Posts Categorized: COVID-19 strategies
JobKeeper – unannounced details
JobKeeper was passed by by both houses of parliament yesterday.
But it is yet to be finalised.
The bill as passed gave Treasury the power to legislate the rules. They have yet to do so. On past experience, one would be concerned that they narrow the rules and prevent many intended recipients from receiving this crucial stimuli.
We also await details as to what discretionary powers the ATO will give themselves.
We will post as soon as we have clarity on exactly how this system will operate.
Zoom meeting security
If you are like us, we are now using Zoom so much more than ever before.
If so, you should be concerned about the security of Zoom Meetings.
It is not that difficult to randomly guess the web address of a Zoom meeting given the relatively short identifying number.
They have been many stories circulating about Zoom meetings being bombed by some uninvited “guest.”
That is unfortunate as Zoom has a built in security feature which enables entry into a meeting only after entering a password.
We use this feature when inviting guests.
If you are new to Zoom, you might also appreciate the following tips:-
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Ask your attendee to log in at least 3 minutes beforehand.
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Sit in a well lit area.
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If there is a number in the meeting, consider turning your microphone and video off to avoid dropping out.
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If connecting via your laptop, have it plugged in.
Lodgments and ATO assistance
It is critical that you keep:-
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Lodging activity statements.
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Reporting under Single Touch Payroll
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Meet your super guarantee obligations
Whilst there are various forms of relief available, you are still required to meet all your ATO compliance obligations.
And whilst there are payment extensions to a certain ATO taxes or some are being waived, there is no extension in regard to employee super. It is also important to note that the two-part penalty of a 200% penalty and non-deductibility of anything paid late remains in place.
Paying employee’s super has always been a business’s number one obligation; now even more so!
The deadline for reporting and paying March quarter superannuation is April 28. As some clearing houses take up to 8 business days to pass on any payment into a super fund, we strongly recommend paying the super by this time next week.
The stimulus packages include such concessions being able to vary the March quarter PAYG instalment to nil (and claim back any instalments paid for the September and December quarters), not paying January to June PAYG withholding and up to a six-month deferral for paying bases, tax shortfalls & FBT liabilities.
We remind you not to lodge your March quarter BAS without speaking with us first.
We take this opportunity to remind you to return to this web page for daily blogs on a variety of short videos and business survival tips (including health and well being).
As we are all in this together, we are determined to help as many business owners as possible. We would therefore appreciate you passing on a link to any article you find of interest to your team, family, friends and business associates.
Commercial rent relief
Next to wages relief, small business are crying out for commercial rent relief.
Following Friday’s brief announcement, the Prime Minister today stated that there would be a mandatory code which will apply where either the landlord or tenant qualifies for the JobKeeper payment.
So if you are a tenant, your turnover has to fall by 30%.
You don’t qualify if your turnover has only fallen by 25% from the same period last year.
This is a most difficult initiative to get up as it requires passing by each state government.
Keep an eye for updates.
Can I keep my business open?
Can I keep my business open? It is understandably a very common question.
Essential businesses can stay open. Non-essential businesses can’t.
So what is a non-essential business?
You can find out by reading the Victorian state government direction order which you can access:-
We take this opportunity to remind you to return to this web page for daily blogs on a variety of short videos and business survival tips (including health and well being).
As we are all in this together, we are determined to help as many business owners as possible. We would therefore appreciate you passing on a link to any article you find of interest to your team, family, friends and business associates.
End of instant asset write-off
If one incentive had clients jumping the last couple of years it was the instant asset write-off. Particularly last year when the limit was increased to $25,000 and then to $30,000.
As part of the stimulus measures, it has now been increased to $150,000 to 30th June 2020. And the small business threshold has been removed. A business with turnover of less than $500,000,000 can now use this concession!
In today’s environment, using this incentive may not be possible for many.
But beware!
From 1st July 2020, the instant asset write-off is set to reduce to only $1,000.
So as tough as things are, consideration should be given to buying needed business assets now to bring forward tax deductions. Not only will this save on income tax, it will have a flow on effect with reduced PAYG Instalments payable through 2020/21. We are not saying buy assets willy-nilly; we are simply saying seriously analyse the impact rather than dismiss it as a knee jerk reaction.
You might also find that you get good deals over the next few months.
Who else should consider this?
Those selling major assets to larger businesses. They might well have the cash flow to acquire assets others can’t. Make sure you tell them about this incentive. With much noise and unprecedented rapid, change, they may not be aware. You might be doing them a favour by telling them.
Register for #1
There are a number of benefits and stimulus incentives that business owners should register for ASAP.
#1 would be to register for the JobKeeper scheme.
Even if you think you don’t qualify or don’t qualify based off March 2020, we recommend registering now.
You can do so at :-
https://www.ato.gov.au/general/gen/JobKeeper-payment/
Please return to our web site for other suggested registrations and new stimulus benefits as they arise.
We are also welcome any query you may have.
JobKeeper – the top 10 unanswered questions
Let me begin by saying I appreciate have very difficult it is for the government to deal with this unfolding mess. There is simply not enough hours in the day to devise stimuluses, implement them and if doing so, consider all the nuances.
And as with any change, there are many unintended consequences.
The JobKeeper incentive was a terrific initiative to keep people employed.
However, there are many unresolved questions. Even after the release of a second Treasury fact sheet.
The JobKeeper incentive relies on two key sources of information:-
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Reported payroll numbers. This will undoubtedly be through Single Touch Payroll but extra reporting is required.
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Demonstrating to the ATO that turnover has fallen by 30% or more. It appears that the reporting mechanism will be through the BAS (which is quarterly for most people).
10 of the biggest unresolved aspects are:-
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Whilst the back end of March has been terrible from many businesses, the first few weeks were okay. This means that many businesses will not qualify for the month of March which is when the program commences. So if they do qualify in April, they won’t receive anything until the June BAS is lodged?
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Most businesses report GST on a cash basis. Cash is received after a sale is made. If their sales have fallen, then the BAS won’t reflect that.
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The ATO though can exercise its discretion (never favourably it seems). They might require such simple things as sales data – or more. They could be quite intrusive. It will cost time and money providing this information. It will undoubtedly cause delays. It will be some time before they pay out.
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It should be noted that companies report gross income when they pay PAYG Instalments. But not all company must make profits. Moreover, trusts and partnerships do not report income – so they will have to provide additional information.
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It is unclear whether businesses that are part of a group are assessed in their own name or as part of that group.
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How about a service trust? Are they assessed as part of a group with the actual business or assessed in their own right?
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Will there be integrity rules? If so, will they disqualify more than half of all small businesses as did the PAYG WH concessions?
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It appears that you have to satisfy the 30% reduction in income from the year before on a month by month basis. But what about those businesses which were affected by seasonal factors and 2019?
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The initial fact sheet indicated that a sole trader that employs would miss out. How is that fair? You reckon that would have been fixed by the second fact sheet but it hasn’t.
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It is already been made clear that SG super need only be paid on the employees ordinarily wage – so if their normal wage is $1,000, super need only be paid on that amount; not on the $1,500 received. But neither WorkCover nor the State Revenue Office (Pay-roll Tax) has stated whether they will levy on the actual wage or the boosted amount.
There are many more unanswered questions anomalies and unfair outcomes. Hopefully all of these are resolved before Wednesday – that is when Parliament has been recalled to sit and pass this legislation.
We will keep you posted so please return is webpage for more updates and other blogs.
In the meantime, we are happy to answer any question you may have.
Commercial rent relief
Perhaps the biggest economic issue to address and the hardest to solve is that of commercial rent relief.
It is one thing to pay pensioners their $750 bonus. They are in a database in which their bank account details are recorded. It is no more than a pay run.
The Cash Flow Boost (PAYG Withholding concession) requires the ATO to adjust their systems so credits can be allocated within a month; mind you Treasury has decided to scope out more than half of small business.
However commercial tenancies are a different creature.
There is no central register. No one knows who all the landlords and tenants are. No one knows what the rents are. Tenants are in quite varying situations. All landlords rely on their rents; in some cases, it is the only form of income for some people.
It is therefore with great relief that I heard that Prime Minister Morrison today announce that there will be a mandatory code established. Further announcements will be made next week.
It appears to qualify, a business must be part of the JobKeeper program. That should keep you busy for most of the weekend – working out whether you do or don’t qualify for JobKeeper.
We will keep you posted as further details on commercial rent relief come to hand.
Small business rights and obligations
The COVID-19 pandemic has certainly raised a number of issues. Many issues have never previously had to be addressed. Small business owners therefore need to be aware of their small business rights and obligations.
In response to the current situation, the Australian Competition & Consumer Commission (ACCC) have published a reminder to small businesses as to their rights and obligations under Australian Consumer Law. In particular, it addresses:-
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Cancelled functions and events.
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Pricing of goods and services.
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Charging subscriptions and membership fees when a business is not operating.
To read more, please click on the following link:-
https://www.accc.gov.au/business/covid-19-coronavirus-information-for-small-business
We welcome any COVID-19 query you may have in relation to small business rights and obligations. In the meantime, we are working through individual business client’s positions on a one on one basis.