Posts Categorized: COVID-19 strategies

Lockdown #4 state assistance

The Victorian State Government today announced it will provide assistance to those most affected by this current lockdown.

There will not be across the board assistance to all businesses; just to those most affected.

Brief details have been announced about 3 programs:-

Licensed Hospitality Venue Fund 2021 – under which $3,500 will be paid to each venue holding an eligible licence and food certificate.
Business Costs Assistance Program – $2,500 will be paid businesses operating in industries that cannot work during the current lockdown and cannot operate remotely.
Victorian Events Support Package – $20 million will be set aside to support operators in the events industry. Further details are to be released.

It would be inappropriate not to point out that such financial support will not cover the losses for many business owners. There would be many restaurants that have been forced to throw out $5,000+ of food. It’s a straight hit to the bottom line when not being able to earn any income. And it comes on top of the losses from the Valentine’s Day lockdown and the lockdowns last year. So get out there and support your local restaurants and indeed small businesses.

What can you do now?

Applications will open on Wednesday 2^nd June. You can however register for the Business Victoria Update newsletter – to do so click here.

We will keep you updated. Please though don’t hesitate to ask us any question you may have.

A quick lockdown update

So back into lockdown we go!

We are most sympathetic to those businesses that will suffer financially from this latest lockdown, particularly those in entertainment and hospitality.

The Maggs Reid team is now all back at home but thankfully due to modern technology, will be able to operate almost normally. We do ask that you contact us by e-mail during this time.

Financial assistance

The state government is yet to announce any financial assistance to small businesses. Please be assured that we will update you as soon as details are announced – but judging by one minister’s comments this morning, that, for unknown reasons that surprise me, won’t be until next week.

Compulsory QR codes

As a generalisation, businesses that deal with the public are now required to track visitors to their business electronically by using the government’s free QR service. Such businesses could use other QR services from 30^th April, but as of today, must use the government QR service. You can read more at – https://www.coronavirus.vic.gov.au/about-victorian-government-qr-code-service. Although we are not one stated industries that must use a QR system, we have adopted one as of yesterday as we believe it is a better system than manual sheets.

Survive and Thrive webinar

I take this opportunity to remind you that the next Survive and Thrive webinar will be held on Wednesday 9^th June at 5:30 PM. This month, we will address tax planning actions required before the end of the year. And I’m sure all business owners will be interested in our guest speakers presentation on three legal common traps for small business owners. You can book your place at – https://us02web.zoom.us/webinar/register/WN_l5ZhIapvTTqDqoKSSKStxg

Tax lodgements

Like all accountants, the demands of JobKeeper, rent relief applications, Land Tax applications, JobMaker, cash flow preparations to support loan applications and so on have meant that we are still to finalise and lodge a number of 2020 Tax Returns. In fact that my accounting discussion group meeting on Wednesday night, no accountant, not one, managed to meet the required 85% lodgement deadline of last week. Please do not be concerned as the ATO are tolerant and are rubber stamping all extension requests. In managing our lodgement listing, we are cognisant of people’s positions and are prioritising those matters that require early retention. We do appreciate your ongoing patience in he most unusual period.

Portal improvement

I should again state that we have been preparing 2020 Tax Returns using new software; software that talks to other programs. As part of this process we have been able to adopt better client portal and digital signing software. What this also means is that the existing portal will be inaccessible after 30^th June. We assure you that we of course have copies of everything we have dropped into your portal. We have also saved copies of any documents that you have dropped into your portal. You may though wish to retrieve any document you want at your electronic finger tips.

Stay safe and we look forward to seeing you soon.

Survive & thrive webinar

As we head into a brave new post-JobKeeper world, there is much to keep abreast of.

So our Survive & Thrive webinars are back!

About the Webinar

In our next 25 minute webinar we will

Update you on actions required in May (including new rules for those who employ casuals).
With a hot property market, our guest speaker Martin Ryan will explain recent property loan developments.
And our case study will explore the peril of selling to customers who may not be able to pay you. This has never been so important now that so many business don’t have the JobKeeper financial safety net.

We will also feature special client offerings – and one will of great interest to many.

The webinar will run from 5.30pm, so grab a cup of tea (or beer) and tune in.

And if you away from your home or office, you can still watch it on your phone.

You can register by clicking here

We do hope you can join us on Wednesday, 5th May at 5.30 pm

JobKeeper reminder & reality check

We will start with an important reminder to meet your turnover reporting obligation in order to receive your February JobKeeper entitlement by this coming Friday. This means you have to report the actual GST turnover for the month of February and what you think it will be for March.

And with JobKeeper due to conclude with the fortnight ending 28^th March, this is the second last time you or your accountant will need to complete this task.

The bigger issue though on the horizon is what happens when JobKeeper ends?

Whilst the drop in the unemployment rate and growth in the GDP rate have been welcome, come April small businesses will be on their own. There is no (as yet but will there be?) targeted assistance to those industries decimated by covid.

So the four biggest questions you face are?

How will your business survive?
How will the businesses of your customers and suppliers survive?
And have you, your customers and suppliers addressed the impact of the end of rental relief? And not only may you soon be paying full rent, what about the portion of relief that was deferred?
And are your financiers going to continue to support you?

And with cash flow being the life blood of any business you need to understand what the impact starting in as soon as 3 weeks. Some accounting software providers market their cash flow capabilities, but it is very simple and for the immediate short term.

We however have advanced software which can:-

Model out various post 28^th March scenarios.
Show the cash flow peaks and troughs in the months ahead.

And with our many years of collective experience of working with all sorts of industries, we are able to provide recommendations as to how to rectify and improve what is predicted to unfold.

Our first meeting with clients is free of cost or obligation and we welcome your call.

Can you benefit from the new Vic Govt support package?

Yesterday the State Government announced its Circuit Breaker Action Business Support Package.

Unlike past support packages, there is no general entitlement.

The relief is targeted to industries most affected but the snap lockdown:-

Licensed hospitality venues who have already received a grant through the Licensed Hospitality Fund will be entitled to a $3,000 grant.
Accommodation Support Program has two tiers of funding ($2,250 and $4,500) dependent on the number of cancelled nights. It is an expansion of the existing Regional Tourism Accommodation Support Program and also includes greater Melbourne.
An expansion of the Travel Voucher Scheme. A further 10,000 regional vouchers will be issued as well as 40,000 travel vouchers for greater Melbourne.

There will also be a Business Costs Assistance Program for those with annual payroll under $3,000,000. Full details are yet to be released.

You can register your interest in applying for the Victorian Accommodation Support Program at https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/circuit-breaker-action-business-support-package/victorian-accommodation-support-program

We welcome any question you may have.

Can your business benefit from JobMaker

JobMaker is an additional incentive which was announced in the October Federal Budget. Employers will be paid a generous incentive which take on additional young employees between October 2020 and October 2021.

JobMaker payments will be paid quarterly and will start from February.

Payments will made for up to 12 months from an employee’s start date. This means entitlements run through to September 2022 for those employees employed as late as September 2021.

Registrations opened on 7^th December and you need to be registered by 30th April. Those employers who would have been entitled to claim JobMaker will miss out on 3 months of payments if not registered by then. That could be as much as $2,600 per qualifying employee!

Registered employers will receive:-

$200 per week for each eligible employee aged between 16 and 29
$100 per week for each eligible employee aged between 29 and 35

JobMaker is not available to employers who are receiving JobKeeper.

To qualify, employers must:-

Have an ABN
Up to date with tax lodgements
Registered for PAYG WH
Be reporting through Single Touch Payroll
Have employed an additional employee – and not just replaced one employee with another
Had an increase in the payroll amount.

Qualifying employees must have been in receipt of JobSeeker, Youth Allowance or Parenting Payment for at least one month of the three months preceding their being employed. They must also have worked an average of 20 hours per week.

There are many other criteria and considerations. Please fill in the contact form if you would like a copy of our JobMaker white paper.

We welcome any questions you may have.

And like JobKeeper you have to register to receive anything so don’t let this opportunity, or moreover the money, pass you by.

Main outtakes from Victorian State Budget

During the week the Victorian State Government handed down is budget.

It has been pitched as an incentive budget. Most of the breaks go to property. In part this is not surprising given its political appeal and that it has a great multiplier effect through the economy.

Property incentives:-

50% reduction in Stamp Duty for the acquisition of newly constructed property costing up to $1,000,000.
25% reduction in Stamp Duty for the acquisition of existing property costing up to $1,000,000.
This reduction is additional to the first home buyers concession.
And we remind you that there is also the previously announced 50% Stamp Duty reduction on the purchase of commercial properties.
Also announced was a 50% Land Tax discount for build to rent developments.

Pay-roll Tax relief:-

Employers with remuneration under $10,000,000 will receive a 10% credit for the 2020/21 and 2021/22.
From 2021/22, the monthly payment threshold will increase from $40,000 of pay-roll tax to $100,000.
There will also be 10% credit (capped at $10,000) for those employers who increase their wages by $100,000 during 2020/21 and/or 2021/22.
Unfortunately the threshold in Victoria will remain at $650,000. All other Victorian states and territories have thresholds of $1,000,000 to $2,000,000 before they levy Pay-roll Tax. This seems a significant disincentive to employ in Victoria, particularly for those Murray River border towns.

We welcome any question you may have about the State Budget or any other matter.

Fair Work Australia relaxations for JobKeeper employers

First the background and then the good news.

Employers who qualified for the initial JobKeeper system were able to avail themselves of relaxed Fair Work Australia provisions.

Such employers were able to:-

Stand down employees.
Direct employees to change duties or work location.
Change their days of work.
Request employees to take annual leave at half rate.

The good news for employers still doing it tough (as in they qualify for JobKeeper past 27^th September) is that all but the fourth relaxation can still be utilised.

So employers who have qualified for JobKeeper for this December quarter can use these concessions until 28^th February 2021.

But there is good news for some employers who dropped out of JobKeeper after 27^th September.

Such employers who suffered at least a 10% decline in turnover for the September 2020 quarter can continue to apply these concessions. Such employers are called legacy employers.

But it is not automatic. Such employers must:-

Have a certificate completed by their accountant or
For small businesses with less than 15 employees, complete a statutory declaration.

You can access a statutory declaration here.

That’s the short story. There are a number of other requirements and paperwork to attend to.

If you want to know more then please ask us.

Wages & JobKeeper trap

The cuts announced in the Federal Budget to personal income taxes were well covered in the press.

Not so well publicised was an inadvertent trap that many small businesses may fall into.

Those tax cuts are now law. Over recent days, cloud software providers have been migrating new tax scales into their cloud programs.

The trap is that employers who receive JobKeeper can’t continue to pay the same amount. Those employers paying tier 2 employees the minimum gross wage of $750 now have to pay $746 after tax and not $742 (as it was last fortnight). It doesn’t sound like much. But it means the world as an employer has to pay the base amount. If they do, they satisfy the wage condition and only then are entitled to receive JobKeeper.

So what if you have already paid employees for the fortnight ending Sunday 25^th October?

Don’t panic.

Employers have until Friday 30^th October to ensure they have met the minimum wage condition for these first two fortnights of JobKeeper Extension period 1.

What if I am on a desktop accounting program?

Then you are going to need to install an update. We can attend to this if you wish.

Want to know more about JobKeeper? Then check our other posts including:-

10 key actions to claim JobKeeper V2.

Missed out on JobKeeper – may be not

We also welcome any other other question you have.

Missed out on JobKeeper – may be not

To qualify for JobKeeper, you have to satisfy a decline in turnover. That can be either under the basic test or under one of the seven alternative tests.

The problem with both the basic and alternative tests as announced is that they don’t take into account extenuating circumstances in the comparative period.

We are therefore pleased to see the ATO today released a further alternative decline in turnover test.

This additional test applies where a business temporarily ceased trading in the comparative period and did so due to:-

an event or circumstance outside the ordinary course of the business and
trading temporary ceased for at least a week and
some or part of that closure period occurred during the comparative period and
the business resume trading before September 28, 2020.

If all of these four conditions are satisfied, then a business that qualified for JobKeeper V1 gets to test their decline in turnover against the September 2018 quarter. If a business did not qualify for JobKeeper version 1 then it can compare October 2020 to October 2018.

So what is an event or circumstance outside the ordinary course of the business?

The one event that comes to mind from the September 2019 quarter was the bushfires through New South Wales and Queensland.

Maybe your business suffered from an event that would allow you to qualify?

Qualifying for JobKeeper is not just about receiving JobKeeper. In Victoria, JobKeeper recipients can also apply for commercial rent relief and possibly the latest state business boost grant.

If you reckon you can qualify under this new test or have any other queries, we would be happy to assist.