Coronavirus Business Relief

With the coronavirus (COVID-19) outbreak across the world, Australia are implementing restrictions which are having a heavy impact on our local businesses.

The World Health Organization has announced that COVID-19 is a pandemic. In response to this the Australian Government has just unveiled their economic response to the Coronavirus.

We are here to support local businesses and provide you with up to date information about coronavirus business relief assistance being provided to businesses, this page will be updated as changes are made to existing information and new information becomes available.

Firstly, bookmark this page!

Federal Support Measures

The Australian Government announced their economic response to the coronavirus with two areas directly impacting businesses.

This package is designed to support business and assist businesses with short term cash flow challenges.

Cash Flow Assistance for Business

Boosting Cash Flow for employers

This measure will provide up to $100,000 back to businesses and not for profits that employ staff, with a minimum payment of $20,000 to eligible businesses.

  • Eligible to business and not for profits with an aggregated annual turnover <$50 million
  • Must employ workers
  • Payment will be equal to 100% of the amount withheld from employee’s salary and wages, up to a maximum payment of $50,000
  • Eligible businesses that pay salary and wages will receive a minimum payment of $10,000 even if they are not required to withhold tax
  • An additional payment is being introduced in the July-Oct 2020 period, where eligible entities will receive an additional payment equal to the total of the previous payments they have received.  This means eligible entities will receive at least $20,000 up to a total of $100,000 for both payments.
  • The payment will be tax free

Businesses will not need to apply for this credit, it will be automatically applied upon lodgement of activity statement from 28th April 2020. If this measure places your account in credit with the ATO the refund will be received within 14days.

Supporting apprentices and trainees 

Eligible employers can apply for a wage subsidy of 50% of the apprentice or trainees wage for 9 months from 1 January 2020 to 30 September 2020. Where a business is not able to retain an apprentice, the subsidy will be available to a new employer.

  • Eligible to businesses employing fewer than 20 full-time employees who retain an apprentice or trainee
  • The apprentice or trainee must have been in training with a small business as at 1 Mar 2020
  • Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider
  • Employers can register for the subsidy from early April 2020, and final claims for payment must be lodged by 31 Dec 2020

Delivering Support for business investment

Increasing the instant asset write-off 

The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (previously $50 million) until 30 June 2020.

  • This applies from 12th March 2020 – 30 June 2020
  • Includes new and second assets first used or installed during this period.
  • The threshold in on per asset basis, meaning businesses can write off multiple assets at a time.

Keep in mind that that the increase to the instant asset write off does mean that you will receive a tax refund, your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year.

Backing business investment

The Government is introducing a time limited 15-month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions.

  • Eligible Businesses with a turnover of less than $500 million
  • 50% deduction of the cost of an eligible asset on installation with existing depreciation rules applying to the balance of the asset’s cost.
  • Eligible assets are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997, acquired after the announcement (12 March 2020) and first used or installed by 30 Jun 2020.
  • Does not apply to second hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

We recommend that you speak with your accountant prior to purchasing assets that may be deductible under this measure.

For more information visit: https://treasury.gov.au/coronavirus

Temporary Relief for Financially Distressed Businesses

  • Temporary increase to the threshold at which creditors can issue a statutory demand on a company and initiate bankrupt proceedings on and individual, and an increase to the time companies and individuals must respond to statutory demands that have been received.
  • Threshold increases from $2,000 to $20,000
  • Timeframe increases from 21 days to 6 months.
  • Temporary relieve for directions from any personal liability for trading while insolvent
  • Temporary flexibility in the Corporations Act 2001 and to provide targeted relief from provisions of the act to deal with unforeseen events that arise because of the Coronavirus health crisis
  • Tailored solutions for owners and directors of business currently struggling, including temporary reduction of payments or deferrals, or withholding enforcement action including DPNs and windups.

ATO Support Measures

The ATO are offering support to those that have been affected by coronavirus (COVID-19).

  • 6-month Payment date deferrals for business activity statement, income tax assessments, fringe benefits tax assessments and excise
  • Option to report activity statements monthly instead if quarterly to access GST refund quicker.
  • Option to adjust PAYG to nil for the March 2020 quarter and claim a refund for any instalments made for the September 2019 and December 2019 quarters
  • Remission of interest and penalties, incurred after 23 January 2020, that have been applied to tax liabilities
  • Low interest payment plans.

Employers will still be required to meet super guarantee obligations.

For more information visit: ATO

Fair Work

Coronavirus and Australian Workplace Laws

https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws

Bank and Financial Institutions

Here is a comprehensive list of links to your banks financial hardship teams, from the Australian Banking Association
https://www.ausbanking.org.au/campaigns/financial-hardship/

Jobkeeper Payment

Businesses impacted by the coronavirus will be able to access a subsidy from the Government to continue paying their employees.

  • Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee
  • Payments will be backed dated to 30 March 2020, for a maximum period of 6 months.
  • Eligible business that have less than 1 billion turnover and business has reduced by 30%
  • Eligible business that have over 1 billion turnover and business has reduced by 50%
  • Not subject to major bank levy.
  • Employees must be employed as of March 1 and still engaged with employer
  • Not for profits and Sole trader individuals that meet income turnover tests are eligible to apply
  • Eligible employees are full-time, part-time, or long-term casuals (which have been employed regularly for longer than 12 months as at 1 March 2020)
  • Employers will be required to pay eligible employees $1,500 per fortnight, employers may top up wages.
  • Employers are not required to pay superannuation on top of subsidy.

Employers will need to register their interest with the ATO, payments will begin the first week of May 2020.

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

Sales & Success

What does sale and success mean to you? Does it mean the same thing??

We believe businesses need to move past the idea that sales and success are the same thing, it is a misconception that sales are the best indicator of success in business.

Sales demonstrate the demand for the product or service, it shows that the business has value in the market. Yes, that is a good indicator that the business is in demand BUT Sales Growth… now that is a better indicator, sales growth show whether the business is growing or declining, whether the market values the product still, if the business is on the track and if the business is consistently delivering its business promise.

BUT this doesn’t tell us if the business is healthy and sustainable!

Can a business that is making consistent sales fail??

Yes – Take into consideration all costs and overheads of running a business, now the business isn’t turning over a net gain.

Did you know that 65% of insolvent businesses are profitable? Businesses fail due to bad management of cashflow.

So, what is a successful business?  We like to think a successful business knows where it is going, is well managed and has a positive impact on the economy.

A healthy business will know the strength of its balance sheet, know whether the business will be around for years to come and have a business plan with a vision and a mission.

Single Touch Payroll FAQ

Your Answers To Single Touch Payroll 

What is Single Touch Payroll?

The ATO requires employers to report salaries and wages, PAYG withholding and superannuation to the ATO each time they pay their employees. This is compulsory for all employers.

What is the new legislation?

Previously it was compulsory for businesses with 20 or more employees to digitally report payroll to the ATO. It is now mandatory for all employers in Australia to be compliant to this legislation.

What does this mean for employers?

Employers are no longer required to report payments at EOFY, employers are now required to digitally send this information to the ATO every pay run.

Can I opt into STP before it is mandatory for me?

Yes you can but once you opt in you cannot opt out.

What information is reported?

Payment, tax and super information will be reported to the ATO each time you pay your staff. Employment termination payments and reportable employer super contributions are reported when you process and file your payment runs. And fringe benefits tax is reported when you finalise STP.

Do I need to provide payment summaries?

You will no longer need to produce payment summaries or a payment summary annual report. At the end of the financial year a confirmation will be sent to ATO. Employees can access payment summaries through MyGov

What happens if I make a mistake after I report?

You can make an amendment to a payment run if you make a mistake. This can be done in a few ways, revert payment run, complete and unscheduled payment run.

What happens if I opt half way through the financial year?

Majority of accounting software’s report financial year to date, so you can only start file information from when you opt into STP.

Need more time to be compliant?

September 30th is not far away, ask for more time to be compliant. Follow this link for more information about deferrals.

https://www.ato.gov.au/Business/Single-Touch-Payroll/Need-more-time/deferrals/

Affordable and compliant STP Solution?

Find a solution that is cheap and that can grow with your business. Xero have $10/month with Xero’s payroll only plan that is full payroll and you can turn this into xero accounting one day.

** Xero are currently offering 50% off/month for the first 6 month**

Why your business needs a bookkeeper

7 reasons why your business needs a bookkeeper – READ MORE

FOR  A  BUSINESS  OWNER,   IT  CAN  BECOME  A DAUNTING   TASK  TO  PERFORM  BOOKKEEPING DUTIES WHILE STILL MANAGING THE DAILY RUNNING OF THE BUSINESS. THIS IS WHY HIRING A DEDICATED BOOKKEEPER IS RECOMMENDED FOR YOUR BUSINESS. ARE YOU WONDERING WHAT A BOOKKEEPER IS/ DOES?

Single Touch Payroll

All employers must participate!

All other employers

  • Must be reporting or granted a deferral before 30 September 2019
  • Transition year until 30 June 2020
  • ATO Approach is that no penalties will apply in the first year

Micro (1-4 employees) and disconnected employer concessions

  • The law still applies requiring you to enter STP by 30 September 2019.
  • ATO approach is that there will be a year of no penalties.
  • Quarterly reporting by your Agent in alignment with your BAS lodgement is an option.
  • Low cost payroll solutions are available.

** Anyone can elect to enter STP earlier than required **

SO what is Single Touch Payroll?

You submit payroll and superannuation data to the ATO each “PayEvent”. This could be weekly, fortnightly, monthly or whenever you pay.

A PayEvent is each time you pay someone and you should be generating a pay slip. Some of the data on the pay slip is now sent to the ATO:

  • The year-to-date totals of gross wages, allowances, deductions and gross tax for each employee being paid.
  • The year to date amount of Superannuation that has been accrued. The Superannuation Guarantee must be reported, other super can be reported.
  • You will also report the W1 Gross Wages & W2 Gross Tax for each payrun (so that the ATO will eventually prefill these totals for the BAS period onto the BAS for employers who also report W1 & W2 on the BAS). Superannuation payment information is going to be sent to the ATO by the SuperFunds. This information will be used by the ATO to check you are paying.

What do you need to do?

Employers should streamline their payroll process by utilising a software solution. Establish the payroll system, or adopt STP reporting through your software.

Do you need help setting up Single Touch Payroll (STP)? Contact CJS Bookkeeping for assistance.