Archive for March 2020

Supporting businesses to retain jobs

Supporting businesses to retain jobs

The Government is introducing a subsidy program to support employees and businesses. The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.

Keeping Australians in work and businesses in business will lay the foundations for a stronger economic recovery once the Coronavirus crisis passes.

JOBKEEPER PAYMENT

Summary

Under the JobKeeper Payment, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over. For employees, this means they can keep their job and earn an income – even if their hours have been cut.

The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus. The JobKeeper Payment will also be available to the self-employed.

The Government will provide $1,500 per fortnight per employee for up to 6 months.

Eligibility

Employers (including non-for-profits) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
  • the business is not subject to the Major Bank Levy.

Employers must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and provide supporting information demonstrating a downturn in their business. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.

Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees. Casual employees eligible for the JobKeeper Payment are those

employees who have been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020. To be eligible, an employee must be an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.

Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

In circumstances where an employee is accessing support though Services Australia because they have been stood down or had their hours reduced and the employer will be eligible for the JobKeeper Payment, the employee will need to advise Services Australia of their new income.

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable prior period (of at least a month).

Where employees have multiple employers – only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobSeeker Payment on their behalf. The claiming of the tax free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer.

Payment process

Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.

Where employers participate in the scheme, their employees will receive this payment as follows.

  • If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
  • If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the employer monthly in arrears by the ATO.

Timing

The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.

 

If you need any help please let us know.

Boosting cash flow for employers – Additional Information from ATO

Boosting cash flow for employers – Additional Information from ATO

Eligibility

You will be eligible to receive the cash flow boost if you are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, company or trust that:

  • held an ABN on 12 March 2020 and continues to be active
  • has an aggregated annual turnover under $50 million (generally based on prior year turnover)
  • made eligible payments you are required to withhold from (even if the amount you need to withhold is zero).

Eligible payments include:

  • salary and wages
  • director fees
  • eligible retirement or termination payments
  • compensation payments
  • voluntary withholding from payments to contractors.

In addition, you must also have either:

  • derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020
  • made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.

We will generally determine whether you are a small or medium business entity based on your most recent income tax assessment for a prior year. However, where you do not have any income tax assessments for prior years, you may still be eligible if we are satisfied, based on other information we hold, that you are in business and would have an aggregated annual turnover under $50 million.

We may also give you further time to provide us notice that business income or supplies were made. This will generally be the case where you have a lodgment deferral in place. If you did not have a lodgment deferral in place, you will not become eligible if you lodge or amend returns for those periods now.

Schemes

You will not be eligible for cash flow boosts if you (or a representative) have entered into or carried out a scheme for the purpose of:

  • becoming entitled to cash flow boosts when you would otherwise not be entitled, or
  • increasing the amount of the cash flow boosts.

This may include restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.

Any sudden changes to the characterisation of payments made may cause us to investigate whether the payments are in fact wages. If the payments are wages, we may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may also have FBT obligations that have not yet been met.

please read the full statement below link

https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/

 

Economic Stimulus – Up to now

Economic Stimulus – Up to now

As you may be aware, the Australian Federal / State Government has announced an economic response to the Coronavirus and its threat on the Australian economy. This has resulted in the introduction of various taxation and cash reliefs. Please see below for a breakdown of the stimulus package and determine whether or not you or your business can benefit. We have summaries varies governments initiative for your benefit.  We only focused on business benefits.

Fed Govt Economic Stimulus  – 2

  • The Government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. (100 per cent of PAYG withheld, with a minimum $20,000 payment and up to a cap of $100,000 over 9 months)
  • Coronavirus SME Guarantee Scheme –  Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
  • Providing temporary relief for financially distressed businesses –  Temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent.

Fed Govt Economic Stimulus  – 1

  • Increasing the instant asset write-off Lifting the threshold to $150,000 (from $30,000).
  • Investment Offering businesses a time-limited incentive to invest, by accelerating depreciation deductions.
  • Supporting apprentices and trainees Wage assistance to help small businesses to keep their apprentices and trainees

NSW

  • Waiver of payroll tax for businesses with payrolls of up to $10 million for three months (the rest of 2019-20)
  • Bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21;
  • $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies
  • More than $250 million to bring forward maintenance on public assets including social housing and crown land fencing;
  • $500 million to bring forward capital works and maintenance

VIC

  • Payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million.
  • The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.
  • Commercial tenants in government buildings can apply for rent relief – a move private landlords are also being encouraged to undertake – and 2020 land tax payments will be deferred for eligible small businesses.
  • The Government will pay all outstanding supplier invoices within five business days. The private sector is urged to do the same where possible.
  • Waiving liquor licensing fees for 2020 for affected venues and small businesses.
  • $500 million to establish a Business Support Fund. The fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail

WA

  • $17,500 grants for small businesses with a payroll between $1 million and $4 million.
  • The $1 million payroll tax threshold (announced in October 2019) will be brought forward by six months to 1 July 2020.
  • Businesses impacted by COVID-19 can apply now to defer payment of their 2019-20 payroll tax until 21 July 2020.

QLD

  • Establish a $500m concessional loan facility, comprising loans of up to $250,000 to eligible businesses. These loans will come with an initial 12-month interest free period, to assist businesses retain staff during the downturn.
  • Extend the payroll tax deferral measure, originally for businesses with taxable wages of $6.5m or less affected by natural disasters, to all COVID-19 affected businesses with taxable wages of $6.5m or less. This will extend the due date for the lodgement and payment of remaining 2019-20 payroll tax returns to 31 July 2020.

TAS

  • Interest Free Business Loans for Small Business – $20 million in interest free loans to small businesses in the hospitality, tourism, seafood production, and exports sectors. The loans will be available to businesses with a turnover of less than $5 million to purchase equipment or restructuring business operations and will be interest free, for three years.
  • Payroll Tax Waivers – Payroll tax liabilities will be waived for hospitality, tourism and seafood industry businesses for the last four months of 2019-20.
  • Improving Small Business Cash Flows -Payment terms by Government agencies will be reduced from 30 days to 14 days; and
  • Targeted Small Business Grants Program for Apprenticeships and Traineeships  – The targeted Small Business Grants Program provides a $5,000 grant for businesses that hire an apprentice or trainee in the tourism, hospitality, building and construction, and manufacturing industries.

 

If you need any help please let us know.