HomeBuilder Program

June 2020

The HomeBuilder program has been announced to help drive economic activity across the residential construction sector by providing grants of $25,000 to eligible owner-occupiers (including first home buyers) to build a new home or substantially renovate an existing home. It is a time-limited grant program where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within 3 months of the contract date.

The HomeBuilder program will be non-taxable consistent with existing support measures, such as state-based first home-owner grants and stamp duty concessions. It is also accessible in conjunction with the First Home Owner Super Saver Scheme and First Home Loan Deposit Scheme. You don't need to be a first home owner to apply for the grant, so if you're not eligible to participate in any existing schemes, this program might provide you with support.

Eligibility

To access HomeBuilder, you must meet the following eligibility criteria:

 

Eligibility criteria

Age and citizenship

· You must be an Australian citizen

· You need to be aged 18 years or older

Individual income caps

Your income must be below one of the two caps below:

· $125,000 per annum for an individual applicant based on your latest tax return (either 2018/19 or 2019/20), or

· $200,000 per annum for a couple based on both individual's latest tax returns (either 2018/19 or 2019/20)

Date of
contract and construction

· The building contract must be entered into between 4 June 2020 and 31 December 2020

· Construction must commence within three months of the contract date

Grant to build
a new home – requirements

· The new home must be occupied as a principal place of residence

· The completed value of the new build (land and property) cannot exceed $750,000

· This criteria applies where vacant land is purchased either before or after 4 June 2020, with a contract to build entered into after this date

Grant for substantial renovations – requirements

· Substantial renovations to an existing principal place of residence must have a commercial contract price between $150,000 and $750,000

· Renovations include where a property (house and land) is already owned and a knock down rebuild is completed (where the new build cost is capped at $750,000)

· Pre-renovation value of the property must not exceed $1.5 million

· Renovations must improve accessibility, safety or liveability and cannot include additions such as swimming pools, spas, sheds or stand-alone garages

  

Eligibility criteria

Use of property

· The home must be used as your primary place of residence

· The new or renovated dwelling cannot be intended for use as an investment property

Companies, trusts and owner-builders

· Not available to companies or trusts, including SMSFs

· Not available to owner-builders

Evidence required

You'll be asked to provide:

· proof of identity

· a copy of a signed and dated contract

· a copy of your builder's registration or licence

· a copy of your latest tax return (either 2018/19 or 2019/20), and

· other documents such as Council approval, contracts, occupation certificates and valuations

Other

· All contracts and agreements must be entered into at arm's length, which means conditions such as the price and scope of works must be commercial, rather than favourable because of your relationship with another party involved

· All building and renovation work must be carried out by a registered or licenced contractor and named as a builder on the building licence or permit

· Unlike some other Commonwealth and State-based schemes, there is no
requirement that you need to be a first home buyer

 

Process and timing

Information on when and how you will be able to access HomeBuilder will become available through the relevant State or Territory revenue office below:

Location

Website

NSW

revenue.nsw.gov.au

VIC

sro.vic.gov.au

TAS

sro.tas.gov.au

WA

finance.wa.gov.au

SA

revenue.sa.gov.au

NT

treasury.nt.gov.au

 

How we can help?

If you would like any further information or assistance with HomeBuilder Grant, please feel free to contact us on 1300 885 761.

 

STP exemption for closely held payees

June 2020

In response to the COVID-19 crisis, the ATO have extended the Single Touch Payroll (STP) reporting exemption deadline from 1 July 2020 to 1 July 2021 for small businesses (19 or fewer employees) to report their closely held payees.

A closely held (related) payee is someone who is directly related to the business, company or trust that pays them, such as:

  • family members of a family business
  • directors or shareholders of a company
  • beneficiaries of a trust.

However, if you have any other employees (also known as arm's length employees) they must be reported through STP on or before each payday unless you are eligible for a micro employer (those with one to four employees) reporting concession.

You can also choose to voluntarily report your closely held payees' payroll information sooner if it's easier, through STP each time you make a payment at the same time as arm's length employees.

Reporting through STP may support your JobKeeper payment application and help you meet your monthly reporting requirements. STP reporting enables eligible employers to notify of their eligible employees:

  • their eligibility
  • start and finish periods
  • the amounts those employees have been paid (including any JobKeeper top-up).

You won't need to provide payment summaries to your closely held employees or a payment summary annual report to the ATO at the end of financial year if you:

  • report through STP for your closely held employees
  • lodge your finalisation declaration by the due date.

If you would like any further information or assistance in regards to Single Touch Payroll, please feel free to contact us on 1300 885 761.


JobKeeper scams: ATO warns as fraudsters impersonate business owners 

June 2020

The Australian Taxation Office is warning business owners and employees to be on the lookout for phone scams relating to the new JobKeeper payments.

Scammers, pretending to be from the ATO, ask for bank details so they can process JobKeeper wage subsidy payments.

The ATO has once again urged people to remember that while they will use email and SMS to communicate, they will never ask a person to reply and provide personal information like a Tax File Number (TFN) or bank account number via text or email nor will it use hyperlinks in its messages.

The ATO states that they do not need bank account details of individual employees to process JobKeeper payments. If they're eligible, employees will be paid by their employer and the ATO will reimburse their employer for these payments.


If you have any concerns regarding correspondence from the ATO please contact us on 1300 885 761 or contact the ATO directly on 1800 008 540.



Reminder: New instant asset write-off scheme and accelerating depreciation for businesses with turnovers up to $500 million

June 2020

Instant write-off asset

As advised in our Hot Topic of 19 March 2020, the Government has announced an increase to the instant asset write-off threshold from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed ready for use in this timeframe.

Eligibility:

  • For businesses which have aggregated turnover of less than $500 million.
  • The cost of individual assets being less than $150,000. There is no limit to the number of asset purchases that can be claimed.
  • The assets first used or installed ready for use within the timeframe.

If your business is registered for GST, you exclude the GST amount paid on the asset when calculating the small business write-off. If your business is not registered for GST, you include the amount of GST paid on the asset.

Private use is a factor when calculating the small business write-off. The full cost of the asset is used to determine eligibility for the write-off, however only the business use percentage of the asset is immediately deducted.

The instant asset write-off of $150,000 is due to end on 30 June 2020. From 1 July 2020 the threshold for immediate write-off will only be available for small businesses with annual turnover of less than $10 million and the threshold will reduce back to $1,000.

Accelerating depreciation deductions

There will also be a 50% accelerated depreciation deduction over and above what these businesses can already deduct in the first year and will be available for 15 months to 30 June 2021. The key features of the incentive are as follows:

  • The benefits are either 
    • Deduction of 50% of the cost or opening adjustable value of an eligible asset on installation.
    • If you are using the simplified depreciation rules for small business you can claim 57.5% of the cost of the asset in the first year you add the asset to the small business pool.
  • Eligible businesses – businesses with aggregated turnover below $500 million.
  • Eligible assets – new depreciating assets (for example, plant, equipment and specified intangible assets, such as patents). The assets must be first held, and first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021.

If you are a small business and are planning to purchase assets, contact us to determine your eligibility for the above incentives on 1300 885 761.


COVID-19 - Providing concessions for the Loan given to my SMSF

May 2020

The economic impacts of the COVID-19 crisis are causing significant financial distress for many businesses and individuals.

If your Self-Managed Superannuation Fund (SMSF) has a property with a related party loan and is impacted by the financial effects of COVID-19, (e.g. due to non-payment of rents) you may be able to provide your SMSF with repayment relief under an agreed commercial arrangement.

Ordinarily, not paying market repayments in an SMSF is a breach of superannuation laws. However, the ATO have provided guidance which allows SMSFs with an LRBA to negotiate a reduction in or waiver of repayments because of the financial impacts of the COVID-19.

If the repayment relief reflects similar terms to those currently offered by commercial banks for real estate investment loans impacted by COVID-19, the ATO will accept the parties are dealing at arm's length and the usual penalty rules will not apply.

What do you need to do?

There are some important things you should ensure are in place when you are providing a loan concession, especially when the lender is a related party.

  • Ensure the relief only applies to the related party loan.
    • Any relief offered on the loan can only relate to that loan agreement. The ATO concession does not extend to other loans.
  • Ensure that the concessions are temporary.
    • This means it should have an agreed period of time or agreed date where the concessions are reviewed in light of the economic circumstances.
  • Ensure that the financial difficulty faced by the SMSF is linked to the financial impacts of COVID-19.
    • Any negotiated concession will need to be measured against the COVID-19 related financial impact suffered by your SMSF, e.g. reduced rental receipts.
  • Clearly document the details of any discount, waiver or deferral which is being agreed.
    • In evidencing that the concession is reasonable, it would be best practice if it is consistent with an approach taken by an arm's length lenders.
    • For example, terms currently include temporary repayment deferrals for most businesses of up to 6 months, with unpaid interest being capitalised on the loan.
    • It is also expected that interest will continue to accrue on the loan and that the SMSF trustee will catch up any outstanding principal and interest repayments as soon as possible.
  • Proper documentation is necessary to allow your independent auditor to be satisfied that the concession satisfies all of the above.
    • This may take the form of a signed minute, renewed loan agreement or anything deemed appropriate to amend the terms of the loan.
    • The parties to the arrangement must also document the change in terms to the loan agreement and the reasons why those terms have changed.
    • Even if you control both the lessor and lessee, the above matters should all be documented.

These are extraordinary times and the ATO has provided this guidance to allow SMSF trustees to be flexible and agile.   If trustees act in good faith in implementing a reasonable and measured reduction concession because of the impacts of COVID-19 they should not fall foul of the law.

How can we help?

If you need assistance in applying these guidelines to your specific circumstances, please feel free to call us on 1300 885 761 in order to discuss in more detail.


NSW Small Business Support Grant of $10,000

April 2020

The Small Business Support Fund is a new $750 million assistance scheme that will provide grants of $10,000 for eligible NSW small businesses who do not pay payroll tax.

These grants will provide a cash boost for businesses struggling in the face of an unprecedented economic situation caused by the COVID-19 coronavirus pandemic, enabling them to keep staff employed and keep their businesses afloat.

Eligibility

To be eligible, NSW-based small businesses must:

  • Operate in an industry highly impacted by the Public Health Order 2020 issued 30 March (listed below) and have suffered a decline in turnover of 75% compared to the same two week period in 2019;
  • Have between 1-19 employees and an annual payroll below $900,000 (the NSW payroll tax threshold);
  • Have an annual turnover of more than $75,000;
  • Be registered with an Australian Business Number (ABN) at 1 March 2020;
  • Have an ABN and employ staff in NSW at 1 March 2020;
  • Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice; and
  • Provide appropriate documentation upon application.

Highly impacted industries

Eligible industries are those that have been subject to closure or are highly impacted by NSW government health directions in relation to COVID-19 and include:

  • Retail trade
  • Accommodation and food service
  • Rental, hiring and real estate services
  • Administrative and support services
  • Arts and recreation services.

If your business is not in one of the highly impacted industries you may still qualify for the grant. You will require a letter from your accountant confirming your eligibility.

How to apply

Applications for a $10,000 small business grant will be available through Service NSW from 17 April 2020 until June 1, 2020.

If you would like any further information or assistance with Small Business Support Grant please contact us on 1300 885 761.


Coronavirus SME Guarantee Scheme Rental Relief for the Tenant in My SMSF Property

April 2020

SME Guarantee Scheme

The Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme will support up to $40 billion of lending to SMEs (including sole traders and not-for-profits). Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Scheme will enhance lenders' willingness and ability to provide credit, supporting many otherwise viable SMEs to access additional funding to get through the impact of Coronavirus. The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • SMEs, including sole traders, with a turnover of up to $50 million.
  • Maximum total size of loans of $250,000 per borrower.
  • Loans will be up to 3 years, with an initial 6 month repayment holiday.
  • Unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Loans will be subject to lenders' credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME will only incur interest on the amount they draw down.  If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down in the future should they need to.

How to apply

If you're interested in the Coronavirus SME Guarantee Scheme you should approach your financial institution for more information. The Government is working with banks and other lenders to ensure loans are available as soon as possible.

Rental Relief for the Tenant in My SMSF Property

If your SMSF has a property and a tenant in financial distress, you may be able to provide your tenant with rental relief under an agreed commercial arrangement. This may even be the case when the tenant is a related party or yourself.

Ordinarily, charging a tenant a price that is less than market value in an SMSF is usually a breach of superannuation laws. However, the ATO have provided guidance which allows SMSF landlords to provide for a reduction in or waiver of rent because of the financial impacts of the COVID-19. For the 2019–20 and 2020–21 financial years, the ATO will not take action where an SMSF gives a tenant (who may also be a related party) a temporary rent reduction during this period.

There are some important things you should ensure are in place when you are providing a rent reduction to a tenant, especially when this is a related party:

  • Ensure the relief only applies to rent.
  • Ensure that the reduction in rent is only temporary.
  • The financial difficulty faced by the tenant is linked to the financial impacts of COVID-19.
  • Clear arrangements which detail the amount of discount, waiver or deferral of the rent.
  • Ensure you have proper documentation (e.g. a signed minute, renewed lease agreement etc.) which allows your independent auditor to be satisfied that the temporary rent relief satisfies all of the above.

How can we help?

If you need assistance regarding the SME Guarantee Scheme and rental relief, or to discuss whether this is the right action for you and your specific circumstances, please feel free to give us a call on  1300 885 761 so that we can discuss in more detail.


Our D & P App is now live!

April 2020

Dawson & Partners App has improved and is now live and available to you on the relevant App stores. If you have enabled automatic updates on your phone, the App will automatically update. Otherwise you will need to enable the update – we've provided some instructions below so you can know how to get the new version.

What's new in the App:

  • Covid-19 Support page to bring information alerts and updates directly to your smartphone;
  • Tax information, allowances, dates and tables;
  • New modern look and feel with recognizable buttons and graphics;
  • In-App processes are much slicker and more intuitive, especially for repeated activities such as recording expenses and scanning documents;
  • A completely revamped Receipt Manager tool;
  • Automatic mileage tracking is now even simpler, all data is now automatically synced in the cloud, so you can record your journeys and track/ submit your expenses with ease;
  • The updated document scanner is more user-friendly, making it quicker for you to snap documents with your smartphone and send to us.

How to update your App

There are 2 ways in which you can update your App.

  • Automatically

If you have enabled automatic updates on your phone, the App will automatically update. This means in general, that overnight, the App will update automatically, and in the morning when you open the App, you will be asked to re-enter your registration details, including the code DAWSON.

  • Manually

Directly from Apple - https://support.apple.com/en-us/HT202180

1. Open the App Store. If you're using iOS 12 or earlier, tap Today at the bottom of the screen.

2. Tap your profile icon at the top of the screen.

3. Scroll down to see pending updates and release notes. Tap Update next to an app to update only that app or tap Update All.

Directly from Google - https://support.google.com/googleplay/answer/113412?hl=en-GB

1. Open the Google Play Store app.

2. Tap Menu, My apps & games.

3. Apps with an update available are labelled 'Update'. You can also search for a specific App.

4. Tap Update.

If you haven't downloaded our free App, please head to the Apple or Android store on your device and search for MyAccountants and enter the code DAWSON to start benefiting from this technology today.

Alternatively, you can download the App using the links below:

Click here to download on Android

Click here to download on Apple

Do feel free to share the App with anyone you think might find it useful.

 

Update on Government's Stimulus Package in Response to the Coronavirus

April 2020

In response to the economic impact of the Coronavirus, the Government has announced a number of initiatives to help individuals and businesses at this uncertain time.

The following is a broad summary of the key initiatives and changes including accessing some of your super, income support for individuals and tax concessions for small businesses.

1. Superannuation initiatives

Early access to super

If you are under financial stress, you may be able to access up to $10,000 of your super before 1 July 2020 and another $10,000 after 1 July 2020, for a limited time. The ATO is likely to start accepting applications from mid-April.

You may be eligible for early access to your super if you are either:

a) Unemployed

b) Eligible for a Jobseeker payment, Youth Allowance payment for job seekers, Parenting Payment (including the single and partnered payments), special benefit or farm household allowance.

c) On or after 1 January 2020, you:

· were made redundant

· had your working hours reduced by 20% or more

· are a sole trader and your business was suspended or you experienced a reduction in business turnover of 20% or more.

 

These payments are tax-free and not treated as income under the Centrelink income test.

Eligible individuals who are looking to access their superannuation entitlements under the above new ground of release will be able to apply directly to the ATO through the myGov website (at www.my.gov.au) and certify that the above eligibility criteria is satisfied.

 

Support for retirees

The Government will be temporarily reducing the superannuation minimum drawdown amounts for account-based pensions and similar products by 50% for the 2020 and 2021 income years as follows:

Recipient's age

Current minimum drawdown

Reduced drawdown for 2020 and 2021 income years

Under 65

4%

2%

65 to 74

5%

2.5%

75 to 79

6%

3%

80 to 84

7%

3.5%

85 to 89

9%

4.5%

90 to 94

11%

5.5%

95 and above

14%

7%

2. Income support for individuals

Coronavirus Supplement

From 27 April 2020, anyone who is eligible (see table below) for the Coronavirus supplement will receive the full rate of the coronavirus supplement of $550 per fortnight for six months, including jobseeker payment, youth allowance and parenting payment (Partnered and Single).

Expanding access (and eligibility) to certain income support payments

  • A new category of Jobseeker Payment and Youth Allowance Jobseeker will become available for eligible individuals who are financially impacted by the Coronavirus and satisfy certain requirements. This could include, permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests, as a result of the economic downturn due to the Coronavirus.
  • Waiving the asset test for Jobseeker Payment, Youth Allowance Jobseeker, and Parenting Payment.
  • The one-week ordinary waiting period, liquid assets waiting period, seasonal work preclusion period and newly arrived residents waiting period will not apply during this period. These waiting periods will also be waived if you are currently within these waiting periods.

Tax-free payments of $750 to eligible recipients

From 12 March 2020, you may be eligible to receive up to two, separate, tax-free $750 lump sum payments if you receive one or more Centrelink payments or concession cards as shown in the table below. A single person may receive up to $1,500 and couples may receive up to $3,000 from the first and second payments.

You do not need to apply for these payments, Centrelink will automatically allocate this to you depending on your eligibility.

Eligible for up to 2 x $750 lump sums

Likely to receive the first lump sum but willreceive the Coronavirus Supplement instead ofthe second lump sum

·Age pension

·Disability support pension

·Carer Payment

·Widow B Pension

·ABSTUDY (Living Allowance)

·Austudy

·Bereavement Allowance

·Newstart Allowance

·Family Tax Benefit (includes Double Orphan Pension)

·Carer Allowance

·Pensioner Concession Card holders

·Commonwealth Seniors Health Card holders

·Veterans Service Pension; Veteran Income Support Supplement

·Veteran Compensation Payments (includes lump sum payments)

·War Widow pension, and Veteran Payment

·DVA PCC holders

·Disability Pensioners at the temporary special rate

·DVA income support pensioners at $0 rate

·DVA Gold Card

·Parenting Payment

·Wife Pension

·Jobseeker Payment

·Youth Allowance Jobseeker

·Partner Allowance

·Sickness Allowance

·Special Benefit

·Widow Allowance

·Farm Household Allowance

 

Reduce deeming rates

From 1 May 2020, the Government will be reducing both the upper and lower social security deeming rates by a further 0.25 percentage points, in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

On this basis, as of 1 May 2020, the upper deeming rate will be reduced from 3% to 2.25%, and the lower deeming rate will be reduced from 1% to 0.25%. The reductions reflect the low interest rate environment and its impact on the income from savings. Also, people who are currently receiving part pensions and less than the full rate of income support may receive increased entitlements. 

3. Tax benefits for small businesses

 

Boosting cash flow for employers

From 12 March 2020, if you own an eligible small and medium business and not-for-profit entities with an aggregated annual turnover of less than $50 million (usually based on their prior year's turnover) that employ people, may be eligible to receive a total payment of up to $100,000 and a minimum total payment of $20,000 based on their PAYG withholding obligations, in the following two stages:

  • Stage 1 payment – Commencing from the lodgement of activity statements from 28 April 2020, eligible employers that withhold PAYG tax on their employees' salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum of $50,000. Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold PAYG tax.
  • Stage 2 payment – For employers that continue to be active, an additional payment will be available in respect of the July to September 2020 period, basically as follows:
    • Quarterly lodgers will be eligible to receive the additional payment for the quarters ending September 2020, with each payment being equal to 50% of their total initial (or Stage 1) payment (up to a maximum of $50,000).
    • Monthly lodgers will be eligible to receive the additional payment for the July 2020, August 2020 and September 2020 activity statement lodgements, with each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000).

The ATO will pay this as an automatic credit to the business upon lodgement of your business activity statement. If this means you are eligible for a tax refund, the ATO will pay the refund within 14 days. You don't need to fill out any new forms and the payments are tax free.

 

Supporting apprentices and trainees

From 1 January 2020 to 30 September 2020, if you are an eligible employer you can apply for a wage subsidy of 50% of the apprentice's or trainee's wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

An eligible employer must have less than 20 full-time employees. The apprentice or trainee must be in employment with the business as at 1 March 2020.

You can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

Increasing the instant asset write-off threshold for small businesses

The Government has announced an increase to the instant asset write-off threshold from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed ready for use in this timeframe.

 

There will also be a 50% accelerated depreciation deduction over and above what these businesses can already deduct in the first year and will be available for 15 months to 30 June 2021.

 

How can we help?

If you have any questions or would like further clarification in regards to any of the above initiatives, please feel free to contact us on 1300 885 761.

 

JobKeeper Payment for Employers and Employees

April 2020

The Government has announced a new JobKeeper payment, which is a wage subsidy to keep Australians in work. The Government will provide $1,500 per fortnight per employee for eligible employers for up to 6 months from 30 March 2020. Eligible businesses can be structured as sole-traders, partnerships, trusts or companies.

Eligible employers

Employers will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent for at least a month; or
  • their business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent for at least a month; and
  • the business is not subject to the Major Bank Levy.


The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.


Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.


Eligible employees

Eligible employees are employees who:

  • are currently employed by the eligible employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as 1 March 2020);
  • are at least 16 years of age;
  • are 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; and
  • are not in receipt of a JobKeeper payment from another employer.

Payment Process

Eligible employers will be paid $1500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1500 per fortnight, before tax, and employers are able to top-up the payment.

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.

How to apply

Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May, paid in arrears, and backdated to 30 March 2020.


Eligible businesses must identify eligible employees and provide monthly updates to the ATO. All eligible employees must receive, at a minimum, the amount of $1,500 per fortnight, before tax. The payment will be taxed as ordinary income in the hands of the recipient.

 

Self-employed businesses can likewise register their interest in applying for the JobKeeper payment via ato.gov.au from 30 March 2020. They will be required to provide their ABN for their business and nominate an individual to receive the payment. The nominated individual must provide his/her TFN and provide a declaration regarding recent business activity.

 

Self-employed businesses will have to declare their continued eligibility for the payments through a monthly update to the ATO. Payments will be made monthly to the nominated individual's bank account.


Eligible employees currently receiving the previously announced JobSeeker payments will not be allowed to also access the JobKeeper payments.


How can we help?

If you have any questions or would like further clarification in regards to JobKeeper payment, please feel free to contact us on 1300 885 761.

 

Economic Response to the Coronavirus 

March 2020

The Federal Government has announced measures to assist businesses manage cash flow challenges and retain their employees in response to the economic impact of the coronavirus.

Boosting cash flow for employers

Certain employers will be provided with rebates of employee PAYGW paid up to $25,000, with a minimum payment of $2,000 for eligible businesses. The payment will provide temporary cash flow support to small businesses that employ staff. The payment will be tax free.

Eligibility

Small and medium business entities with aggregated annual turnover under $50 million that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

  • The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon business lodging eligible upcoming activity statements.
  • Eligible businesses that withhold tax to the ATO on their employee's salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.
  • Eligible businesses that pay salary and wages will receive a minimum payment of $2,000 even if they are not required to withhold tax.

Timing

The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Any resulting refunds will be paid within 14 days.

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150%) in the March 2020 activity statement.

For more information on the Australian Government's Economic Response to Coronavirus visit  treausury.gov.au/coronavirus.

Supporting apprentices and trainees

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

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Eligibility

The subsidy will be available to small 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 March 2020.

Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.

Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

Timing

Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.

Further information is available at:


New instant asset write-off scheme for businesses with turnovers up To $500 million


The Government has announced an increase to the instant asset write-off threshold from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed ready for use in this timeframe.

There will also be a 50% accelerated depreciation deduction over and above what these businesses can already deduct in the first year and will be available for 15 months to 30 June 2021.

 

How can we help?

If you have any questions or would like further clarification in regards to any of the above measures, please feel free to contact us on 1300 885 761.


Refunds for primary producers and tourist operators

November 2019

The Government has announced an increase in the luxury car tax (LCT) refunds to primary producers and tourist operators for vehicles acquired on or after 1 July 2019. Eligible business owners can claim refunds of up to $10,000 of the LCT paid on "luxury cars". The the current maximum refund is $3,000.

LCT is a tax on cars with a GST-inclusive cost above the LCT thresholds. LCT is imposed at the rate of 33% on the amount above the luxury car thresholds. Primary producers and tourist operators who acquire specified types of cars on which LCT has been paid at the 33% rate are able to apply for a refund of 8/33rd of the LCT. From 1 July 2019 the tax threshold for luxury cars increased to $67,525 and the threshold for fuel efficient luxury cars remained at $75,526.

For LCT purposes, the car must be a four wheel or all-wheel drive that is designed to carry a load of less than two tonnes and fewer than nine passengers and has a ground clearance of not less than 175mm; or is in the category described as "off-road passenger vehicle".

Primary producers -  can only make a refund claim for one car per financial year and must show that at the time of the acquisition they were carrying on a primary production business, including:

  • Plant or animal cultivation
  • Maintaining animals for the purpose of selling them or their bodily produce
  • Manufacturing dairy produce from raw material produced by the primary producers
  • Fishing or pearling
  • Tree farming or felling.

Tourist operators – can claim a refund for each eligible car purchased in a financial year and must show that the cars will be used solely for the purpose of carrying on a business which has the principal purpose is carrying tourists for "tourist activities", including:

  • Scenic beauty
  • Cultural interest
  • Environmental interest
  • Historical interest
  • Recreational interest.

It must not involve transporting of passengers by taxi or limousine for fares or by a hire car service.

The refund must be claimed within four years of becoming entitled to it. These refunds can't be claimed on BAS or from the Department of Home Affairs.

If you would like any further information or assistance with LCT please contact us on 1300 885 761.


Proposed Superannuation Guarantee Amnesty

November 2019

The Federal Government introduced the proposed Superannuation Guarantee (SG) Amnesty Legislation into Parliament on 18 September 2019. The amnesty provides for a one-off amnesty to encourage employers to self-correct historical SG non-compliance and allow employers to claim tax deductions for payments of SG charge or contributions made during the amnesty period to offset SG charge, as well as reducing penalties and fees that may otherwise apply in relation to historical SG non-compliance to nil.

Under existing law, if an employer has missed a payment or has not paid an employee's super on time, the employer is required to lodge a SGC statement and pay the SG charge on any SG shortfall amounts. The SG charge includes a liability for the mandatory administration component of $20 per employee per quarter for SG Charge statements lodged. These late super payments and additional penalties are not tax deductible under the current law.

Requirements to apply for the amnesty:

• During the amnesty period the employer discloses to the Commissioner, in the approved form, information that relates to the amount of SG shortfall for the first time; and

• The Commissioner has not, at any time before the disclosure, informed the employer that the Commissioner is examining or intends to examine, the employer's compliance with an obligation to pay SG charge for the quarter; and

• The employer has not been disqualified from the beneficial treatment under the amnesty.

However, until the proposed amnesty law is enacted by Parliament, the Commissioner will continue to apply the existing law to the SGC statements to be lodged by employers.

If you have any questions or would like further clarification in regards to the proposed SG amnesty, please feel free to give us a call on 1300 885 761 to discuss further.

 

Superannuation Guarantee due date for payment

October 2019

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

Quarter

Period

Payment due date

1

1 July – 30 September

28 October

2

1 October – 31 December

28 January

3

1 January – 31 March

28 April

4

1 April – 30 June

28 July

 

When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

Next date for payment:

Period: 1 July 2019 – 30 September 2019

Payment due date: 28 October 2019

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.


Farm Investment Loans

October 2019

The Australian Government has established the Regional Investment Corporation (RIC) in order to provide concessional loans to eligible farm businesses starting from 1 July 2018. The new loans are for farm businesses that are in need of financial assistance and have sound prospects of long-term financial viability.

The RIC offers Farm investment loan products for farmers to help them build and maintain diversity in the markets and take advantage of new opportunities across the country and overseas.

Loan amount and terms

Farm business owners can borrow up to $2 million for a 10 year term. For the first 5 years, repayments are comprised of interest only, with principal and interest repayments for the final 5 years.

Farmers do not have to repay the full principal in the final 5 years as they are able to refinance the remaining loan balance with a commercial lender.

Current interest rate is 3.58% variable.

1. Fees and charges

There are no ongoing fees and charges.

2. Who can apply

To be eligible, farm business owners must:

  • Be in financial need of a loan
  • Be financially viable in the long term
  • Additional eligibility criteria:
    • have the capacity to repay the loan
    • be able to provide sufficient and satisfactory security for the loan
    • have existing commercial debt
    • be involved within the agricultural, horticultural, pastoral, apicultural or aquacultural industries
    • undertake all primary production aspects of the business wholly within Australia
    • operate as a sole trader, partnership, trust or private company
    • be registered for tax purposes in Australia with an ABN and be registered for GST
    • not be under external administration or bankruptcy.
  • All members of your farm business must not have more non-farm assets and liquid assets than the amount needed for prudent risk management.
  • At least one member of your farm business must:
    • be an Australian citizen or a permanent resident
    • have owned and operated the farm business for at least the past three consecutive years
    • own or lease land and use it for farming purposes (includes agistment)
    • be a farmer who, under normal circumstances, contributes at least 75% of their labour and earns at least 50% of their income from the farm business.

 3. Loan uses

  • Refinance your debt
  • Enhance productivity
  • Fund drought-related activities
  • Pay for operating expenses or capital
    • paying bills, employee salaries or wages
    • succession planning activities
    • investment in new infrastructure like silos and sheds
    • upgrade machinery
    • purchase livestock
    • purchase additional farm land, etc.

Full loan guidelines can be found here (guidelines).

Further information regarding farm investment loans, please go to https://www.ric.gov.au/farmers/farm-investment, or contact us on 1300 885 761 to discuss your circumstances and find out how we can assist.

 

Drought Loans

October 2019

The Australian Government has established the Regional Investment Corporation (RIC) in order to provide concessional loans to eligible farm businesses starting from 1 July 2018. The new loans are for farm businesses that are in need of financial assistance and have sound prospects of long-term financial viability.

The RIC offers Drought loan products for farmers to help them to prepare for, manage through or recover from droughts.

1. Loan amount and terms

Farm business owners can borrow up to $2 million for a 10 year term. For the first 5 years, repayments are comprised of interest only, with principal and interest repayments for the final 5 years.

Farmers do not have to repay the full principal in the final 5 years as they are able to refinance the remaining loan balance with a commercial lender.

Current interest rate is 3.58% variable.

2. Fees and charges

There are no ongoing fees and charges.

3. Who can apply

To be eligible, farm business owners must:

  • Be located in an eligible area (eligible area map)
  • Have a drought management plan
  • Be in financial need of a loan
  • Be financially viable in the long term
  • Additional eligibility criteria:
    • have the capacity to repay the loan
    • be able to provide sufficient and satisfactory security for the loan
    • have existing commercial debt
    • be involved within the agricultural, horticultural, pastoral, apicultural or aquacultural industries
    • undertake all primary production aspects of the business wholly within Australia
    • operate as a sole trader, partnership, trust or private company
    • be registered for tax purposes in Australia with an ABN and be registered for GST
    • not be under external administration or bankruptcy.
  • All members of your farm business must not have more non-farm assets and liquid assets than the amount needed for prudent risk management.
  • At least one member of your farm business must:
    • be an Australian citizen or a permanent resident
    • have owned and operated the farm business for at least the past three consecutive years
    • own or lease land and use it for farming purposes (includes agistment)
    • be a farmer who, under normal circumstances, contributes at least 75% of their labour and earns at least 50% of their income from the farm business.

4. Loan uses

  • Refinance existing debt
  • Enhance productivity
  • Fund drought-related activities
  • Pay for operating expenses or capital expenditure
    • paying bills, employee salaries or wages
    • succession planning activities
    • planting activities
    • restocking activities, etc.

Full loan guidelines can be found here (guidelines).

Further information regarding drought loans, please go to https://www.ric.gov.au/farmers/drought, or contact us on 1300 885 761 to discuss your circumstances and find out how we can assist.

 

Pre-filling changes for 2019

September 2019

The pre-filling service is available to tax agents, and provides information about your income and expenses that the ATO has obtained from various organisations.  The service helps us to ensure the accuracy of income tax returns we prepare by allowing the cross-checking of the information you provide.

The information provided by the service in 2019 is wide ranging, and includes:

  • Tax return data from previous years,
  • Financial information from government agencies, private health funds, banks and companies,
  • Personal superannuation contribution deductions,
  • First home super saver scheme information,
  • Details of payments made to cleaners and couriers,
  • Early stage innovation company information
  • Salaries and tax withheld, as reported through the Single Touch Payroll system,
  • Private health insurance statement information.

Please note that the pre-filling information only reflects the data received by the ATO, and may contain omissions or errors.  Some data may be absent or unavailable because the third-party data provider has not supplied data yet. Accordingly, it is best to continue to maintain your own taxation records, in order to ensure that your taxation returns are correct and accurate.

If you require further information regarding the pre-fill service, please contact us on 1300 885 761 to discuss and find out how we can assist.

 

Fuel tax credits

September 2019

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

  • Be registered for GST
  • Use the fuel for an eligible activity including but not limited to:  
    • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
    • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 5 August 2019 to 31 January 2020 are as follows:

  • Increase from 15.8 to 16.0 cents per litre for liquid fuels used in a heavy vehicle on public roads;
  • Increase from 41.6 to 41.8 cents per litre for liquid fuels in all other business uses;
  • Increase from 15.505 to 15.62 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
  • Increase from 13.6 to 13.7 cents per litre for liquefied petroleum gas (LPG) ; and
  • Increase from 28.5 to 28.7 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for December quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.                          

Please contact us on 1300 885 761 for more information.  


MyGov communication issues

September 2019

MyGov is a Federal Government website designed to provide an electronic alternative to paper based correspondence. If you have a myGov account and have linked it with the ATO, you will receive tax related messages directly from the ATO to that account. These messages can be found in your myGov Inbox rather than receiving paper letters through the post.

New message notifications from myGov

If you activate this facility, you can receive emails or SMS notifications from myGov to let you know when there are new messages in your myGov inbox. You can also change your inbox notification preference by logging into your account and select the 'Account Settings' icon and select 'Inbox alerts'.

The types of ATO mail you may receive in your myGov Inbox include:

  • Notices of assessment
  • Statements of account
  • Confirmation and reminder notices
  • Activity statements and instalment notices

ATO correspondence with Dawson & Partners

Having your MyGov account linked to the ATO prevent us from being able to view the digital letters, SMS and emails that the ATO have sent to your myGov inbox. This prevent us having the opportunity to review the correspondence and determine any action that may be required before contacting you. There is also a risk correspondence could be missed if you do not regularly monitor your myGov inbox.

Unlinking the ATO from myGov account

If you are happy to receive your ATO correspondence directly and are monitoring your inbox you can keep you myGov account linked to the ATO. If you would prefer to have us monitor the correspondence please unlink the ATO from your myGov account. This will mean you will no longer be able to see ATO messages in your inbox and future correspondence will be sent directly to us to be actioned.

Further information regarding myGov Inbox can be found here.

If you have problems, or need help with your myGov Inbox or ATO messages, please contact us on 1300 885 761 to discuss your issues and find out how we can assist.

 

Recent criminal changes to the Director Penalty Notice regime

August 2019

The Director Penalty Notice regime applies to a director or former director of a company when the company fails to meet its pay as you go (PAYG) withholding or superannuation guarantee (SGC) obligations.

If the company has not compiled with these obligations by the due date, a notice may be issued by the ATO and the company's directors will be held personally liable for the penalty amount until it is paid in full.

Criminal sanctions were introduced on 1 April 2019 in addition to existing monetary penalties. Under these new provisions the commissioner may issue a notice requiring the director to pay an amount of outstanding SGC. A director who receives the notice but fails to discharge the liability before the timeframe mentioned in the notice, is deemed to have committed an offence.

The offence is a strict liability offence, for which the penalty is currently 50 penalty units ($10,500), or imprisonment for 12 months, or both.

However, the offence provisions will not apply if all reasonable steps were taken to comply with the notice before the end of the period specified, and all reasonable steps were taken to ensure that the liability was discharged before the direction was given.

These new provisions and the existing DPN provisions provide greater power to the ATO in seeking to ensure that companies meet their statutory obligations.

Key elements considered before the Commissioner issues a notice:

  • The history of compliance with meeting the SGC;
  • The history of compliance with other tax related liabilities;
  • The amount of the debt having regard to the size and nature of the business;
  • Any steps that have been taken to discharge the liability and any other matter that the Commissioner considers relevant.

The notice will include:

  • The amount that is required to be paid;
  • Where relevant, the quarter to which the obligation relates;
  • The period before which the obligation must be discharged (which must end at least 21 days after the date the notice is given);
  • The consequences of failing to comply with the notice; and
  • An explanation of how the Commissioner's decision may be reviewed.

There has also been a further tightening in the "Lock Down" provisions relating to superannuation obligations. Under the new provisions, a company is required to report the unremitted superannuation prior to the due date for payment. Accordingly, amounts need to be reported to the ATO prior to the 28th days after the end of the quarter for which the superannuation period relates. Once the "Lock Down" date has passed, the director will become personally liable for the unpaid amounts.

If you have any concerns please contact us on 1300 885 761 to discuss your circumstances and find out how we can assist.

 

Taxable payments annual report due 28 August 2019

August 2019

If you are running a business providing building construction services, cleaning services or courier services, you will need to lodge a Taxable payments annual report (TPAR) by 28 August each year. Penalties may apply for not lodging your annual report by the due date.

The TPAR contains information about payments to contractors that businesses in these industries must report to the ATO.

You will need to lodge TPAR if you:

  • are a business in the building and construction industry and have made payments to contractors for building and constructions services, or
  • provide cleaning services and made payments to contractors for cleaning services, or
  • provide courier services and made payments to contractors for courier services, or
  • provide road freight services and made payments to contractors for road freight services, or
  • provide information technology (IT) services and made payments to contractors for IT services, or
  • provide security, investigation or surveillance services and made payments to contractors for those services, or
  • provide mixed services (i.e. one or more of the services listed above).

Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders, companies, partnerships or trusts.

The detail that you need to report about each contractor can be found on the invoice you should have received from them, and includes:

  • Australian business number (ABN), if known,
  • Name and Address and
  • The gross amount you paid to them for the financial year (including any GST).

The Taxable payments report can be lodged online or by completing a paper form.  If you are unable to lodge online, you can order the TPAR paper form from the ATO publications ordering service.

If you would like any further information or assistance with lodging your taxable payments annual report please contact us on 1300 885 761.


Single Touch Payroll ready by 30 September

August 2019

On 1 July 2019, reporting through Single Touch Payroll (STP) came into effect for all employers including small business employers with 19 or less employees. The Australian Taxation Office is taking a lenient approach at present, but small businesses nevertheless need to start reporting by 30 September 2019 at the latest.

Under STP employers are required to report payments to the ATO, including salaries and wages, pay as you go withholding (PAYG) and superannuation information, directly from their payroll software each time they pay their employees.  

If you are an employer, you will no longer be required to provide payment summaries to your employees at year-end as all reporting is finalised through STP. Your employees will be able to access their payment summary, year-to-date-tax and super information online through their myGov accounts.

There will be no penalties applied if you get something wrong and you correct it within an appropriate period for the 2020 financial year.

How to report:

If you don't currently have a payroll solution or service and want to discuss your options, contact us and find out how we can assist.

If you already use a payroll solution, you can report through it as long as it's been updated to offer STP reporting.

There is also a range of no-cost and low-cost STP solutions that have been created for micro employers (those with one to four employees) who need to report through STP but do not currently have STP ready software. These solutions are affordable at a cost of less than $10 per month, which include mobile apps, simple reporting solutions and portals. The available list can be found here

Further information on Single Touch Payroll can be found here.

Please feel free to contact us on 1300 885 761 if you would like further clarification.


Superannuation Guarantee due date for payment

July 2019

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

 

Quarter

Period

Payment due date

1

1 July – 30 September

28 October

2

1 October – 31 December

28 January

3

1 January – 31 March

28 April

4

1 April – 30 June

28 July


When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

  

Next date for payment:

Period: 1 April 2019 – 30 June 2019

Payment due date: 28 July 2019

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.


New Financial Year Resolutions

June 2019

Like New Years, the end of the financial year is time to reflect on the past year and take stock.

Here are some tips and areas to focus on to help your business grow and achieve your financial goals:

1. GET YOUR ACCOUNTING SOFTWARE UP TO DATE

If you're using traditional desktop accounting software or Excel spreadsheets, think about the benefits of moving to cloud accounting. Cloud accounting makes it easy to access your business accounts from anywhere, at any time. Cloud or online accounting is secure, with powerful encryption and remote backups so there's less chance of your vital business information being lost or stolen.

To help determine which accounting software program is right for you, please download our free app and complete our cloud accounting survey and we will contact you to discuss the results.

Download the app from Google Play store here.

Download the app from the apple store for iPhones here.

2. REVIEW YOUR SYSTEMS AND PROCESSES

As a business matures and evolves, owners often forget to look at their systems and processes, such as invoicing or payroll. Whilst it can be a tedious task to review or implement a new way of doing things, the long-term benefits can save you time and money.

3. STAY UP TO DATE WITH LODGEMENT DEADLINES

Make sure you are aware of your lodgement and tax payment deadlines. Set up your calendar with appropriate alerts and reminders for the coming year. Contact us if you are unsure of your deadlines.

Our free app includes a calendar function to assist with keeping up with deadlines.

4. CHANGES TO SUPER

The new financial year is a perfect time to consider your nest egg. A good place to start is to consider making concessional (tax deductible) contributions into your superannuation fund. Before you make a contributions please give us a call to ensure you are making the most of your contributions. 

5. REVIEW YOUR INSURANCE

Make sure your insurance is appropriate for your circumstances. Over time your needs change; those with young families may require higher cover compared to those who are nearing retirement.

If you would like to review your current arrangements, feel free to get in touch with our insurance specialist, Angus Stephen on 1300 885 761 or email at astephen@dawson.com.au for an initial no obligation discussion. 


6. UPDATE YOUR WILL 

 

Your will is like a car. It needs regular maintenance to stay in good working order. Life and circumstances change over time, and your will should reflect those changes. If it has been 2 or more years since you last reviewed your will, take the time to consider whether it is still appropriate for your wishes.


FOLLOWING THROUGH ON YOUR FINANCIAL RESOLUTIONS

We look forward to working with you in the coming year to help you achieve your new financial year resolutions.

If you would like more information or assistance with your new financial year resolutions, contact us on 1800 885 761.

Happy New Year!


The Cloud is here!!!

June 2019

Are you ready for the cloud? Do you even know what the cloud is? Fear not, we are here to help you understand cloud accounting software.

1. What is cloud accounting?

Cloud accounting, also known as "online accounting", is simply using the internet to access your accounting software rather than physically installing it on a computer.

2. Did you know that you're already using cloud computing?

Many people are actually using cloud computing without realising it. For example anyone with Hotmail or Gmail email accounts are already "in the cloud", as the software and data is stored remotely and is accessible from any computer, not just your computer.

3. Why is cloud accounting good for your business?

Cloud-based accounting software offers a number of benefits for businesses including:

  • The cloud alleviates the need for businesses to store and manage data and maintain expensive computer hardware;
  • The information can be updated and accessed from any computer anywhere in the world, provided it is secure;
  • As all files are password protected, they are kept safe in the cloud, and only authorised users such as your accountant can access them;
  • There is only one ledger kept and that is the file in the cloud.  This improves the accuracy of the information and minimises errors at BAS and tax time;
  • We can access your system and interact with you in real time, eliminating the need for you to repeatedly send your data file to us;
  • A monthly access fee is paid which usually works out less than the cost of buying the software and paying for updates and support subscriptions; and
  • The software is automatically kept up-to-date by the provider meaning that you don't need to download any updates.  

4. Why is this good for us (and good for you)?

Cloud accounting is simplifying and streamlining data sharing between accountant and client. Instant access to your accounting software means higher efficiency and accuracy when completing your accounts, and less disruption to you and your business for any subsequent adjustments or corrections.

In addition to end of year efficiencies, it makes it more efficient for us to provide proactive and timely advice on issues impacting on your business. This will help to keep your business on track and comply with your reporting obligations.

To find out more please contact us on 1300 885 791.

You can also download our app and take our Cloud Accounting Survey to help us better understand your needs and determine which cloud accounting software is right for you.

Download the app from Google Play store here.

Download the app from the apple store for iPhones here.


Prepare now for the end of the financial year

June 2019

If your finances are not receiving the attention they should here are some tax-effective strategies that you can implement now to help build and protect wealth in a tax effective way.

Superannuation

Salary sacrifice: If you're an employee, you could look at contributing to superannuation through salary sacrifice, thereby reducing your taxable income. In the long term, salary sacrificing has many benefits as it not only helps to increase your superannuation savings but could also reduce the amount of tax you pay.

Make a personal deductible contribution: Individuals may find themselves in a situation where they can significantly boost their retirement savings, as well as reduce their taxable income by making a personal deductible contribution.

Contribution caps: These are the maximum deductible contribution limits. For the 2018/19 year the contribution cap is $25,000 per person per year. The cap remains at $25,000 per person per year for the 2019/20 year.

Private health insurance

You may be required to pay the Medicare levy surcharge if your income is above the threshold and you or your family do not have an appropriate level of private patient hospital cover.

If your base income for Medicare levy purposes is above $90,000 for singles and $180,000 for families, the rate of the surcharge can be as high as 1.5%. This is over and above the base Medicare rate of 2%.

Private patient hospital cover is provided by registered health insurers for hospital treatment provided in an Australian hospital or day hospital. You must arrange and pay for your cover directly with the insurer.

For more information on Private Health Insurance click here.

A tax deductible way to manage risk

Income protection insurance can be an essential part of any financial plan, designed to secure your family's lifestyle in the event of illness or injury.  Income protection insurance premiums are generally tax deductible and business owners may also be able to claim deductions on their business insurance premiums.

Immediate write off for businesses

Small businesses with an aggregated turnover of less than $10 million using "Small business depreciation" can immediately deduct assets costing less than $30,000 purchased after 2 April 2019. Medium business with turnover below $50 million can also claim this concession. Just like any other business asset, you'll need to keep records to support any claims for a deduction so ensure you keep the tax invoice for the purchase.

Before you act

Before implementing any of these strategies please contact us on 1300 885 761 to ensure they are the best strategies for you.

 

The Major Parties' Superannuation and Tax Policies

May 2019

The federal election has been called for May 18 and both major parties have outlined their superannuation and tax policies. With the federal election only weeks away many of our clients have been asking what the major political parties' policies are that may impact their SMSF, individual taxation circumstances or personal investments.

Liberal-National Coalition

Superannuation

  • Australians aged 65 and 66 will be able to make voluntary superannuation contributions without needing to work a minimum amount. Previously, this was only available to individuals below 65.
  • Extending access to the bring-forward arrangements (the ability to make three years of post-tax contributions in a single year) to individuals aged 65 and 66.
  • Increasing the age limit for individuals to receive spouse contributions from 69 to 74.
  • Reducing red-tape for how SMSFs claim tax deductions for earnings on assets supporting superannuation pensions.
  • Delaying the implementation of SuperStream (electronic rollovers for SMSFs and superannuation funds) until March 2021 to allow for greater usability.

Taxation

  • From 2018-19 taxpayers earning between $48,000 and $90,000 will receive $1,080 as a low and middle income tax offset. Individuals earning below $37,000 will receive a base amount of $255 with the offset increasing at a rate of 7.5 cents per dollar for those earning $37,000-$48,000 to a maximum offset of $1,080.
  • Stage 1 tax cuts: From 1 July 2018, increasing the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
  • Stage 2 tax cuts: From 1 July 2022, increasing the top threshold of the 19 per cent personal income tax bracket from $41,000, to $45,000.
  • Stage 3 tax cuts: From 1 July 2024, reducing the 32.5 per cent marginal tax rate to 30 per cent which applies from $120,000 to $200,000. The 37 per cent tax bracket will be abolished.

  Australian Labor Party 

Superannuation

  • Disallowing refunds of excess franking credits from 1 July 2019 – this would mean SMSF members in pension phase no longer receive refunds for the franking credits they receive for their Australian share investments.
  • Banning new limited recourse borrowing arrangements.
  • Reducing the post-tax contributions cap to $75,000 per year down from $100,000.
  • Ending the ability to make catch-up concessional contributions for unused cap amounts in the previous five years.
  • Ending the ability for individuals to make personal superannuation tax deductible contributions unless less than 10 per cent of their income is from salaries.
  • Lowering the higher income 30per cent super contribution tax threshold from $250,000 to $200,000.

Taxation 

  • Labor supports the stage 1 tax cuts and will match the $1,080 low and middle income tax offset. From 1 July 2018, individuals earning below $37,000, will get a $350 a year tax offset, with this amount increasing for those earning between $37,000- $48,000 to the maximum $1,080 offset.
  • Introduce a 30 per cent tax rate for discretionary trust distributions to people over the age of 18.
  • Will limit negative gearing to newly built housing from January 1 2020. (Existing investments are grandfathered under the current law)
  • Reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. (Existing investments are grandfathered under the current law)
  • Limit the deductions for the cost of managing tax affairs to $3,000.

How can we help?

If you have any questions or would like further clarification in regards to how the above policies may affect you, please feel free to give us a call on 1300 885 761 to discuss further.


Don't be surprised by tax next year

April 2019

Tax planning is a useful tool used by many taxpayers to legally minimise their tax. A tax plan will also help you plan for upcoming tax payments that may be required.

Our annual tax planning service involves estimating your potential tax position for the financial year and looking at strategies you can implement prior to 30 June that may reduce your tax liability and enhance your financial position.

Once we have completed your tax estimates, we will generally meet with you to discuss the results and our proposed tax planning strategies.

Tax plans can be completed on an annual basis, or at any time of the year for specific events such as:   

  • You are starting a new business and would like to know which trading structure would be the most tax effective for your situation;
  • Your situation has changed and you would like to know what options you have to change your structure; or
  • You have sold or are planning to sell an asset during the year and there may be capital gains tax implications. 

If you would like to know more contact us on 1300 885 761.


Federal Budget leaves superannuation largely untouched

April 2019

This Federal Budget provided some changes to superannuation administration which will be helpful to SMSF members and trustees. Overall, this was one of the rare budgets which did not wind back the benefits of superannuation for savers and retirees.

The key changes proposed for SMSFs and superannuation are:

Greater flexibility for retirement contributions

From July 1 2020, Australians aged 65 and 66 will be able to make voluntary superannuation contributions, both concessional and non-concessional, without meeting the Work Test. Currently, this is only available to individuals below 65.

This will align the Work Test with the eligibility age for the Age Pension, which is scheduled to reach 67 from 1 July 2023. It is forecast that there are around 55,000 Australians aged 65 and 66 who will benefit from this reform in 2020-21.

The prepared changes also extend access to the bring-forward arrangements to individuals aged 65 and 66 which allows individuals to make three years' worth of non-concessional contributions to their super in a single year. 

The Government has also increased the age limit for spouse contributions from 69 to 74. Currently, those aged 70 years and over cannot receive contributions made by another person on their behalf.

The Work-Test-Exemption which allows individuals a further year to voluntarily contribute to superannuation after they have finished working will still apply to individuals from 67 to 74.

Reducing red tape for superannuation funds - ECPI changes

The Government will streamline administrative requirements for the calculation of exempt current pension income (ECPI) by allowing superannuation fund trustees with interests in both the accumulation and retirement phases during an income year to choose their preferred method of calculating ECPI, rather than having to use the services of an Actuary.

This change will reduce unnecessary red-tape for SMSFs in pension phase.

Reducing costs for super industry by including superannuation release authorities in electronic SuperStream Rollovers


The Government will provide $19.3 million over three years from 2020-21 to the Australian Taxation Office (ATO) to send electronic requests to superannuation funds for the release of money required under a number of superannuation arrangements. This is an improvement on the current process which includes physical documentation.

The start date of SMSF rollovers in SuperStream will be delayed until 31 March 2021 to coincide with these changes.

How can we help?

If you have any questions or would like further clarification in regards to any of the above measures, please feel free to contact us on 1300 885 761.


2019/20 Federal Budget Highlights

April 2019

The Federal Treasurer, Mr Josh Frydenberg, handed down the 2019/20 Federal Budget on Tuesday 2 April 2019.

Mr Frydenberg said the Budget is "back in the black", announcing a budget surplus of $7.1b for 2019/20. The government proposes various changes to further lower individual taxes, including increasing the low and middle income tax offset, and lowering the 32.5% marginal rate to 30% in 2024/25.

The tax, superannuation and social security changes that may impact you are set out below:

Income Tax

  • Proposed changes to the instant asset write-off threshold listed below (Changes from 29 January 2019 still need to be legislated):

Asset first used or installed

ready for use between:

Small business threshold (turnover less than $10m)

Medium business threshold (turnover less than $50m)

1 July 2018 to 28 January 2019

$20,000

N/A

29 January 2019 to Budget night

$25,000

N/A

Budget night to 30 June 2020

$30,000

$30,000

 Tax integrity and black economy

  • To retain their Australian Business Number (ABN), holders will be required to lodge their income tax return and confirm the accuracy of their details on the Australian Business Register annually.
  • The start date of amendments to Div 7A will be delayed by 12 months to 1 July 2020 and will undergo further consultation.
  • The ATO will receive funding to increase activities to recover unpaid tax and superannuation liabilities with a focus on large businesses and high wealth individuals.
  • A dedicated sham contracting unit will be established within the Fair Work Ombudsman to address sham contracting behaviour by some employers, particularly those who knowingly or recklessly misrepresent employment relationships as independent contracts to avoid statutory obligations such as superannuation guarantee and other employment entitlements.

Superannuation

  • Members of regulated superannuation funds will not have to meet the work test in order to make contributions after 1 July 2020 if they are 65 or 66 years of age.

Indirect taxes

  • For vehicles acquired on or after 1 July 2019, eligible primary producers and tourism operators will be able to apply for a refund of any luxury car tax paid, up to a maximum of $10,000. Currently, primary producers and tourism operators may be eligible for a partial refund of the luxury car tax paid on eligible four-wheel or all-wheel drive cars, up to a maximum refund of $3,000. The eligibility criteria and types of vehicles eligible for the current partial refund will remain unchanged under the new refund arrangements.

Social security

  • There will be a one-off Energy Assistance Payment of $75 for singles and $62.50 for each member of a couple eligible for qualifying payments on 2 April 2019 and who are resident in Australia. Qualifying payments include the Age Pension, Carer Payment, Disability Support Pension, Parenting Payment Single, the Veterans' Service Pension and the Veterans' Income Support Supplement, Veterans' disability payments, War Widow(er)s Pension, and permanent impairment payments under the Military Rehabilitation and Compensation Act.
  • Single Touch Payroll reports lodged by employers will be shared with social security agencies from 1 July 2020.
  • From 1 July 2019, net income generated from the forced sale of livestock will be exempted from the Farm Household Allowance payment assessment, when that income is invested into a farm management deposit.

Please feel free to contact us on 1300 885 761 if you have any questions or would like further information in regards to any of the above changes.


Changes to depreciation rules

February 2019

In the lead up to the Federal election in May 2019, the Government has announced several tax changes which may affect your primary production business for the 2019 financial year and beyond. The key changes include:

Accelerated depreciation for primary producers

Previously capital expenditure on fodder storage assets was deductible over three years. A deduction for the first income year is equal to one-third of the cost and the same amount is claimed in each of the following two income years.

From 19 August 2018, the Government has introduced a full deduction for the cost of a fodder storage asset, if you:

  • Purchased the asset either on or after 19 August 2018;
  • Purchased the asset before 19 August 2018 and it was first used or installed ready for use on or after 19 August 2018;
  • Mainly use it to store fodder;
  • Use it in a primary production business on land in Australia – even if you are only a lessee of the land.

Examples of fodder storage assets include silos, liquid feed supplement storage tanks, bins for storing dried grain, hay sheds, grain storage sheds and above-ground bunkers for silage all qualify for this treatment.

Simplified depreciation rules – instant asset write-off

Currently the $20,000 immediate write off for small business with aggregated annual turnover less than $10 million ends on 30 June 2019. Assets must cost less than $20,000 (excl GST) whether new or second hand and first used or installed ready for use on or before 30 June 2019 in order to qualify.

The Government has announced an increase to the instant asset write-off threshold from $20,000 to $25,000 from 29 January 2019 until 30 June 2020. This proposal is not yet law.

The full list of ATO drought measures can be viewed by following this link http://www.agriculture.gov.au/ag-farm-food/drought/assistance/tax-relief.

If you require any further information or wish to discuss these changes please contact us on 1300 885 761.


Fuel tax credits

February 2019

Who can claim Fuel Tax credits?

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

  • Be registered for GST
  • Use the fuel for an eligible activity including but not limited to:
    • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
    • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits are now indexed bi-annually on 1 February and 1 August in line with the Consumer Price Index (CPI).

The indexed rates for the period from 4 February 2019 to 30 June 2019 are as follows:

  • Increase from 15.4 to 15.8 cents per litre for liquid fuels used in a heavy vehicle on public roads
  • Increase from 41.2 to 41.6 cents per litre for liquid fuels in all other business uses;
  • Increase from 13.065 to 13.210 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
  • Increase from 13.4 to 13.6 cents per litre for liquefied petroleum gas (LPG) ; and
  • Increase from 28.2 to 28.5 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for March quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  


ALP Franking Credit Policy

January 2019

In March 2018, the Australian Labor Party (ALP) announced a policy to ban the refund of excess franking credits.  There has been a lot of debate and noise around what this could mean for Self-Managed Super Funds (SMSFs), so it may be helpful to know the facts.

What are franking credits and how do they benefit your SMSF?

Under our tax system most companies pay 30 per cent tax on their profits. When these profits are passed on to their shareholders in the form of dividends, the company also provides the shareholders a credit for the tax the company has already paid (the "franking credit").

Each shareholder then pays tax on the profit they received from the company less the credit for the tax the company has already paid.  The "franking credit" ensures that the company profits are taxed at a shareholder's marginal tax rate.

SMSFs in retirement phase, which generally have a zero tax rate, may then receive a full refund of the franking credit when they lodge their annual tax return.

SMSFs who have members in accumulation phase benefit from franking credits reducing the tax they pay on their earnings and may receive partial refunds of their franking credits depending on the fund's overall tax liability.

What is Labor's policy?

If elected, Labor will ban refunds of excess franking credits. This means that SMSFs which currently receive a refund from the Australian Taxation Office because the amount of franking credits they receive exceeds the tax they need to pay, will no longer receive the refund.

SMSFs that had a member receiving the age pension on or before 28 March 2018 will still be eligible to receive franking credit refunds under Labor's "Pensioner Guarantee" if the policy goes ahead.

What is the impact on you?

Please contact us on 1300 885 761 if you wish to discuss more specifically the impact this policy would have upon your own retirement plans.

 

Superannuation Guarantee due date for payment

January 2019

All employers are now required to pay and report super guarantee payments electronically to ensure they meet SuperStream requirements. With the introduction of SuperStream it is now easier for the ATO to monitor your payments to ensure they have all been paid on time.

Super guarantee payments must be made by employers to their employees' complying funds by quarterly due dates, which are 28 days after the end of each quarter.

The due dates for each quarter are as follows:  

 

Quarter

Period

Payment due date

1

1 July – 30 September

28 October

2

1 October – 31 December

28 January

3

1 January – 31 March

28 April

4

1 April – 30 June

28 July


When a due date falls on a weekend or public holiday, you can make the payment on the next working day.

If you miss the due date your payment will NOT be tax deductible.

Please note the above due dates in your calendar and ensure all superannuation guarantee payments are made on or before these dates. 

  

 Next date for payment:

Period: 1 October 2018 – 31 December 2018

Payment due date: 28 January 2019

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

Is your SMSF adequately diversified?

January 2019

In the unsettled and volatile markets of today, SMSF trustees need to truly understand diversification and know how to effectively diversify their portfolios.

The benefits of a well-diversified portfolio are numerous but the key ones are:-

  • Reducing volatility and short-term downside investment risks,
  • Preservation of capital, and
  • Higher overall returns in the long term.

By spreading an SMSF's investments across different asset classes and markets, each of which offers different risks and returns, SMSF trustees can generally position themselves for a more secure retirement.

While most trustees know this, many do not achieve it in practice.

A recent survey conducted by the Self-Managed Super Fund Association showed that although 82% of SMSF trustees believe that diversification is important, roughly 50% cite various barriers to achieving it.  Many believe that it is not a primary goal for SMSF trustees, or that they lack the funds to implement it.

Furthermore, only 36% of SMSF trustees say they have made a significant (10%) asset allocation change to their SMSF over the last 12 months, which indicates that many SMSFs may not be actively restructuring their portfolios in response to changing market conditions.

Other facts about SMSFs which indicate a problem with diversification include:-

  • Many SMSFs have 50% or more of their SMSF invested in a single investment, and
  • Many SMSFs are heavily weighted towards domestic equities, and trustees tend to rely on industry sector allocation to achieve diversification in their SMSF, rather than allocating to different asset classes, such as global equities, fixed interest and alternatives.

So what can you do?

If your SMSF is not sufficiently diversified, there is good reason to take control of your investments in a more disciplined and deliberate way.  This may include:

  • Ensuring there is a clear and demonstrable retirement purpose in the choices you make.
  • Ensuring you have an investment objective and a strategy to achieve that objective.
  • Reviewing your portfolio regularly and assessing it against the objectives you have set.
  • Minimising concentration to any one asset class.
  • Ensuring your Australian share portfolio is sufficiently diversified.
  • Considering the benefits of geographic diversification.
  • Ensuring your cash allocation is appropriate.
  • Considering the benefits of exchange traded funds, listed investment companies and other digital investment platforms that allow low cost access to different markets.

How can we help?

If you need assistance with the diversification of your fund, please feel free to contact us on 1300 885 761 to discuss your particular circumstances in more detail.


Farm Investment Loans and Drought Loans

December 2018

The Australian Government has established the Regional Investment Corporation (RIC) in order to provide concessional loans to eligible farm businesses starting from 1 July 2018. The new loans are for farm businesses that are in need of financial assistance and have sound prospects of long-term financial viability.

The RIC will offer two loan products for farmers:

  • Farm Investment Loans: to help farmers build and maintain diversity in the markets and take advantage of new opportunities across the country and overseas.
  • Drought Loans: to help farmers affected by drought and prepare for future droughts.

1. Loan amount and terms

Farm business owners can borrow up to $2 million for a 10 year term. For the first 5 years, repayments are comprised of interest only, with principal and interest repayments for the final 5 years.

Farmers do not have to repay the full principal in the final 5 years as they are able to refinance the remaining loan balance with a commercial lender.

Current interest rate from 1 July 2018 is 3.58% variable, which is reviewed every six months with new rates coming into effect in February and August each year.

2. Fees and charges

There are no ongoing fees and charges.

3. Who can apply

To be eligible, farm business owners must:

  • Be located in an eligible area (eligible area map)
  • Have a drought management plan
  • Be in financial need of a loan
  • Be financially viable in the long term
  • Additional eligibility criteria:
    • have the capacity to repay the loan
    • be able to provide sufficient and satisfactory security for the loan
    • have existing commercial debt
    • be involved within the agricultural, horticultural, pastoral, apicultural or aquacultural industries
    • undertake all primary production aspects of the business wholly within Australia
    • operate as a sole trader, partnership, trust or private company
    • be registered for tax purposes in Australia within an ABN and be registered for GST
    • not be under external administration or bankruptcy.
  • All members of your farm business must not have more non-farm assets and liquid assets than the amount needed for prudent risk management.
  • At least one member of your farm business must: 
    • be an Australian citizen or a permanent resident
    • have owned and operated the farm business for at least the past three consecutive years
    • be a farmer who, under normal circumstances, contributes at least 75% of their labor and earns at least 50% of their income from the farm business.

4. Loan uses

  • Drought loans 
    • pay for water infrastructure, grain storage or fencing
    • buy fodder
    • agist livestock
    • pay to restock to replant
    • pay outstanding bills
    • pay salaries or wages to employees etc.

  • Farm investment loans 
    • investment in new infrastructure like silos and sheds
    • upgrade machinery
    • purchase livestock etc.

Full loan guidelines can be found here (guidelines).

Further information regarding loans for farmers, please go to http://ric.gov.au/farmers, or contact us on 1300 885 761&