Posts Categorized: General

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:-

  • Reported payroll numbers. This will undoubtedly be through Single Touch Payroll but extra reporting is required.

  • 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:-

  1. 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?

  2. 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.

  3. 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.

  4. 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.

  5. It is unclear whether businesses that are part of a group are assessed in their own name or as part of that group.

  6. How about a service trust?  Are they assessed as part of a group with the actual business or assessed in their own right?

  7. Will there be integrity rules?  If so, will they disqualify more than half of all small businesses as did the PAYG WH concessions?

  8. 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?

  9. 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.

  10. 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:-

  • Cancelled functions and events.

  • Pricing of goods and services.

  • 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.

 

Tips for working from home

COVID-19 now sees a staggering number of people working from home.  One just has to see how few people are driving to work in the morning!

However working from home does present some challenges.  In particular, many must be working in poorly set out working areas that may already be causing discomfort and harm.

I have therefore asked Jeremy Balbin from Centre4Health to provide some tips.

I highly recommend Jeremy to you.  Jeremy has done a terrific job loosening up both my neck and middle back as my recently lower golf scores can attest.

You can check out his tips at:-

https://www.facebook.com/centre4healthau/photos/a.239635736669008/547985702500675/?type=3&theater

You can read more about Jeremy and his team at https://centre4health.com.au/our-team

How can I benefit from all the stimulus packages?

How can I benefit from all the stimulus packages is understandably the most common question we receiving at the moment.  Stimulus packages and other relief concessions are coming thick and fast from both the Federal and State governments. 

In such tough times, any dollar which comes back in the door is welcome!

We are selectively working through all these opportunities as we undergo planning sessions with our business clients.

We are happy to answer any question you may have.  In the meantime though you may wish to read about every offer on the table within the summary that can be found at https://tinyurl.com/s7bxqh5

We subscribe to a number of research house services.  One of those houses provided the attached white labelled report which we are allowed to include our details.  Everything else we write is ours!

Whilst many are focused on what concessions they can receive, absolute focus must be centered on how the business is likely to perform in the coming months and what can be done about.  In this regard, we encourage you to read all the blogs.  In particular,  watch the short videos posted within this section.

 

Free credits with Google

Google will provide up to $800,000,000 of  those affected by COVID-19. 

Google will donate $250m to the World Health Organisation.

Most of the rest will take the form of advertising credits to those that have advertised with Google in the last 12 months.  Check your balance.  You may have a large credit there ready to use!

JobKeeper payment

The JobKeeper scheme was announced late yesterday.  It provides for government funded fortnightly payments of $1,500 to eligible employees.

You can read more by clicking on the following link to access the Treasury fact sheet:-

https://tinyurl.com/vouhffq

Important points to notify are:-

How do you qualify?

A small business will qualify if turnover has fallen by more than 30% compared to the same month last year.

What do you need to do now

Register which you can do at:-

https://www.ato.gov.au/general/gen/JobKeeper-payment/

What you will need to do going forward
  • Supply to the ATO employee details as at 1st March 2020.

  • Notify all employees

Fine detail

A number of questions arise such as:-

  • What is the position for employees of a new business?

  • What if the first half of March was OK? 

The fine details will come so please return to read updates.

 

New employer stimulus

Another stimulus is currently being announced!  The Prime Minister and Treasurer are currently answering questions on a new employer stimulus package.

Please return to this page for further details as they are revealed.

It is also pleasing to her that the Centrelink partner income threshold to be increased from $48,000 to $79,000.

 

Relief to SMSF property owners

Thankfully the ATO is on record as to providing relief to SMSF property owners.

In today’s climate, many landlords are reducing the rent to help retain tenants. 

However, there has been concern that a self managed super fund charging less than market rent on a commercial property to a related party would still constitute to a breach/contravention.

The ATO has now stated that they will not take action against a temporary rental reduction in either the remainder of this 2019/20 year or 2020/21.

So what is an acceptable rental reduction? 

That remains to be seen and should be monitored.  However, the most common story over the last two weeks seems to be that rents are being reduced by between a third and a half.

 

How long can you last without customers (1 minute video)?

How long can you last without customers? 

It is a question most businesses are asking at the moment.

And it is one that keeps people awake.

We can show how long you can last – click on the following video to see an example.

https://www.loom.com/share/588fb889519e4eb19a853f6adc097976

Moreover, we can show the outcome from changing multiple drivers in your business.

So don’t like awake at night worrying; replace worry and fear for a predictable future.  And there’s nothing to fear from the meeting itself as we use Zoom Meetings.