25 June 2020
30 June is just around the corner, which means the start of another financial year. 2020 has been a whirlwind but it is time to start preparing to finalise the 2020 financial year to complete budgets and scenario modelling for the new financial year.
Effective tax planning reduces tax payable and that is so important in these times as it puts more money in the bank to help your business survive & grow.
What's changing in terms of legislation this year?
The Federal Budget has been delayed this year until 6th October amid COVID-19. .
The Company Tax Rate reduces to 26% starting on the 1st July 2020. This is for Companies with a turnover of less than $50m. This is down from 27.5% in this current year and will reduce to 25% on 1st July 2021.
Single Touch Payroll
Since the implementation of STP employers will no longer need to send employees their payment summary/group certificate for the financial year. Instead they will receive their payment summaries now known as an ‘Income Statement’ directly from the ATO via their MyGov account.
For employers you will need to lodge a finalisation for the financial year in your accounting software via the STP channel by the 14th July 2020. Please note this process will differ for each accounting program.
10 June 2020
The Federal Government’s $150,000 instant asset write-off scheme will be extended until the end of December 2020 to support millions of businesses which are set to benefit from the accelerated deductions.
After expanding the scheme from covering assets with a cost of less than $30,000 to a cost of less than $150,000 and extending access to the scheme to include medium sized businesses in response to the COVID-19 pandemic, the Federal Government has announced that it plans to extend the deadline for accessing the scheme from 30 June 2020 to December 31 2020.
The Treasurer, Josh Frydenberg, said the extended timeframe would help firms to invest in assets to support their business as the economy reopens and coronavirus health restrictions continue to be eased.
The instant asset write-off scheme allows small and medium-sized businesses to bring forward tax deductions on eligible asset purchases.
Businesses with a turnover of up to $500 million per year will be able to claim an immediate tax deduction on certain asset purchases that cost less than $150,000.
5 June 2020
Following on from the previous Payroll tax relief measures, the NSW Government has now announced that any top up payments made to employees for JobKeeper will be exempt from payroll tax.
Further, The State Insurance Regulatory Authority (SIRA) has determined that only payments made for work undertaken or hours worked are to be included as wages to calculate workers compensation premiums.
Employers must pay their eligible employees a minimum of $1,500 per fortnight to receive the JobKeeper payments. Any additional wages paid to employees to meet the requirements of the JobKeeper scheme will be exempt from payroll tax and workers compensation.
If you're an employer who pays wages in NSW, you must register for payroll tax if your total Australian wages exceed the relevant monthly threshold.
If you're a member of a group, the total Australian wages paid by all members of the group determines whether you should register for payroll tax.
For more information on payroll tax or workers compensation, contact your Boyce Accountant.
4 June 2020
The NSW Government has extended the Small Business Support Grant to ease the pressures on small business as a result of COVID-19. The funding aims to support the ongoing operations of small businesses highly impacted from the COVID-19 pandemic following the NSW Public Health Order of 31 March 2020.
Funds may only be used for unavoidable business expenses that are not supported by other government funding.
These expenses include, but are not limited to:
- council rates
- telecommunication charges
- insurance payments
- professional advice
- wages for an employee not eligible for JobKeeper payments
- franchise fees
- paying creditors, if your business is closing.
To be eligible for this grant, you must:
- be based in NSW
- meet the small business guidelines
- be registered with an ABN as at 1 March 2020
- have an annual turnover of more than $75,000 (a Business Activity Statement must be provided as evidence) Where a small business does not submit a BAS to the ATO and meets all other criteria, the small business should contact Service NSW to discuss further. In these cases, an income tax declaration may be accepted as evidence of an annual turnover of $75,000.
- employ 1-19 full-time workers as at 1 March 2020
- be able to report a payroll below the NSW 2019-2020 payroll tax threshold of $900,000
- have been highly impacted by Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 effective on 30 March 2020
- have experienced at least 75% decline in turnover compared to the same two-week period in 2019, as a result of COVID-19 (for businesses that have been in operation for less than 12 months, refer to the guidelines)
- have unavoidable business costs not otherwise the subject of other NSW and Commonwealth Government financial assistance measures
3 June 2020
If you are claiming the JobKeeper payments, you are required to complete a business monthly declaration with the ATO. You must do this in the first 14 days after the month you are claiming for.
The ATO will ask you to re-confirm the business participant details and your eligible employees (ensuring they’ve been paid at least $1,500 per fortnight). You will also need to provide the ATO with information about your GST turnover for May and projected GST turnover for June.
The information you provide is not a re-test of your eligibility.
If any of your eligible employees change or leave your employment, you will need to update this employee information through your monthly declaration.
For instructions on how to complete your monthly declaration, please click here.
If you require help completing your declaration or would like more information, please contact your local Boyce accountant.