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Covid-19 support

2021 NSW COVID-19 Support – Business

Support Type Support Content For Period Eligibility Evidence Application
2021 COVID-19 business grant * $7,500 for a decline of 30% or more
* $10,500 for a decline of 50% or more
* $15,000 for a decline of 70% or more.
26 Jun 2021 – 17 Jul 2021 * have an active Australian Business Number (ABN)
* demonstrate your business was operating in NSW as at 1 June 2021
* have had total annual Australian wages of $10 million or less as at 1 July 2020
* have had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020
* demonstrate your business has experienced a decline in turnover of 30% or more due to Public Health Order over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to the same period in 2019 or the same period in 2020 or the 2 weeks immediately prior to any restrictions, 12 June to 25 June 2021;
* have business costs for which there is no other government support available
* maintain your employee headcount as at 13 July 2021. See the guidelines for definitions.  
If your business is on the highly impacted industries list, you’ll be required to:
* declare that you meet the eligibility criteria
* have business costs for which there is no other government support available
* provide details of your qualified accountant, registered tax agent or registered BAS agent
* submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020
* lodge other supporting documents as required to demonstrate you meet the eligibility criteria.

If you’re eligible for the $15,000 grant, to receive the full amount, you must submit evidence that you experienced the relevant decline in turnover in the specified period. See the guidelines for more information.

If your business is not on the highly impacted industries list, you must:
* declare that you meet the eligibility criteria
* have business costs for which there is no other government support available
* submit evidence that you experienced the relevant decline in turnover in the specified period
* submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020
* lodge other supporting documents as required to demonstrate you meet the eligibility criteria.

To show evidence of this decline in turnover, you’ll need to submit a letter from a qualified accountant, registered tax agent or registered BAS agent, using the template provided.    
Open: 19 Jul 2021   Close:13 Sep 2021
Click to Apply
JobSaver payment The payment will be equivalent to 40% of the weekly payroll for work performed in NSW:
* minimum payment will be $1,500 per week
* maximum payment will be $100,000 per week.

Weekly payroll should generally be determined by referring to the most recent Business Activity Statement (BAS) provided to the Australian Taxation Office (ATO) before 26 June 2021 for the 2020-21 financial year.

If you’re a non-employing business, such as a sole trader, you may be eligible to receive a payment of $1,000 per week.  
18 Jul 2021 onwards * they have an Australian Business Number (ABN) and were operating in New South Wales on 1 June 2021;
* they had a national aggregated annual turnover of between $75,000 and $250 million (inclusive) for the year ended 30 June 2020;
* they experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June), compared to the same period in 2019 or the same period in 2020 or the 2 weeks immediately prior to any restrictions, 12 June to 25 June 2021;
* for employing businesses, they maintain their employee headcount on 13 July 2021 while they continue to receive JobSaver payments (businesses that do not maintain the declared headcount must notify Service NSW); and
* for non-employing businesses, the business receiving payments must be the primary income source for the associated person. Individuals with more than one non-employing business may only claim payments for one business.

Certain entities, such as those earning passive income (rents, interest, or dividends), government agencies, local governments, banks, and universities are not eligible for JobSaver. See the full list of ineligible businesses in the guidelines.

Non-employing businesses are not eligible for the JobSaver payment if anyone associated with the business or who derives income from it, has received a Commonwealth COVID-19 Disaster Payment since 18 July 2021. 
If your business is on the highly impacted industries list, you’ll be required to:

* declare that you meet the eligibility criteria
* declare your employee headcount at 13 July 2021
* if you have employees, declare that you will maintain your employee headcount on 13 July 2021 for the period for which you will receive JobSaver payments. Service NSW must be notified if the headcount declines over the payment period
* if you do not have employees, declare that the business is the primary income source for the owner of the business
* submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover between $75,000 and $250 million (inclusive) for the year ended 30 June 2020
* provide details of your qualified accountant, registered tax agent or registered BAS agent
* provide evidence of weekly payroll
* lodge other supporting documents as required to demonstrate you meet the eligibility criteria.

If your business is not on the highly impacted industries list, in addition to the evidence requirements outlined above, you’ll need to:
* submit a letter from a qualified accountant, registered tax agent or registered BAS agent, using the template provided, to demonstrate that you experienced a decline in turnover over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June) compared to the same period in 2019.  
Open: 26 Jul 2021   Close:18 Oct 2021  
Click to Apply

Once deemed eligible, businesses will receive automatic fortnightly payments. Businesses will not need to re-apply but must notify Service NSW if they are not maintaining the number of employees they had on 13 July 2021. Reductions in employee headcount resulting from circumstances outside the control of the employer (such as voluntary resignations, death of an employee) will not be taken as a reduction in employee headcount on 13 July.  

Payments will be made in arrears with the first payment backdated to 18 July.  
2021 COVID-19 micro-business grant Fortnightly payment of $1,500 26 Jun 2021 onwards * have an active Australian Business Number (ABN) registered in, or demonstrate your business was primarily operating in, NSW as at 1 June 2021
* have had aggregated annual turnover between $30,000 and $75,000 for the year ended 30 June 2020
* have experienced a decline in turnover of 30% or more due to the public health orders over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June 2021  and due to end 30 July 2021), compared to the same period in 2019
* have business costs for which no other government support is available
* have not applied for either the 2021 COVID-19 business grant or the JobSaver payment
* maintain your employee headcount as at 13 July 2021 while receiving payments from this grant, if you’re an employing business
* have this business as your primary income source, if you’re a non-employing business such as a sole trader.

Certain entities, including those primarily earning passive income (such as rents, interest or dividends) or those with an ABN registered after 1 June 2021, are not eligible for this grant. See the full list of ineligible businesses in Attachment A of the guidelines.

Non-employing businesses are not eligible to apply for this grant if anyone associated with the business or who derives income from it has received the Commonwealth COVID-19 disaster payment.

For employing businesses, your employees can receive Commonwealth COVID-19 disaster payments if you receive this grant. 

Businesses that received the $1,500 small business fees and charges rebate can apply for this grant.  
* declare that you meet the eligibility criteria
* submit evidence of: your business’ decline in turnover of 30% or more over a minimum 2-week period within the Greater Sydney lockdown; an aggregated annual turnover between $30,000 and $75,000 for the year ended 30 June 2020. 
* lodge other supporting documents, as required, to demonstrate you meet the eligibility criteria.

Where required, evidence must be in the form of a:
* letter from a qualified accountant, registered tax agent or registered BAS agent using the template provided, or
* business bank account statement, or
* business activity statement (BAS), or
* Australian income tax return or Notice of Assessment.  
Open: 26 Jul 2021  
Close:18 Oct 2021  
Click to Apply

When you submit your application, you’ll receive a confirmation email with your application reference number. If you do not receive this email within 5 minutes after completing your application, please check your junk mail folder, and then call 13 77 88  if you’re still unable to locate the email.

After your application is received, it will be reviewed by Service NSW. They’ll contact you if they need additional information to support your application. If your application is approved, they’ll transfer funds to your specified bank account within 5 business days from the approval date.  
Payroll tax concessions * 25% reduction in 2021-22 payroll tax where there is a 30% decline in turnover.
* The due date for lodgement and payment of the 2021 annual reconciliation has been extended to 7 October 2021 
* customers have the option of deferring their payments for the July and August 2021 return periods until 7 October 2021.
* deferred payments will also be eligible for an interest-free payment plan of up to 12 months.  
2021-2022 For 25% reduction in 2021-22 payroll tax
* A revenue decline of 30%.
* For businesses with Australian wages up to $10 million.

Other concessions apply to all business with payroll tax roll.
The 25% reduction policy will be available when it comes to the in 2021-22 payroll tax reconciliation.

Other policies will be advised by the end of September 2021
Revenue NSW
Land tax relief The land tax reduction will be the lesser of:
* the amount of rent reduction you provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or
* 100 per cent of the land tax attributable to the parcel of land leased to that tenant.  
1 Jul 2021 – 31 Dec 2021 To be eligible for relief on your 2021 land tax, you’ll need to: 
* be leasing property on your parcel of land to: 
1, a commercial tenant who has:  an annual turnover of up to $50 million, and is eligible for the: Micro-business COVID-19 Support Grant or 2021 COVID-19 NSW Business Grant and/or JobSaver scheme, or
2, a residential tenant who has lost 25% or more of household income due to COVID-19.  
* have reduced the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021
* have provided the rent reduction without any requirement for it to be paid back at a later date
* have a 2021 land tax liability attributable to the parcel of land where the rent reduction has been given.

If you’re not eligible for land tax relief you can request an extended payment arrangement for your land tax if necessary. 

Note: You can still apply for this period of land tax relief, even if you applied for any of the previous relief periods, provided you meet all the eligibility requirements.  
* details of all eligible tenants, including ABN/ACN for commercial tenants 
* evidence of:
1, your rental reduction for the 1 July to 31 December 2021 period. This can include:   copies of tenancy agreements proving rental reduction; rental ledgers; a letter from your property manager.
2, your commercial (if applicable) tenants’ eligibility to be approved for the: Micro-business COVID-19 Support Grant or 2021 COVID-19 NSW Business Grant and/or JobSaver scheme.
3, your residential tenants’ financial distress due to COVID-19 (if applicable). This can include one of the following: a statement from your tenant(s) explaining how they have been impacted by COVID-19; copies of written communication between you and the tenant(s); a letter from the property manager.

Note: You must have your tenants’ permission to share their information with Revenue NSW.    
Service NSW
Click to Apply  
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Elgibility of JobKeeper 2.0 has been further relaxed

Elgibility of JobKeeper 2.0 has been further relaxed

On 7 August, the Government modified the eligibility of JobKeeper Payment 2.0 (extended JobKeeper 1.0 to 28 March 2021), aiming to embrace more people and businesses who have been affected by the ongoing crisis. The change is in response to the undeniable second COVID-19 wave in Victoria, and the Government concerns the stricter requirement will shut out many people and business particularly based in Victoria.

So we will compare the modified version with the version issued on 21 July. For more information about the 21 July announced JobKeeper 2.0, please refer to our article JobKeeper and JobSeeker Have Been Extended.

Turnover Test

The same to the 21 July JobKeeper 2.0 announcement, businesses and Not-For-Profits are required to pass the turnover test in October 2020 and again in January 2021 to continue qualifying the JobKeeper Payment.

Contrary to the 21 July announcement – employers are required to demonstrate the decline in GST turnover for both their June and September quarter compared to the corresponding period in 2019, the 7 August relaxed announcement requested September quarter GST turnover decline only to be eligible for the upcoming JobKeeper 2.0 (28 September 2020 to 3 January 2021).

The same requirement will be applied to the second period of extended JobKeeper 2.0 (from 4 January 2021 to 28 March 2021). Now employers only need to reassess themselves based on the decline in the actual GST turnover of December quarter, compared to the corresponding period in 2019. Under the previously announced turnover test, employers would have to show a decline in GST turnover for June, September and December quarters of this year.

Eligibility relating to turnover test will remain the same as JobKeeper 1.0, businesses and Not-For-Profits have suffered either:

  • 50% drop or more (for aggregated turnover of $ 1 Billion or more)
  • 30% drop or more (for aggregated turnover less than $ 1 Billion)
  • 15% drop or more (for ACNC-registered charities excluding universities and schools)

Employee Eligibility

The 21 July announcement said Employee Eligibility test date is 01/03/2020, while the 7 August relaxed announcement makes Employee Eligibility test date either 01/03/2020 or 01/07/2020 to get more employees be qualified for JobKeeper 2.0. We believe the businesses have been suffering a lot from the pandemic and leading to their employees’ redundancy. The test date 01/07/2020 will make more new employees become eligible who got the job between March and July, which is quite necessary in the current situation.

Eligibility for JobKeeper 2.0:

  • Currently employed by the eligible employers (including stood-down or re-hired)
  • Employed by eligible employers (or one of the wholly owned entity)
    • The individual was either a full-time, part-time of fixed-term employee or
    • The individual was a long-term casual employee with at least 12 months service with the business as at 1 July 2020 and not a permanent employee of any other employer
  • On 1 July 2020, the individual was aged 18 or over (or if they were 16 or 17 years old and they were independent and not undertaking full-time study)
  • Were either:
    • an Australian Resident (under the meaning of Social Security Act 1991)
    • was an Australian Resident (as per Income Tax Assessment Act 1936) and held a Subclass 444 (special category) Visa as at 1 July 2020.
  • Did not receive any of the following government subsidies at any time during the JobKeeper fortnight:
    • government Parental Leave or Dad and Partner Pay under the Paid Parental Leave Act 2010 or
    • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

Please bear in mind, most of the business will assess their eligibility against the turnover and submit their application based on their quarterly BAS lodgement. However, normally the due date of quarterly BAS lodgement will be the end of the following month of each quarter. Therefore, employers should reassess their JobKeeper Eligibility in advance of the BAS deadline in order to meet the wage condition. The Commissioner may extend the time for meeting the wage requirement so that businesses have time to first confirm their JobKeeper eligibility, eg. ATO has notified the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 is allowed until 31 October 2020 for employers to meet the wage condition.

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JobKeeper and JobSeeker have been extended

JobKeeper and JobSeeker have been extended

Later last month, the government announced to extend JobKeeper Payment by six months to 28 March 2021 and the JobSeeker Payment to 31 December 2020. The extension is aiming to build up the confidence for economy recovery and continue to support the business and community. However, the government also make eligibility stricter for the sake to only provide assistance to individuals and businesses who are indeed highly impacted.

Changes of the extended JobKeeper

Two phases payment

From 28 September 2020 to 3 January 2021, Jobkeeper Payment will be:

  • $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, JobKeeper Payment will be:

  • $1000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
  • $650 per fortnight for other eligible employees and business participants.

Eligibility of employees stays the same as before, for more information please refer to our article The Second and Third Stimulus Package Plan – Which One Suits You.

Turnover Test for Extended JobKeeper

To be eligible for the extended JobKeeper Payment, business and Not-For-Profit are required to meet the current turnover test and in addition, they need to prove their actual turnover has been continuously significantly dropped down in the testing period. They have to apply and satisfy the requirements again in October 2020 and January 2021.

Business and Not-For-Profit need to demonstrate they have experienced a decline in turnover for June 2020 quarter (April, May, June) and September 2020 quarter (July, August, September) compared to the relevant quarters (usually the same quarter of last year) for the period 28 Sep 2020 to 3 Jan 2021 JobKeeper payment.

Similarly, to be eligible for the JobKeeper under the extension period 4 Jan 2021 to 28 Mar 2021, businesses and Not-For Profit should prove their actual turnover for June, September and December quarters 2020 are dramatically reduced compared to the relevant quarters (usually the same quarter of last year).

Test for decline in turnover remains the same, for more information please refer to article The Second and Third Stimulus Package Plan – Which One Suits You.

Changes of the extended JobSeeker

The temporary Coronavirus Supplement has also been extended from 25 September 2020 to 31 December 2020. However, the payment has been adjusted aligning with the gradually improved economy. The government will simultaneously update the associated policy to guide those people become more active in job seeking. 

Changes to the payment

From 25 September 2020 to 31 December 2020, the Coronavirus Supplement per fortnight will be reduced from $550 to $250. Effectively the JobSeeker payment rate will now be reduced from $1100 to $800 per fortnight.

The income free threshold to people on JobSeeker and Youth Allowance (other) will be increased from $106 for JobSeeker Payment and $143 for Youth Allowance (other) to $300 per fortnight for both and a phase out rate of $0.6 in every dollar of income over $300.

Eligibility

Eligibility for the payment will be changed too from 25 September 2020 to ensure the assistance has been delivered to people who need most as the economy recovers.

  • Means Testing – from 25 September 2020, means testing will be put in place in the following ways:
    • Asset testing for all payment for both existing and new recipients
    • the Liquid Assets Waiting Period (LAWP) for all payments will be reinstated
  • Partner income testing – from 25 September 2020, the partner income testing cap will be increased to $3086.11 per fortnight or $80238.89 per annum for individuals with no personal income. The taper rate will jump to $0.27 from $0.25, with the higher income cut-out a result of changes to income testing for JobSeeker Payment.
  • Expanded Criteria – JobSeeker Payment and Youth Allowance (other) criteria will continuously assist permanent employees who are stood down or lose their employment and sole traders, self-employed, casual workers and contractors who meet other tests until 31 December 2020.

From 4 August 2020, a mutual obligation requirement (temporarily suspend from 24 March 2020 to 8 June 2020) will be reintroduced, whereby jobseekers are required to undertake FOUR job searches a month. The penalty will apply to those who reject a job without a legitimated reason that has been provided through the program.

The reduced JobKeeper Payment may make some JobKeeper recipients entitled to JobSeeker Payment too. Therefore, the total benefits of extended JobKeeper recipients received may not necessarily reduce much. People who are affected may need to pay attention to the government on any further changes to JobKeeper and JobSeeker.

At Pitt Martin, we are here to be with you through this pandemic. Since the JobKeeper Scheme is released, we have announced to provide FREE assessment on the eligibility for the businesses. Please feel free to click the social media button on top to share this article with your friends and the ones around you to help more people in need.

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2021新财年的那些税务变化

Key Tax Changes for the New Financial Year 2021

2020 is already halfway and we are all heading into the new financial year. Despite there are quite many changes from the government stimulus package, there are still some key changes that we can take a look at for Financial Year 2021.

Reduced company tax rate from 1 July 2020

Firstly, from 1 July 2020, tax rate for small business under certain structure has been reduced to 26%.

Businesses such as companies, corporate unit trusts and publicly trading trusts with a turnover less than $50 million will be taxed at a rate of 26% in 2020-21. The tax rate 30% will continuously apply to all companies that are not eligible for lower company tax rate. Generally, the ones with a turnover more than $50m. The lower company tax rate will then reduce to 25% from the 2021-22 income year. Progressive changes to the company tax rate can be found below:

  2018-19 and 2019-20 2020-21 2021-22
* Base Rate Entities 27.5% 26% 25%
Other corporate tax entities 30% 30% 30%

*base rate entity is a company has an aggregated turnover less than $50m and 80% or less of their assessable income is passive income

Increased National Minimum Wage Rates

From 1 July 2020, the minimum wage has been increased by 1.75%

The Fair Work Ombudsman has staggered the increase into three stages:

The first group on 1 July 2020

  • Frontline healthcare and social assistance workers
  • Teachers and childcare workers
  • Other essential services

The second group on 1 November 2020

  • Construction
  • Manufacturing
  • A range of other industries

The third group on 1 February 2021

  • Accommodation and food services
  • Arts and recreation services
  • Aviation
  • Retail
  • Tourism

Please go to Fair Work Ombudsman Website (https://www.fairwork.gov.au/) for more information in regards to the affected industries.

For all other employees who are not covered by an award or employment agreement, they have to be paid at a minimum hourly rate of $19.84 or $753.8 per week. The changes will become effective from 1 July 2020.

Employers should ensure their employee receive at least the national minimum wage to avoid breaching any industrial and superannuation obligations.

Increase the flexibility of Parental Leave Pay for self-employed

Starting from 1 July 2020, adopting the Parental Leave Pay Planning announced by the government will provide parents more flexibility and choice.

The new measure introduces 30 days of flexible paid parental leave for self-employed and small business owners.

Before, parents are only eligible to claim paid parental leave of 18 weeks in one go. Now, the payment will include both:

  • A continuous paid parental leave period of up to 12 weeks and,
  • 30 flexible paid parental leave days

Parents can still get parental leave pay in a single continuous 18 weeks block. Alternatively, you can choose a shorter block of 12 weeks. You can then take the remaining flexible paid parental leave when it suits you. However, you must take the flexible paid parental leave days all before your child turns 2. For example, you work 5 days a week previously. Now you have your new born child. You can choose to take a continuous 12 weeks paid parental leave first, and work for three days a week and take a paid parental leave for the remaining 2 days.

If employees want to receive a flexible paid parental leave, they have to negotiate with their employers in regards to their paid leave period or back to work as a part-time. If you cannot make an agreement with your employers regarding your working arrangement, you have to take a continuous block of 18 weeks.

You can changes apply to the babies born on or after 1 July 2020 but the application for the flexible arrangement is opened from 1 April 2020.

Other changes from 1 July 2020

  • The instant assets write-off of $150,000 threshold for small business has been expanded to 31 December 2020.
  • Cents per kilometre for work purpose deduction has been increased from $0.68 to $0.72.
  • Capital gain tax exemption for non-resident for main residence will not be available unless you satisfy the life event test. Please refer to our article “CGT exemption on Main Residence is not any more to Foreign Resident” for more information.
  • Small businesses with employee less than 19 are required to finalise the payroll information through STP (Single Touch Payroll) system which was enforced from 1 July 2020. Please refer to “For All Business – Single Touch Payroll” for more information.

 In Pitt Martin, we keep our clients with government tax and policy updates so they won’t be disadvantaged by the obsolete legislation. Call us on 02 92213345 or email connect@pittmartin.com.au for this tax season.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

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Celebration

Happy New Financial Year

A new financial year is an important time for all kinds of businesses, from sole traders to big corporate. It is not only to meet your tax obligations with the Australian Taxation Office, but also the perfect time to plan for the next 12 months of your business.

There is certainly lots to do as a small business owner as you focus on year-end accounting and bookkeeping tasks besides some planning for the new financial year. To help you organise your financial records, Pitt Martin has put together a handy EOFY checklist for businesses.

  • You need to ensure your BAS lodgements are up-to-date and accurate. This is not only making it easier for you to finalise your financial statements but also avoid penalty from the ATO
  • You need to ensure your superannuation guarantee (SG) contributions are accurate and up to date. Please note that your March SG is due 28 April 2020 and if you have previous quarters outstanding, you need to act as soon as possible or contact your accountant and bookkeeper for guidance.
  • If you are reporting to the ATO via Single Touch Payroll (STP), you are exempt from lodging a PAYG payment summary (Group Certificate) annual report for the amount you’ve reported through STP and from providing payment summaries to your employees so long as you undertake the finalisation declaration by the appropriate date. Please note that you can finalise your employees’ EOFY payroll information through your STP enabled software as soon as you have reconciled the information. Otherwise, you have up until 31 July to do so. Your employees will be able to access their income statements via myGov under the employment tab. If they do not have a myGov account and cannot create one, or do not have a registered agent, you can direct them to contact ATO on 13 28 61.
  • You need to ensure that you keep records for at least 5 years, and they are compliant with the ATO requirements
  • If you prepared your bookkeeping during the year, please make sure you have your accountant to review the transactions and GST codes assigned to the Profit and Loss and Balance Sheet items to ensure you are lodging a correct BAS.
  • The stocktake of your inventory should be done by 30 June 2020, if your business carries stock. Any adjustment on stock quantities and wastage should be reflected in the 2020 accounts.
  • If you maintain an asset register for your business, you need to review with your accountant or bookkeeper and remove any assets that had been disposed of or write off. Speak to your accountant about the instant asset write-off that the government introduced as part of the Australian Government’s economic response to coronavirus.
  • You need to ensure the following have been completed and reflected in your Profit and Loss and Balance Sheet,
    • Bank accounts, petty cash, prepayments, credit cards, borrowing cost, loans, Chattel Mortgages, and Division 7A Loans are reconciled
    • Depreciation has been properly accounted up to 30 June 2020 in the Profit and Loss and Balance Sheet
    • Review your Debtors and Creditors balance to ensure the accuracy
    • GST and PAYG withholding accounts are reconciled to the June quarter BAS
    • Wages and Superannuation in the Profit and Loss are reconciled to the Payment Summaries.
    • Superannuation Payable in the Balance Sheet is reconciled to the June quarter superannuation guarantee contributions
    • Review the suspense account and ensure all amounts are allocated to the appropriate account
    • Ensure there have been no personal expenses claimed as business expenses

With many businesses facing unprecedented challenges from COVID-19, there is no better time for small business owners to start afresh and thinking about improving their current business performance.

We have included additional checklist which hopefully can help you improve your business performance and financial health going forward,

  • You need to revisit your business plan and adjust accordingly to provide a better and clearer direction for your business amid the pandemic. You need to think about what areas of your business do you want to improve? Your accountant can be an important resource to help you put in place a plan to get where you want your business to be.
  • You need to update your cash flow budgets for the next 12 months by comparing it to the actual performance. Cash flow is the lifeblood of your small business and needs to be looked at closely for your business to sustain. Review your pricing structure and if you need to raise your price, now is the best time to do. Again, your accountant will be able to assist in the pricing and cash flow budgets.
  • You need to review your business insurances or public liability to ensure you have a sufficient level of coverage
  • You need to review your financing arrangements to ensure that you have a better deal
  • You need to review your own personal insurances including life insurance and income protection insurance to ensure you have adequate coverage should your circumstances have changed
  • You need to review your health and safety policies and procedures to ensure your workplace is COVID Safe by following the guidance from the government for the safety plan.
  • If you are still using a spreadsheet or other manual accounting system, you might want to consider switching to cloud-based accounting software. Your accountant will be able to assist you with the transition.

In the face of uncertainty caused by the global pandemic, actions taken now can have an immediate impact on how quickly your business rebounds from the global downturn.

Pitt Martin Accountants and Tax Advisers are Xero qualified and Award-winning accountants and bookkeepers who can assist you and your business to improve your business performance and financial health moving forward.

If you know any small business owners who require an assistance in managing their bookkeeping and accounting, please do not hesitate to pass on our details or get in touch with our team on 02 9221 3345 or email connect@pittmartin.com.au

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住房建筑2.5万澳元现金补助常见问题的解答

Don’t Miss Out the $25K HomeBuilder Grant

Given the impact of Bushfire and COVID-19, Australia has entered into an economic recession first time in the last 30 years. Last a couple of weeks, we have witnessed the Federal Government announced that they have been working with States and Territories to offer a $25,000 HomeBuilder Grant between 4 June 2020 and 31 December 2020 for eligible owner occupiers and buyers including first home buyers.

Eligibility:

  • Natural person (not a company and trust)
  • Aged 18 years or older
  • An Australian Citizen (does not mention PR or New Zealand Citizen)
  • Income cap:
    • For Individuals, your earning should be $125,000 or less based on 2018-19 tax return or later
    • For couples, your combined earnings should be $200,000 or less based on 2018-19 tax return or later
  • can be either:
    • A new home worth less than $750,000 or
    • An existing home valued up to $1.5m, and the renovation contract should be between $150,000 and $750,000
  • The construction and renovation must be executed within three months of the contract date.

Dwelling types:

House, apartments, house and land package, off-the-plan, can be existing property renovation and new property. The scheme will not apply to owner builders or those who are planning to build a new home or renovate an existing home as an investment property.  

Eligibility for Renovation

Renovation fee is between $150,000 and $750,000. The existing property needs worth less than $1.5 million. The construction should be carried out by licensed contractors at arms-length price within three months after signing of the contract. The HomeBuilder Grants must be used for improving your accessibility, liveability, and safety, but not used for add-ons like tennis courts, swimming pool and detached sheds etc. Also, the terms of the contract should be reasonable and in line with the market requirements to prevent any fraud between builders and property owners from swindling grants.

Am I still eligible if I own a land?

  • If you own land with an existing dwelling on it and plan to demolish and rebuild your dwelling, this will be considered as substantial renovation as long as the upgraded work’s value is between $150,000 and $750,000, and the value of your existing dwelling (including land value) before the demolish does not exceed $1.5 million.
  • If you acquired a vacant land prior to 4 June 2020, you can build a new dwelling on it as long as the total cost of the dwelling plus the land value before construction is less than $750,000.

Can I apply now?

No. It can only apply after your State or Territory enters into a contact with Federal Government and open the channel for application. You will be notified by each State or Territory government in regard to the updates of application. 

Required documents:

Required documents may vary from different State or Territory for your application. However, at least the following documents are required:

  • Proof of identification
  • Contract with date and signature of you and your licensed builder
  • Copy of your builder’s registration or license (depending on your State or Territory)
  • Copy of your 2018-19 tax return to demonstrate your income meets income cap
  • Other documents including council approvals, building contracts and evidence of land value etc

More detailed documents require further notification from States or Territory government

If I have received First Home Owner Grant, am I still eligible for this HomeBuilder Grant?

Yes, you are. The Homebuilder Grant does not conflict with the First Home Owner Grant, Stamp Duty Concessions as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Do we have to pay tax on that?

No. This is a tax-free payment to you.

Call us on 0292213345 or email on connect@pittmartin.com.au for further details.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

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Don’t let coronavirus sink you and your business

Don’t let coronavirus sink you and your business

The last few months have shown a constant display of obscure challenges related to maintaining business during the COVID-19 pandemic for business owners and leaders everywhere. The latest obscure challenge is possibly the trickiest yet: how to cautiously recommence businesses after the government announced the major easing of coronavirus restrictions.

Businesses will be faced with many logistical details including how to maintain social distance, limit crowd size, and ensure spaces are cleaned thoroughly and regularly. It will take some time to lift the level of confidence in people to start visiting shops, restaurants, and other public venues. In such an uncertain and diverging environment, how can small businesses move forward and back to “business as usual”? There are many opportunities for us as business owners and leaders to unify and build this together amid the uncertainty.

Patience

Patience is not the ability to wait, but the ability to keep a good attitude while waiting. In today’s world, where technology has created the expectation that everything should move more quickly, patience becomes one of the rarest virtues. No one has the patience to wait for anything anymore. However, we need to be careful to not rush everything. We should be careful not to move faster than governments allow.

We should be patient with a timeline that might be slower than we anticipated; patient with a reopening process that might be awkward; patient with the line-up that we have to face when entering the shops; patient with our leaders feeling the pressure of this difficult situation; patient with one another as we are getting used to with the new normal. As hard as it will be to practice patience, we must be determined as it is unquestionable the second wave of Covid-19 cases, or a local outbreak would detrimentally impact businesses.

Humility

Humility is to have a student mindset and always be willing to learn new things. With so many changes in the world amid the pandemic, we need to quick to hear, slow to speak, and slow to anger. When you listen, it may slow down the process of consideration and planning, but it is worth it. We need to be humble to learn to adapt and to accept that things might not be the same as they used to be.

We need humility in how we react to the plans by the government leaders, even if we do not agree with every aspect of it. There is no definitive answer on how to do this well and everyone is just trying to do the best they can to get through this crisis. If we are willing to learn and adapt with all humility, we will be able to survive.

Service

This pandemic is affecting us individually, societally, and organisationally. During this pandemic, we all need to step up and be a leader to do what we can for the greater good. If you are fortunate enough to have cash in your pockets, you can use it to support other businesses. We need to think of ways we can serve our friends, family, neighbours, and community as a whole. We need to encourage “we” before “me” and show gratitude and compassion for others.

If you can make your business about helping others during this crisis, you will always have plenty of work because no one has ever become poor by giving. There is no better time than now to put the needs of others ahead of our own. Remember, success has nothing to do with what you gain in life or accomplish for yourself; it is what you do for others.

There is no need to panic. Tough times never last but tough people do. If we can all continue to show up as servant leaders with patience and humility to serve others, we can get through this uncertainty and crisis stronger than ever.

Don’t let this uncertainty sink your business, reach out for help not because you are weak, but because you want to remain strong.

Pitt Martin Accountants & Tax Advisers are Xero qualified and Award-winning accountants and bookkeepers for small businesses which can be reached on 02 9221 3345 or connect@pittmartin.com.au.

Our Vision
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解封当下,中小企业该如何重启并得到尽快恢复

How SME get recovered after the COVID-19

It has already been two months since the lockdown was in place. Earlier this month, Prime Minister Scott Morrison finally announced a “Three-Step” procedure to reopen Australia after the COVID-19, which is good news to all of us. Based on the data from Treasurer Josh Frydenberg, Australian has been losing more than $4 billion each week due to the lockdown, of which the largest portion has been attributed to the affected small and medium-sized business (SME). As the lockdown has been gradually lifted, how would SME self-adjust their business and catch up with the changing market in order to bring their business back to normal or even beyond?

  1. Get government subsidies and grants

First of all, the biggest issue that SME is facing at the moment is cashflow caused by the declined revenue. As cashflow is considered as the lifeline for any business, the shortage of cashflow may directly lead the business to insolvency. For now, the fastest and most efficient way to deal with the cashflow shortage is to apply for and get the government subsidies and grants. We have mentioned those subsidies and grants in our previous articles The second and third Stimulus Plan – Which one suits you? and How small and medium business benefit from the Stimulus Package? , such as JobKeeper Payment, Cash Flow Boost to employers and Apprentices and Trainees Wage Subsidy etc. These are the most effective approaches you can take currently to maximise your cashflow. For more federal and state stimulus measures, please click on our Internal Manual (https://pittmartin.us7.list-manage.com/track/click?u=7ef7c505bc2b5ac5d9125b1f2&id=8a6e991bbb&e=199892a471)。

Also, the Government Guaranteed Unsecured Finance for up to $250k provided by the bank is another feasible way to supplement the SME’s mid or long term cashflow.

In addition, all the tax liabilities incurred after 12 March, such as income tax, GST, FBT etc, can be deferred to 14 September. Companies that make good use of this relief can help with cashflow shortfalls without violating regulation to delay their tax lodgement.

2. Prepare for return to workplace

If you have already applied for the JobKeeper Payment, you should not worry too much about finding new employees which is the government initiative. Employees can return to work at any time to resume as usual. If you lose your employee for any reason such as you are not eligible for JobKeeper Payment, it is the time for you to consider recruiting or getting in touch with right candidate for the recovery.

After returning to work, business should actively respond to the preventive anti-epidemic measures, such as making employee and customer safety manual or post, keeping 1.5 meters social distance, maintaining 4 square metres of space per person and preparing hand sanitiser etc.

If your business was temporarily closed and you have been working from home since the lockdown, it is the time for you to get in touch with your suppliers and building manager of your workplace to ensure the goods, utilities supplies and office are operating as normal.

3. Have an effective communication with other parties

As a result of market changes caused by the outbreak, the personnel and department in the organisation may also need to be changed. For example, some departments may need more people while others may have to cut. Managers have to have an effective communication with affected employees to make sure personnel change is undertaken in a considerate and proper way.

For most of SME, rent is one of the biggest expenditures in their daily business. The Federal government as well as State government have issued the relevant law and code to ensure landlords to share a portion of the business loss. Therefore, affected business should reach out to their landlord in order to get some rental relief if they have not yet. If you decide to update or enter into a new lease with the landlord, you should take an advantage of the current market to get a better price and terms.

Given everyone is suffering from cashflow shortfall at the moment or in the near future, business should accelerate any necessary debt collection procedures to avoid further capital loss because of the potential future bad debt.

Businesses also have to review the contract with existing suppliers and customers and actively communicate with them to ensure the terms in the contract are updated in a timely manner to reflect the changed market.

4. Change your business plan and look for new opportunities

The current business plan and financial budget may no longer be applicable to the SME. An adjustable and flexible business plan and financial budget are the only guarantee for future recovery and success. Similarly, business who can adjust themselves in the changing market may have more opportunities. For example, lockdown increases the online demand and delivery. In the meantime, online meeting is becoming more acceptable during this period. Therefore, in future, some retail and hospitality business may consider expanding their take-away and IT-related business might intend to engage in online App Development or Video calls.

There is no doubt that there will be a long-term impact brought by this coronavirus pandemic. Business should take their long-term strategies into consideration when they make new business plan to ensure the new plan is more suitable for the changing market and prepare for the worst on the other hand.

Since the outbreak, we can deeply feel that clients, at any other time, never like now need our assistance and advice. At Pitt Martin, we strive to understand your business and put our feet in your shoes so we can be committed to delivering the best service we can to help you out during this tough time. Let us work together and bring your business and life back to normal as soon as possible! Call us on 02 92213345 or email connect@pittmartin.com.au.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

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It's 'TAX' time again

It’s ‘TAX’ time again

Tax time is fast approaching and for some of you this might be the last thing on your mind. There might be other things that are more important for you to get through this uncertainty. However, now is the best time to get your tax affair in order and avoid last minute planning that can cost you.

As you have spent more time working from home during the lockdown period, it might be a good idea to put together all the information you need to prepare your returns as it will take some time especially if you have not organised them as you go. You can collect all your receipts or invoices for work related expenses and any credit card statements for invoices that you no longer had and discuss with your tax agent to ensure you are maximising your claims.

If you have been working from home as a result of COVID-19, the Australian Taxation Office has introduced special arrangements which will allow people to claim 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses. You will need to keep a record of the number of hours you have worked from home. This will apply from March 1 to June 30, after which the ATO will review the arrangement for the next financial year.

If you choose to use the 80 cents per hour for all your running expenses, you can’t make other claims in relation to working from home because items such as mobile phone and internet are included in the 80 cent rate.

You still had the option to use the old claiming method which is known as the 52 cents per work hour method for claiming items such as heating, cooling, lighting, cleaning and the decline in value of office furniture. You need to keep a diary of when your start and finish work each day. This old method also allowed you to calculate the work-related portion of phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device. Nevertheless, you would still require to work out what private use and work use is on ‘a reasonable basis”

You can claim tools or equipment as a deduction in your tax return if you have to use them as part of your job and your employer didn’t reimburse you. You can claim a deduction straight away if the tools or equipment are $300 or less otherwise you will need to depreciate over the life of the item. On the other hand, if you run your own business and acquired all your capital items from 12 March 2020 and the cost of all of them less than $150,000, you can claim a deduction straight away. The capital items included work related IT equipment, cars and tools. Please note that you will still require to apportion the cost if you use them for private use.

As we are approaching the end of financial year, we still have plenty of time to generate some extra common tax deductions if you made the payment by 30 June:

  • Donation to a charity registered as a deductible gift recipient over $2 with a receipt are tax deductible
  • A personal contribution into your super fund including the contribution made on your behalf by your employer which are less than $25,000 can be claim as a tax deduction providing the payment made by 30 June. You need to advise your super fund by completing the relevant form or speak to your accountant for guidance.
  • You need to pay by 30 June your professional membership or subscriptions and union fees to claim the deduction this year

Remember that good record keeping including invoices and receipts will ensure the finalisation of your tax return easier and you can claim for everything you’re eligible to.

If you know anyone in your circle who need any assistance during tax time, please reach out to them because “We can’t help everyone, but everyone can help someone” and “Together We Can Make A Difference”

Pitt Martin Accountants & Tax Advisers is here to assist you and your business in time of crisis by contacting 02 9221 3345 or connect@pittmartin.com.au.

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澳洲政府重磅推出第二和第三刺激计划,哪一款政策适合你?

The Second and Third Stimulus Package Plan – Which One Suits You

Followed by the first Stimulus Package plan announced on 12th March 2020, the federal government has rolled out the second and third Stimulus Package plan with a total amount of up to 200 billion dollars in last two weeks aiming at helping small and medium business and keeping Australians in jobs. Let’s take a look at what are they for both business and individual and navigate one suits you.

For business

JobKeeper payment

The JobKeeper payment will assist employer to retain their employee and quickly re-start when the crisis is over. Affected employer will be able to claim the fortnightly payment of $1,500 per eligible employee from 30th March 2020. The first payment will be received on the first week of May, lasting for maximum of six months.

Eligibility for employer (including Not-For Profit):

  • Business turnover less than $1 billion PLUS turnover has been reduced by more than 30% (of at least one month compared to the same period of last year)
  • Business turnover more than $1 billion PLUS turnover has been reduced by more than 50% (of at least one month compared to the same period of last year)
  • The business is not subject to the Major Bank Levy

Eligible employee can be full-time, part-time and casuals (a casual employed on a regular basis for more than 12 months as at 1st March 2020). They must be an Australian citizen, Permanent Visa Holder, or a Special Category (Subclass 444) Visa Holder who is a Australian tax resident on 1 March 2020.

Self-employed individuals (Sole Trader) who meet the above turnover test are also eligible for JobKeeper Payments.

Register you interest and keep update with ATO.

Cash flow paid to eligible employers

As we mentioned in our previous article How small and medium business benefit from the Stimulus Package”, eligible employers have the entitlement to claim equal to 50% of the PAYG Withholding amount with a minimum of $2000 and maximum of $25,000 even the withholding amount is nil. At this second package plan, the figures are lifted up to 100% cashback on PAYG Withholding, with an increased minimum payment of $20,000 and maximum payment of $100,000.

The cash payment will be provided in two phases. The ATO will automatically credit the first phase amount (from $10,000 to $50,000) to the tax payer’s ATO account after the BAS or IAS lodgement from 28th April 2020. Different cycle tax payer will be paid upon the lodgement as below:

  • Quarterly lodgers – March 2020 quarter (due on 28th April 2020), and June 2020 quarter (due on 28th July 2020)
  • Monthly lodgers – March 2020 (due on 21st April 2020), April 2020 (due on 21st May 2020), May 2020 (due on 21st June 2020) and June 2020 (due on 21st July 2020)

The second phase amount will be equal to the first phase amount. Different cycle tax payer will be paid upon the lodgement as below:

  • Quarterly lodgers (each credit will be equal to 50% of the phase one payment), one after each BAS or IAS lodgement for June 2020 quarter and September 2020 quarter
  • Monthly lodgers (each credit equal to quarter of the phase one credit) one after each BAS or IAS lodgement for June, July, August and September 2020

Government Guaranteed Unsecured Loan

The $40 billion guarantee for small business loan under the Coronavirus SME Guarantee Scheme is in place to support small and medium business in obtaining the additional working capital. The government will grant a guarantee of 50% to eligible small and medium business lenders which will reinforce lenders’ willingness and ability to provide credit.

Meanwhile, a deferred repayment of up to 6 months has been announced by the Australian Banks aiming at supporting small and medium business who has existing loans. Reserve Bank of Australia (RBA) has also announced a $90 billion Term Funding Facility for the banking system to lower the funding costs for banks and subsequently to encourage lending to businesses.

Temporary relief for financially distressed businesses:

  • The threshold at which creditors can issue a statutory demand on a company has been increased from $2,000 to $20,000
  • The threshold at which creditors can initiate bankruptcy notice has been increased from $5,000 to $20,000
  • The time companies have to respond to a statutory demand and bankruptcy notice they receive will be extended from 21 days to up to 6 months

Directors will also be temporarily exempted from any personal liability arising from the trading during insolvency. The Corporate Act 2001 will also be amended to provide companies with temporary and targeted relief against unforeseen events caused by COVID-19.

For individual

JobSeeker Payment

The government introduced a temporary income support payment for the next six months, offering a fortnightly payment of $550, which is the double of the current allowance, to eligible job seekers who lost their jobs during the pandemic. This supplement will be an additional payment paid on top of their existing allowance to both existing and new eligible recipients (including those currently receiving JobSeeker Payment, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit)

One-Off $750 Economic Support Payment

On top of the one-off $750 economic payment released by the government on 12th March 2020, the government will be providing second $750 income support payment to social security, veteran and other income support recipients and eligible concession card holders (except for those receiving the Coronavirus supplement).

The first $750 payment will be available from 31st March 2020 to individual who becomes eligible from 12 March 2020 to 13 April 2020.

The second $750 payment will be made automatically to eligible payment recipient and concession card holders from 13 July 2020

Early Access to Superannuation

Eligible individual affected by the COVID-19 have earlier access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21 to help them relieve the financial hardship. The first period for them to access their superannuation is between 20 April 2020 and 1 July 2020. The second period is between 1 July 2020 and 24 September 2020.

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

  • You are unemployed
  • You have the entitlement to receive a JobSeeker payment, Youth Allowance for jobseekers, Parenting Payment, Farm Household Allowance and Special Benefit
  • On or after 1 January 2020,
    • You were made redundant
    • Your working hours were reduced by 20% or more
    • If you are a self-employed individual (Sole Trader), your business is forced to suspend or your turnover has fallen by 20% or more

Early released superannuation is not subject to income tax, and the money you are claiming will not affect Centrelink or Veteran’s Affairs payments.

Reduce the minimum superannuation pension drawdown rates

The minimum superannuation drawdown rates for account-based pension and similar products will be reduced by 50% for 2019/20 and 2020/21. The pensioners who hold these products will be benefit from this measure because they do not have to sell their products to meet the minimum withdrawal requirement under the current financial market downturn.

Minimum pension drawdown rates halved for 2019/20 and 2020/21:

Given all the measures rolled out by the government in respondence to the outbreak of COVID-19 are temporary and applications are required with supporting fact and explanation, both business and individual should examine their own situation and check for the subsidies they are entitled in order to turn around their business and life during the outbreak. If you need any assistance for the consultation or application, please do not hesitate to reach us on 02 92213345 or connect@pittmartin.com.au.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

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