we care about your future Building a Bridge COVID-19 Response in Practice brentnalls-sa.com.au Chartered Accountants & Advisors
Who we are: Shali Manolev Danny Haydon Partner Principal – Health Division BAppSc Bcomm GraDip(ICAA) DipFS Ba AppSc(OT) MHtlhSer Mgt FAAPM (FP) FCA dh@brentnalls.com.au ssm@brentnalls.com.au Phone 0438 580319 Phone 0402 307 904
Disclaimer This document is for general information only and is not intended to give advice as it was prepared without taking into account the objectives, financial circumstances or needs of you or any particular person. Before acting on anything contained in this document, you should consider the appropriateness to your situation and you should seek advice based on your individual circumstances. Brentnalls SA | ABN 74 705 292 014 255 Port Road, Hindmarsh SA 5007
Where are we now? Federal Federal Job Keeper “Job Keeper” Economic Economic legislation Stimulus 1 Stimulus 2 Stimulus 3 passed 12 Mar. 22 Mar. 30 Mar. 8 Apr. 20 Mar. 16 Mar. 7 Apr. 20 Apr. Aus Banking WA Stimulus Commercial Job Keeper Association Lease Code Applications Package support of Conduct Open This presentation current to Wednesday, 29th April 2020.
In Information Sources Treasury Website with detailed Fact Sheets https://treasury.gov.au/coronavirus ATO COVID-19 information page https://www.ato.gov.au/General/COVID-19/COVID-19-frequently- asked-questions/ ATO Job Keeper https://www.ato.gov.au/general/JobKeeper-payment/ ABC News website https://www.abc.net.au/news/
Federal Government Economic Response Targets SUPPORTING SUPPORT FOR SUPPORTING THE FLOW INDIVIDUALS & BUSINESSES OF CREDIT HOUSEHOLDS
Support for Businesses Source: h https://treasury ry.gov.au/coronavir irus/business
Boosting Cash Flo low for Employers • Subsidises wage costs for PAYG tax component • Receipt is Tax-Free • But still get a deduction for 100% of wages • 2 x groups of payments (boosts) are available. • Boost Minimum: $10,000 • Boost Maximum: $50,000
Boosting Cash Flo low for Employers • Eligibility: • ABN Holder at 12 March 2020 • Had business income in 2019 tax return, or Activity Statement before 12 March 2020 • Pay at least $1 wages during the boost period
Boosting Cash Flo low for Employers BOOST 1 • Based on PAYGW from January 2020 – June 2020 • As reported on monthly/quarterly Activity Statements BOOST 2 • Same amount as Boost 1 total, split over 4 months (monthly) or 2 quarters (quarterly)
Boosting Cash Flo low for Employers Boost 1 Withholding Eligible Period Boost 1 Amount Lodgement Cycle Due Date Quarterly Qtr 3 (Jan, Feb, Mar PAYGW per March BAS* 28 April 2020 2020) Qtr 4 (Apr, May, Jun PAYGW per June BAS 28 July 2020 2020) Monthly March 2020 PAYGW per March IAS (x 3)* 21 April 2020 April 2020 PAYGW for April IAS 21 May 2020 May 2020 PAYGW for May IAS 22 June 2020 June 2020 PAYGW for June IAS 21 July 2020 *First Boost Payment will be at least the Minimum of $10,000 Boost Amounts will continue to be paid until Maximum of $50,000 exhausted
Boosting Cash Flo low for Employers Boost 2 Withholding Eligible Period Boost 1 Amount Lodgement Cycle Due Date Quarterly Qtr 4 (Apr, May, Jun 50% of Boost 1 Total 28 July 2020 2020)* Qtr 1 (Jul, Aug, Sep 50% of Boost 1 Total 28 Oct 2020 2020) Monthly June 2020* 25% of Boost 1 Total 21 July 2020 July 2020 25% of Boost 1 Total 21 Aug 2020 August 2020 25% of Boost 1 Total 21 Sept 2020 September 2020 25% of Boost 1 Total 21 Oct 2020 *Note overlap in Boost 1 & 2 for June 2020 period
Boosting Cash Flo low for Employers EXAMPLE A: • Monthly PAYG Withholder • PAYGW per month is $15,008 Period Boost 1 Calculation Period Boost 2 Calculation Amount Amount March 2020 $45,024 $15,008 * 3 June 2020* $12,500 $50,000 / 4 April 2020 $4,976 ($50,000 - $45,024) July 2020 $12,500 May 2020 - Maximum August 2020 $12,500 Exhausted September $12,500 June 2020 - 2020 Total $50,000 Total $50,000
Boosting Cash Flo low for Employers EXAMPLE B: • Quarterly PAYG Withholder • PAYGW per quarter is $1500 Period Boost 1 Calculation Amount March 2020 $10,000 $500 is less than $10,000 minimum June 2020 - ($1500 + $1500) is still less than $10k Total $10,000 Period Boost 2 Calculation Amount June 2020* $5,000 Total Boost 1 $10,000 / 2 September 2020 $5,000 Total $10,000
Boosting Cash Flo low for Employers INTEGRITY MEASURES: • ATO have advised will need to pay back the Boost if carried out a “scheme” to: • Become entitled where you otherwise wouldn’t; or • Increase the amount of the boosts • ATO investigating any sudden changes to characterization of payments, and large increases • Assume the ATO will review and audit • Single Touch Payroll data available to analyse patterns and behaviour
Boosting Cash Flo low for Employers HOW RECEIVED: • Credited to your ‘Integrated Client Account’ (a.k.a. Activity Statement Account) with the ATO • Reduce payment due on Relevant Activity Statement (wont use to offset prior debt) • If Refund, ATO will transfer funds within 14 days of lodgement
Increasing the In In Instant Asset Writ ite-off • Instant asset write off threshold increased from $30,000 to $150,000 until 30 June 2020 • Annual turnover less than $500M • Benefit in 2020 tax return • Example: Cost Claim Yr1 Claim Yr2 Claim Yr3 Previous (SBE $50,000 $7,500 $12,750 $8,925 Pools) Instant Asset $50,000 $50,000 - - W/off Note: if Asset later sold, all proceeds will be taxable
In Increasing the In Instant Asset Writ ite-off ELIGIBILITY: • New & Second Hand Assets • Limit is $150,000 per Asset (allows multiple claims) • Between 12 March and 30 June 2020 – first used or installed ready for use • Motor Vehicles subject to Depreciation Limit: $57,581
50% Accele lerated Depreciatio ion • Applies from 12 March 2020 to 30 June 2021 • Immediate deduction on 50% of Cost of Asset • Balance depreciated per usual rules • Benefit in 2020 or 2021 tax return • Example: Cost Claim Yr1 Claim Yr2 Claim Yr3 Previous (SBE $50,000 $7,500 $12,750 $8,925 Pools) Accelerated $50,000 $25,000 $6,375 $4,462 + $3,750
50% Accele lerated Depreciatio ion ELIGIBILITY: • NEW Assets only • Use where Instant Asset w/off doesn’t apply – i.e. cost over $150k, or acquired post 30/6/2020 • Not available for assets with specific depreciation arrangements – certain farm assets, capital works, water facilities, etc • Asset must be ordered after 12 March 2020 (anti- avoidance measures will apply)
WA Stim imulus
WA Stim imulus • Household fees and charges frozen until next financial year • one-off $2,500 credit against electricity invoices for small to medium businesses that consume less than 50 megawatt hours annually • Eligible Small businesses with payroll between $1m and $4m will receive a $17,500 grant • Waive payroll tax from 1 March to 30 June 2020 for small to medium size businesses (wages under $7.5 million) • Bring forward payroll tax relief (increase of threshold to $1,000,000) from 1 July 2020 • Payments made to employees under Jobkeeper scheme will be exempt from payroll tax • Waive rental payments for small business and NFP’s in State Owned Buildings for 6 months • Land tax relief for landlords who offer rent relief for a minimum of 3 months and freeze outgoings to small business’s who have suffered a 30% reduction in turnover due to COVID 19
ATO Assis istance
ATO Assis istance Payment deferrals • Payments due before 23 Jan 2020 • Income Tax, BAS • Not able to be deferred • Can request remission of interest charged from 23 Jan • Payments due after 23 Jan 2020 • May be deferred • Interest remitted • Existing Payment Arrangements • Can be re-negotiated
ATO Assis istance PAYG Variations • Apply to vary June 2020 PAYG Instalments • Upon lodging June, can apply for Sept & Dec 2019 & March 2020 PAYG Instalments to be refunded (if not done on March Instalment) • Penalties will not apply where PAYG Instalment variations do not reflect final tax position GST Cycle • If normally receive GST refunds, consider changing cycle from quarterly to monthly
JobKeeper Payments • $130B Scheme designed to help businesses retain their employees • $1,500 per fortnight per eligible employee payment to eligible businesses for 6 months (April – Sep) • Employers must enrol to be part of scheme (optional) • Initial and ongoing reporting requirements
1. On 1 March 2020 carried on business or not for Profit in Australia 2. Employed at least one eligible employee on 1 March 2020 3. Eligible employees currently employed in fortnights you claim for (can be stood down or re-hired) 4. Business faced 30% fall in turnover (for aggregated turnover of $1bn of less) (other categories of turnover also applicable)
Turnover Test To be initially eligible, compare GST Turnover: 30% or more reduction in Turnover Test (Aggregated • March 2020 v March 2019 “GST Turnover” from same income < $1B) • Projected April 2020 v April 2019 quarter/month last year • Projected Apr-Jun Qtr 2020 v Apr-Jun Qtr 2019 If not immediately eligible, Cash or Accruals if report GST can apply at later date and Choice of test period on Cash basis enter scheme (but not back paid)
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