eligible employees and eligible business participant.

• By 8 May: you must have paid your eligible employees at least $1,500 (before tax) for each JobKeeper fortnight to claim JobKeeper payments for April.

• By 31 May: you must complete steps 1 and 2 if you want to claim for JobKeeper fortnights in April and May.

• After May: If you are enrolling and identifying your employees and business participant for the first time after May, you must complete these steps in the month you wish to claim for.

• By 14 June: complete Step 3: Make a business monthly declaration for May.

• By the 14th of each month: complete Step 3: Make a business monthly declaration to claim JobKeeper payments for the previous month.

• You should also make any updates to your employees' eligibility using the 'Maintain' function as part of your business monthly declaration.

General Tax Tips 2020

• Bring forward deductions into this financial year.

• Prepay interest on rental properties & other investments.

• Prepay 12 months Income Protection Insurance & any other expenses such as subscriptions.

• Salary Sacrifice to super or make personal deductible contributions.

• Consider Transition to Retirement Income Streams if you are over 55.

• Defer income into 2021 particularly if your income may be lower next year.

• If you’re not already, look at investing tax effectively to create an asset for the future while saving tax now.

• Gearing into the share market is possible (not only real estate) and works well in relation to franking credits.

• Capital Gains - consider crystalising unrealised losses to offset current year capital gains / Defer Asset Sales until next financial year.

Should you need further 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

Small Business Superannuation Clearing House - cut off date 23 June 2020

If you wish to claim a deduction for super contributions for the year ending 30 June 2020, and are making payments via the ATO Small Business Superannuation Clearing House (SBSCH), payments need to be accepted by the SBSCH by 23 June 2020.

To ensure you can claim a deduction for the 2019–20 income year, you need to allow processing time for your super payments to be received by your employees' super funds before the end of the 2019–20 income year.

Super payments are only considered to be paid for the purpose of claiming a tax deduction once they have been received by the super fund, not the date the Small Business Superannuation Clearing House (SBSCH) accepts them.

If you have use a different Superannuation Clearing House, you should check with them as to their cut-off date as it differs depending on the Clearing House.

Remember also to check with your employees if you need to update their super fund details in your Super Clearing House account including, a change of ownership of a superannuation product. If there has been a change in ownership, the super fund's ABN or Unique Superannuation Identifier (USI) may have been changed for your employee’s super account. Super funds will inform members (your employees) of any such changes, which your employee should give you.

Should you need further 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

Foreign residents and main residence exemption - Major changes

There are now special capital gains tax (CGT) rules if you're a foreign resident for tax purposes. These rules will impact you when you sell residential property in Australia.

A change in law on 12 December 2019 means if you are a foreign resident for tax purposes at the time you dispose of your residential property in Australia, you will NOT qualify for exemption from CGT unless you satisfy the life events test.

You satisfy the life events test if, at the time of the disposal of your residential property in Australia:

• you were a foreign resident for tax purposes for a continuous period of six years or less and, during that time, one of the following must have also occurred:

  • you, your spouse, or your child under 18, had a terminal medical condition

  • your spouse, or your child under 18, died

  • the CGT event involved the distribution of assets between you and your spouse as a result of your divorce, separation or similar maintenance agreements.

Consider this when you use the exemption as a reason for a variation to your foreign resident capital gains withholding rate.

When you lodge your income tax return, you:  

• must declare any net capital gain in your income

• can claim a credit for the foreign resident withholding tax paid to us.

When the change applies

The change in law applies to foreign residents for tax purposes as follows:

• for property held prior to 7:30pm (AEST) on 9 May 2017

  • you can only claim the CGT main residence exemption for disposals that happen up until 30 June 2020 and only if you meet the other requirements for the exemption

  • disposals that happen from 1 July 2020 are no longer entitled to the CGT main residence exemption unless you satisfy the life events test (mentioned above)

• for property acquired at or after 7:30pm (AEST) 9 May 2017

  • the CGT main residence exemption no longer applies to disposals from that date unless you satisfy the life events test (mentioned above).

Note: This change only applies if you are not an Australian resident for tax purposes at the time of the disposal. Where you dispose of the main residence under a contract, the disposal time is the time you entered into the contract. Where you do not dispose of the main residence under a contract, the disposal time is the time of settlement.

If you weren't an Australian resident for tax purposes while living in your property, you are unlikely to satisfy the requirements for the CGT main residence exemption.

If you are a foreign resident for tax purposes when you die, the changes also apply to:

• legal personal representatives, trustees and beneficiaries of deceased estates

• surviving joint tenants

• special disability trusts.

 More information is available at the ATO site here

Should you need further 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 – Clarity and information on Eligibility & Turnover – 8 May 2020

The ATO has been progressively releasing further guidance regarding the JobKeeper Payment.

Importantly, if you wish to claim JobKeeper from the start date of 30 March, any eligible employees need to have been paid the equivalent of $1,500 per fortnight in gross payment by 8 May 2020.

Enrolment to apply from 30 March can be done anytime up until 31 May however.

It is worth remembering that even if you do not qualify from 30 March, you may qualify in future months, so you can continuing testing eligibility.

You only need to satisfy the fall in turnover test once – you don't need to test your turnover in the following months or quarters.

Below are various clarifications that have been released recently which have been extracted from the ATO website:

• Applying the turnover test

• Identify the turnover test period

• How to calculate a fall in turnover for the first fortnight starting 30 March 2020

• How to determine a fall in turnover

• Calculating GST turnover

• Basic test

• Alternative test

• Modifications to projected and current GST turnover

Should you need further 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

---

Applying the turnover test

You can satisfy the fall in turnover test in two ways:

• The basic test

• The alternative test

Generally businesses will use the basic test, which is based on GST turnover. Where appropriate turnover comparison periods are not available (for example, where your business has been operating for less than a year) we may make an alternative test available.

You only need to satisfy the fall in turnover test once – you don't need to test your turnover in the following months or quarters.

However, there are ongoing monthly turnover reporting requirements.

---

Identify the turnover test period

Choose whether you are comparing your monthly or quarterly turnover. You can choose to compare the relevant month or quarter, regardless of whether you report quarterly or monthly.

For qualification from the start of the scheme, the turnover month used can be either March 2020 or April 2020. To qualify at a later time, the turnover month can also be May, June, July, August or September 2020, provided that the turnover month is the month in which the first fortnight for which you claim the JobKeeper payment ends, or another earlier month.

In other words, you will only be eligible for JobKeeper payments for JobKeeper fortnights that end on or after your turnover test period starts. 

---

How to calculate a fall in turnover for the first fortnight starting 30 March 2020

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.

It is worth remembering that even if you do not qualify from 30 March, you may qualify in future months, so you can continuing testing eligibility. 

---

How to determine a fall in turnover

You only need to satisfy this requirement once – you don't need to retest your turnover each month. However, you will be asked each month to tell us your current and projected turnover.

At the time you enrol in the JobKeeper Payment scheme, you need to confirm that your business in a relevant period has had, or is likely to have, a:

• 30% fall in turnover (for an aggregated turnover of $1 billion or less)

• 50% fall in turnover (for an aggregated turnover of more than $1 billion), or

• 15% fall in turnover (for ACNC-registered charities other than universities and schools).

---

Calculating GST turnover for JobKeeper Payment

To help clarify how to calculate GST turnover for the purpose of determining eligibility for the JobKeeper program, we can confirm the following:

If your clients account for GST on a cash basis, they can use either cash or accruals (non-cash) to calculate their GST turnover.

If your clients currently use accruals to account for GST we expect in most cases they would continue to use this method. However, if they choose to use the cash basis we may want to understand why the different approach is an appropriate reflection of turnover.

In both cases, the basis used must be the same for calculating your clients' projected and current GST turnover. Whichever calculation used, your clients will need to keep records to demonstrate the calculation and explain why this method was chosen.

Check our frequently asked questions for examples to help you and your clients understand how they may calculate their GST turnover for the purposes of enrolling in the JobKeeper Payment scheme.

More information is available at https://www.ato.gov.au/Tax-professionals/Newsroom/Your-practice/Calculating-GST-turnover-for-JobKeeper-Payment/

---

Calculating turnover

The turnover calculation is based on your sales (excluding GST). You need to compare your sales (or likely sales) for a recent month with the same month last year (for example compare April 2019 and April 2020 sales). You can also use the April to June 2020 quarter to compare the same quarter last year.

If you are working out your likely sales you need to:

• make a reasonable estimate

• document the reasons for your estimate.

As a practical matter, we accept that you may use either a cash or accruals basis to work out your turnover. However, you must use the same method for both periods. We expect that you will normally use the same method as you use for GST.

Examples of some of the things that should be excluded from turnover are:

• include input-taxed sales (e.g. bank interest, sale of shares, residential rental income)

• sales not connected with an enterprise that you carry on (e.g. sale of private car).

You don’t need to be registered for GST to calculate your turnover. GST turnover is just how we work out what is included and what is not. 

There are a few special situations where we have made available some extra ways of calculating the fall in turnover. This is called the alternative turnover test.

---

Basic test

This test is satisfied where your projected GST turnover for the turnover test period falls short of your current GST turnover for the relevant comparison period, by the specified percentage (generally 30%).

To apply the basic test, you need to do:

• Step 1: identify the turnover test period

• Step 2: identify the relevant comparison period

• Step 3: work out the relevant GST turnover

• Step 4: determine which shortfall percentage applies

• Step 5: determine if GST turnover has fallen by the specified shortfall percentage

The turnover calculation is based on GST turnover, but there are some modifications to the definitions of current and projected GST turnover, including disregarding GST grouping.

If the basic test is not successful, then the following Alternative Tests can be considered

 

Alternative test

The Commissioner has determined alternative tests for fall in turnover for classes of entities where there is not an appropriate relevant comparison period in 2019 for the purposes of an entity in the class of entities satisfying the basic test.

The relevant appropriate comparison period in 2019 is a calendar month that ends after 30 March 2019 and before 1 October 2019 or a quarter that starts on 1 April 2019 or on 1 July 2019.

However, if an entity satisfies the basic test, it does not need to go to an alternative test determined by the Commissioner.

Circumstances where an alternative test applies:

• The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020.

• The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now).

• The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now).

• The entity’s turnover substantially increased by  

  • 50% or more in the 12 months immediately before the applicable turnover test period, or

  • 25% or more in the 6 months immediately before the applicable turnover test period, or

  • 12.5% or more in the 3 months immediately before the applicable turnover test period.

• The entity was affected by drought or other declared natural disaster during the relevant comparison period.

• The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or

• The entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.

If an alternative decline in turnover test applies in these circumstances, the Commissioner also sets out what that alternative decline in turnover test is.

You can get more information on these alternative tests in the Legislative Instrument and Explanatory Statement:

• Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020

• Explanatory statement: Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020

The Commissioner cannot determine an alternative decline in turnover test in all circumstances. It is only where there is an event or circumstance that is outside the usual business setting for entities of that class that results in the relevant comparison period in 2019 not being appropriate for applying the basic test.

The Commissioner can also only determine a test for a class of entities, and cannot make discretionary decisions for individual entities.

If you fall into more than one of the classes of entities covered by the alternative test, you can choose which alternative decline in turnover test to apply. You only need to satisfy one of the tests (it does not matter if you do not satisfy one of the other tests that applies to you). 

---

Modifications to projected and current GST turnover

Projected GST turnover and current GST turnover are defined in the GST Act but have been modified for JobKeeper purposes as explained below. The amounts included in calculating projected GST turnover and current GST turnover are the same regardless of whether you are currently GST registered.

When calculating GST turnover for an entity that operates two or more businesses, the turnover from each business is combined. Entities that form part of a GST group or consolidated group must work out the projected GST turnover and current GST turnover and apply the fall in turnover test for each entity individually.

There are four main modifications to the GST turnover calculation:

• projected GST turnover and current GST turnover are calculated for the relevant month or quarter being tested (rather than for 12 months)

• where an entity is part of a GST group, the entity calculates its GST turnover as if it wasn’t part of the group. This means that supplies made by one group member to another will be included in GST turnover for the purposes of the fall in turnover test

• the calculation includes the receipt of tax deductible donations by a deductible gift recipient. It also includes gifts of money, property (with a market value of more than $5000) and listed Australian shares received by an ACNC-registered charity (that is not a deductible gift recipient). However, none of these receipts are included if they are from an associate, and

• external Territories (e.g. Norfolk Island) are treated as if they formed part of the indirect tax zone (i.e. Australia).

 Projected GST turnover and current GST turnover excludes the following:

• GST you included in sales to your customers (if any)

• sales that are input taxed sales (e.g. bank interest, sale of shares, residential rental income)

• sales not connected with an enterprise that you carry on (e.g. sale of private car)

• sales that are not made for payment (unless a taxable supply to an associate)

• payments for no supply (e.g. JobKeeper payments)

• gifts and donations (except for deductible gift recipients and ACNC-registered charities as discussed above)

• sales not connected with Australia, for example:

  • sales of services made through a business you carry on outside Australia

  • sales of goods purchased and sold from a place outside Australia

  • sale of real property situated outside Australia

Super Guarantee amnesty - update

On 6 March 2020 the government introduced a superannuation guarantee (SG) amnesty (the amnesty). The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 penalty.

In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.

Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again – see Disclosures of unpaid SG between 24 May 2018 and 6 March 2020.

Employers who come forward from 6 March 2020 need to apply for the amnesty by 7 September 2020.

By law, the ATO must receive your SG amnesty application forms by 11:59pm Monday 7 September 2020 to be eligible. To remain eligible for the amnesty, you must pay your SG shortfalls, as well as interest charges. However, if you apply for the amnesty and are eligible the benefits, the ATO can work with you to establish a payment plan which is flexible to help you to continue making payments.

These arrangements include:

• flexible payment terms and amounts which we will adjust if your circumstances change

• the ability to extend the payment plan to beyond 7 September 2020 – the end of the amnesty period. However, only payments made by 7 September 2020 will be deductible.

As your tax agent, we can lodge the amnesty application forms via Online services for agents. Once lodged, the ATO will advise which quarters are eligible for the amnesty.

If you have disclosed unpaid super between 24 May 2018 and 6 March 2020, you don't need to apply or lodge again. The ATO are identifying eligible disclosures and amending assessments as quickly as possible.

For some people, this will result in you receiving a refund for the previously paid administration charges. Your financial institution details with the ATO need to be correct, to allow the ATO to issue your refund in a timely manner.

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

$10,000 Grants for Small Businesses in NSW

Thousands of small businesses will receive $10,000 under a new assistance scheme announced by Premier Gladys Berejiklian on 3 April 2020. The NSW Government will put $750 million into the Small Business Support Fund in a third wave of support to keep small businesses afloat.

“These grants will provide a big boost, and we will make the application process easy to ensure small businesses can receive some cash-flow as soon as possible to meet pressing needs“ Ms Berejiklian said.

To be eligible, businesses will need to:

• be based in NSW and be a small business ( as per the guidelines for the scheme )

• be registered with an ABN as at 1 March 2020 

• have an annual turnover of more than $75,000 

• employ 1-19 full-time workers as at 1 March 2020  

• be able to report a payroll below the NSW 2019-2020 payroll tax threshold of $900,000 

• have been highly impacted by Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 effective on 31 March 2020 

• have experienced at least 75% decline in turnover compared to the same two-week period in 2019, as a result of COVID-19 (for businesses that have been in operation for less than 12 months, refer to the guidelines) 

• have unavoidable business costs not otherwise the subject of other NSW and Commonwealth Government financial assistance measures.

If your business is not in one of the highly impacted industries (as listed in the guidelines) but you can demonstrate a significant disruption to your business resulting in a 75% reduction in turnover as a result of the Public Health Order 2020, you may be eligible for this grant. You will require a letter from your accountant confirming you meet a number of criteria

If you are a sole trader and you do not employ staff, unfortunately you are not eligible for this assistance.

Applications for the small business grant of up to $10,000 are available through Service NSW via the following link and remain open until 1 June 2020 www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant

More information on the announcement is available here

Detail of the guidelines are available at Service NSW via this link

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 offers $440 million Land Tax Break to support tenants and landlords

ANNOUNCED MONDAY 13 APRIL 2020

NSW commercial tenants significantly impacted by COVID-19 will have greater protection from evictions with the State Government set to enact the National Cabinet Code of Conduct as part of a $440 million land tax relief package.

The measures will apply to commercial leases where the tenant is in financial distress due to COVID-19, including but not limited to shops, cafes, gyms, hairdressers, restaurants, offices, warehouses and industrial sites.

Land tax relief is expected to be divided approximately 50-50 with around $220 million going to the commercial sector and a further $220 million expected to benefit the residential sector.

Commercial landlords will be offered a land tax concession if they pass the savings on to tenants through a rent reduction. Eligible landlords will be able to apply for a land tax concession of up to 25 per cent of their 2020 (calendar year) land tax liability on relevant properties.

The Key measures in the code of conduct are:

• Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code.

• A ban on the termination of a lease for non-payment of rent.

• A freeze in rent increases.

This policy will apply to business tenants with a turnover of less than $50 million that experience a 30 per cent (or more) reduction in revenue as a result of the COVID-19 pandemic, in line with the Prime Minister’s announcement on 7 April.

The Government has ordered a six-month moratorium on new forced evictions if the tenant is in rental arrears because they are suffering financial hardship due to COVID-19.

It applies to tenants who have lost 25 per cent or more of their income.

Eligible tenants will be protected from eviction until the National Civil and Administrative Tribunal is satisfied negotiations have concluded, with any unpaid rent to accrue as arrears in that time.

For more information please see the following NSW Government page here

More information on NSW State Government Financial Assistance measures generally for COVID-19 are also available via this link here

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