Grant News – April 2021

Grant News – April 2021

Grant News – April 2021

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Small Business Fees & Charges Rebate – NSW

Sole Traders, small business owners and not-for-profit organisations may be eligible for small business fees and charges rebate of $1,500.

This rebate aimed at helping businesses recover from the impacts of COVID-19 by reducing the cost of running a business.

Are you eligible for the grant?

To be eligible for the grant you must;

  • Have total Australian wages below the payroll tax threshold of $1.2 million
  • Have an Australian Business Number (ABN) registered in NSW and/or have business premises physically located and operating in NSW
  • Be registered for goods and services tax (GST)
  • Provide a declaration that the business has a turnover of at least $75,000 per year.

How much is the grant?

Businesses will receive a once-off payment of $1,500.

When is the grant available until?

The rebate will be available until 30 June 2022

How can I apply?

  • You’ll need to provide invoices and receipts showing payment of eligible fees or charges.
  • Two proof of identity documents are required e.g. driver licence, Medicare card, passport, birth certificate

You can apply through the NSW Government website

Relocation Assistance to Take Up a Job Grant

The Australian Government has announced this grant to assist jobseekers in taking up a job where relocation is required. Below are the details;

From 1 May 2021, if jobseekers relocate to take up ongoing work, including an apprenticeship, for more than 20 hours a week for more than six months, you may be eligible to receive up to:

  • $3,000 if you relocate to a capital city
  • $6,000 if you relocate to a regional area
  • An extra $3,000 if you relocate with a dependent.

If relocating from one capital city to a capital city with fewer jobs, you may not be able to access relocation assistance.

Employment services providers can use up to $2,000 to provide upfront support to job seekers who need assistance with agreed relocation costs.

How can I apply?

Talk to our local jobactive, Disability Employment Services, ParentsNext, Transition to Work, or Community Development Program provider.

For more information view the factsheet

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Practice Update April 2021

Practice Update April 2021

Practice Update – April 2021 Edition

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JobKeeper comes to an end

The ATO has advised that the final JobKeeper payment will be processed in April 2021.

Enrolled businesses do not have to do anything when the program closes, although they will need to complete their final March monthly business declaration by 14 April 2021.

Also, once a business is no longer claiming JobKeeper Payments, it may start to be eligible to receive the JobMaker Hiring Credit for any additional employees that started employment on or after 7 October 2020.

ATO loses case on JobKeeper and backdated ABNs

On 24 March 2021, the Full Federal Court handed down its decision in a case concerned with the requirement that an entity claiming JobKeeper must have had an ABN on 12 March 2020, or a later time allowed by the ATO.

The Registrar of the Australian Business Register had reactivated the relevant entity’s previously cancelled ABN after 12 March 2020, but with a backdated effective date on or before 12 March 2020. 

The Court held that backdating an ABN to have an effective date on or before 12 March 2020 did not satisfy the requirement for the entity to have had an ABN on 12 March 2020.

However, the Court also held that the ATO’s decision not to allow the entity a “later time” to have an ABN was a “reviewable decision”, and that the Commissioner’s discretion should be exercised in these circumstances (i.e., the Court held that the entity should be entitled to JobKeeper).

The Court’s decision does not change the need to satisfy all of the other eligibility requirements.

Editor: Where the ATO has postponed finalising a decision regarding a taxpayer’s eligibility for JobKeeper (and/or the cash flow boost) pending the Court’s decision, the ATO will contact the affected taxpayer shortly to provide them with an update.

First criminal conviction for JobKeeper fraud

A person claiming to be a sole trader was convicted of three counts of making a false and misleading statement to the Commissioner of Taxation, in order to receive $6,000 in JobKeeper payments to which he was not entitled, as he was not operating a genuine business and he had already agreed to be nominated by his full-time employer for the allowance.

The ATO has a dedicated integrity strategy that supports the administration of the Government’s stimulus packages, with robust and efficient compliance systems that make it very easy to identify fraudulent behaviour and stop it.

ATO Deputy Commissioner Will Day said “Since the first payments were made in April, the ATO has monitored every payment, every day, every month, and will continue to do so until the last payment is made.”

ATO’s taxable payments reporting system update

The ATO has confirmed that more than 60,000 businesses have not yet complied with lodgment requirements under the taxable payments reporting system (‘TPRS’) for 2019/20.

The TPRS is a black economy measure designed to assist the ATO to identify contractors who don’t report or under-report their income.

The ATO estimates that around 280,000 businesses need to lodge a Taxable payments annual report (‘TPAR’) for the 2020 financial year.

Importantly, 2020 was the first year that businesses that pay contractors to provide road freight, information technology, security, investigation, or surveillance services may need to lodge a TPAR with the ATO (in addition to those businesses providing building and construction, cleaning, or courier services).

Businesses who have not yet lodged need to lodge as soon as possible to avoid penalties.

ATO Assistant Commissioner Peter Holt added that some businesses may not realise they need to lodge a TPAR, but may be required to, depending on the percentage of payments received for deliveries or courier services.

“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers.  These businesses may not have previously needed to lodge a TPAR.  However, if the total payments received for these deliveries or courier services are 10% or more of the total annual business income, you’ll need to lodge,” Mr Holt said.

FBT rates and thresholds for the 2021/22 FBT year

The ATO has updated its webpage containing the fringe benefits tax (‘FBT’) rates and thresholds for the 2017/18 to 2021/22 FBT years.

Two amounts that were not previously announced for the 2021/22 FBT year are:

  • the FBT record keeping exemption is $8,923 (up from $8,853 for the 2020/21 FBT year); and
  • the statutory or benchmark interest rate is 4.52% (down from 4.80% for the 2020/21 FBT year).

The ATO also separately released two taxation determinations setting out further rates and thresholds for the FBT year commencing on 1 April 2021, being:

  • Motor vehicle (other than a car) — cents per kilometre rate; and
  • Reasonable food and drink amounts for employees living away from home.

Editor: Please contact our office if you need more information about these rates or FBT in general.

Warning regarding new illegal retirement planning scheme

The ATO has recently identified a new scheme where SMSF trustees were informed that they could set up a new SMSF to roll-over the fund balance from the old SMSF and then liquidate their old SMSF, in an attempt to avoid paying potential tax liabilities.

The ATO warns that taking part in this arrangement and others like it can result in civil and criminal actions and could ultimately put the members’ retirement savings at risk.

If a trustee of an SMSF believes they have been approached by a promoter of a retirement planning scheme, the ATO recommends they seek a second opinion from a registered tax agent or appropriately qualified financial adviser, and also report the promoter to the ATO.

New succession planning guide for family businesses

The Australian Small Business and Family Enterprise Ombudsman, in conjunction with Family Business Australia, has released a new online guide to succession planning — the “Introductory Guide to Family Business Succession Planning” — which provides a step-by-step guide to passing the family business on to the next generation.

A recent report revealing that 54% of family businesses have no documented succession plan in place and no retirement plan for the current CEO.

The easy-to-read guide offers tips on how to handle tense conversations that can arise between family members throughout the transition phase.

The guide is free and available on both the Family Business Australia and the ASBFEO’s websites.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

 

 

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The Cost of Happiness – What do I need to Earn?

The Cost of Happiness – What do I need to Earn?

The Cost of Happiness – What Do I Need to Earn?

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They say money cannot buy happiness, but can money stop you from being unhappy?

According to Expensivity, there is a certain level of income which can make you happier. Expensivity call this the ‘happiness premium’.

This seems to make sense; a comfortable and reliable income means you worry less and makes life that little bit easier. Given financial stress is such a major issue impacting society today, it is no surprise that a higher income can mean less stress.

Each country has a different happiness premium due to the cost of living, therefore, a different level of income is needed to reach this happiness quota depending on where you live.

In Australia, the level of income needed to reach the happiness premium is $135,321 per annum.

We have a great quality of life in Australia, but this of course comes at a high cost – with the cost of living and expensive property market being key factors in this.

This means Australia comes with the second highest price of happiness behind Bermuda ($143,933 per annum).

Happiness comes cheapest in Suriname, a little South American country with an income of $6,799 being the happiness premium.

Perhaps the most alarming theme that emerged from Expensivity’s research is that the happiness premium in any given country is in fact higher than the average income figure. Basically, this means the average person across the world fails to meet the happiness premium.

Always wanting more and comparing our lives to other people has led to the average income not being good enough.

So, what should we do to reach happiness?

Identify the things which are important to you and use your money to buy these things and limit your spending on things which are not important to you.

Does buying the expensive car bring you more joy than buying a more modest car and using the difference to take your family on a holiday?

Research suggests that in terms of happiness and well-being, spending money on new experiences brings more joy than buying new things.

New things are exciting at first, but then we adapt to them. We constantly need more and more.

Making money decisions that better align to our goals over time can lead to significantly greater life outcomes.

If you need help working through your life goals and better aligning your money to the things which matter to you, please contact us below.

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Change to Casual Employees

Change to Casual Employees

Change to Casual Employees

Information all Employers need to know

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The Federal Govt last week approved a number of changes to casual employees and a number of other elements to their working relationship with employers

Definition of a casual employee:

If a person is:

  1. offered employment without a “firm advanced commitment to continuing and indefinite work”; and
  2. the person accepts that offer, 

then they are deemed to be a casual employee.

What is firm advanced commitment to continuing and indefinite work?

  • whether the employer can elect to offer work and whether the person can elect to accept or reject work;
  • whether the person will work as required according to the needs of the employer;
  • whether the employment is described as casual employment; and
  • whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.

If your relationship with your employee does not address all of the above, then they are most likely not going to be considered as a casual employee, under the law.

New rights apply to Casual Employees

The 2nd aspect of the bill is a casual conversion clause.

Employers must offer to convert a casual employee to permanent employment if the employee:

  1. has been employed for 12 months; and
  2. during the last 6 months, has worked a regular and systematic pattern of hours without significant adjustment. 

There are some specific exclusions to this that should be discussed with your HR representative.

Other points to note;

  • The Casual conversion requirement will not apply to small business employers with less than 15 employees.
  • Where an employee refuses an offer to convert, they no longer hold a right to request conversion at a later date.
  • ALL casual employees will be required to be given a copy of the new Fairwork Casual Employment Information Statement – which will explain the above entitlements to them
  • the Bill also deals with historical problems that have been created where employers misclassify employees as casuals and fail to accrue leave entitlements for these employees. 
    • Where an employee is found to have been incorrectly engaged as a casual (that is, they are at law a permanent employee), the Bill creates an express right for employers to offset any leave entitlements owed to the employee against the casual loading that is often paid to the casual employees. 
    • In order to have the benefit of this offset arrangement, the loading paid must have had components that can be identified as being paid to the employee instead of one or more leave entitlements.
    • To this point, it is highly suggested that payslips, contracts or agreements clearly identify that a casual loading is paid, how much that loading is (that is preferable as a separate amount or line on a payslip)

What should Employers do now?

Now is the time for Employers to review and if necessary clean up any of their casual arrangements.

They should be looking to:

  • Introduce new contracts that align with the amendments
  • Consider and identify staff to be offered casual conversion and put in place a process to achieve this

The Fairwork Casual Information statement will be available for Employers on their website soon.

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JobMaker Hiring Credit Incentive

JobMaker Hiring Credit Incentive

JobMaker Hiring Credit Incentive

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Eligible employers can access the JobMaker Hiring Credit scheme for eligible additional employees they hire between 7 October 2020 and 6 October 2021, for a maximum claim period of 12 months from their employment commencement date.

Through the JobMaker Hiring Credit scheme, eligible employers may receive payments of up to:

$200 per week for each eligible additional employee aged 16–29 years old inclusive.

$100 per week for each eligible additional employee aged 30–35 years old inclusive.

Employers can register with the ATO now and make a claim for the first JobMaker period from 1 February 2021.

Eligible employees must have received one of these payments for at least 28 consecutive days (or 2 fortnights) in the 84 days (or 6 fortnights) prior to starting employment

  • JobSeeker Payment
  • Parenting Payment
  • Youth Allowance (except if they were receiving the allowance because they were undertaking full-time study or are a new apprentice).

What conditions are there?

Please note, to be an eligible employer you will need to satisfy all of the following conditions;

  • has registered for the JobMaker Hiring Credit scheme
  • either
    -Operates a business in Australia.
    -Is a not-for-profit organisation operating in Australia.
    -Is a deductible gift recipient (DGR) endorsed either as a public fund or for a public fund you operated under the Overseas Aid Gift Deductibility Scheme (DGR item 9.1.1) or for developed country relief (DGR item 9.1.2).
  • holds an Australian business number (ABN)
  • is registered for pay as you go (PAYG) withholding
  • has not claimed JobKeeper payments for a fortnight that started during the JobMaker period
  • is up to date with income tax and GST returns for the two years up to the end of the JobMaker period for which they are claiming
  • satisfies the payroll increase and the headcount increase conditions
  • satisfies reporting requirements, including up to date Single Touch Payroll (STP) reporting
  • does not belong to one of the ineligible employer categories.

Please note, the Employee will need to meet the following conditions;

  • are an employee of the entity during the JobMaker period
  • are aged 16–35 years old when they started employment
  • started employment on or after 7 October 2020 and before 7 October 2021
  • worked or have been paid for an average of at least 20 hours per week they were employed in the JobMaker period
  • have completed a JobMaker Hiring Credit employee notice for the employer
  • have not already provided a JobMaker Hiring Credit employee notice to another current employer
  • received one of these payments for at least 28 consecutive days (or 2 fortnights) in the 84 days (or 6 fortnights) prior to starting employment
  • JobSeeker Payment
  • Parenting Payment
  • Youth Allowance (except if they were receiving the allowance because they were undertaking full-time study or are a new apprentice).

For further information please visit https://www.ato.gov.au/General/JobMaker-Hiring-Credit/

If you think you qualify for this incentive, please don’t hesitate to contact our office to discuss further.

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Practice Update March 2021

Practice Update March 2021

Practice Update – March 2021 Edition

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Changes to STP reporting concessions from 1 July 2021

Small employers (19 or fewer employees) are currently exempt from reporting ‘closely held’ payees through Single Touch Payroll (‘STP’).  Also, a quarterly STP reporting option applies to micro employers (four or fewer employees).  These concessions will end on 30 June 2021.

The STP reporting changes that apply for these employers from 1 July 2021 are outlined below.

Closely held payees (small employers)

From 1 July 2021, small employers must report payments made to closely held payees through STP using any of the options below.  Other employees must continue to be reported by each pay day.

A ‘closely held payee’ is an individual who is directly related to the entity from which they receive payments.  For example, this could include family members of a family business, directors or shareholders of a company and beneficiaries of a trust.

Payments to such payees can be reported via STP (from 1 July 2021) using any of the following options:

  1. Report actual payments on or before the date of payment.
  2. Report actual payments quarterly on or before the due date for the employer’s quarterly activity statements.
  3. Report a reasonable estimate quarterly on or before the due date for the employer’s quarterly activity statements. Note that consequences may apply for employers that under-estimate amounts reported for closely held payees.

Small employers with only closely held payees have up until the due date of the payee’s tax return to make a finalisation declaration.  Employers will need to speak with these payees about when their individual income tax return is due.

Micro employers

From 1 July 2021, the quarterly reporting concession will only be considered for eligible micro employers experiencing ‘exceptional circumstances’.

Common examples of when the ATO would generally consider it to be fair and reasonable to grant a deferral due to exceptional or unforeseen circumstances include natural disasters, other disasters or events, serious illness or death.

Additionally, ‘exceptional circumstances’ for access to the STP quarterly reporting concession from 1 July 2021 may include where a micro employer has:

  • seasonal or intermittent workers; or
  • no or unreliable internet connection.

The ATO says it will consider any other unique circumstances on a case-by-case basis.

It should be noted that registered agents must apply for this concession and lodge STP reports, quarterly, on behalf of their eligible micro employer clients.  

The STP reports are due the same day as the employer’s quarterly activity statements. 

If an employer prefers to report monthly, the STP reports must be lodged on or before the 21st day of the following month. 

Finalisation declarations will need to be submitted by 14 July each year.

Editor: Please contact our office if you require more information or assistance with these STP reporting options.

Paper PAYG and GST quarterly instalment notices

The ATO has previously advised that it will no longer issue paper activity statements after electronic lodgment.  Instead, electronic activity statements will be available for access online, three to four days after the activity statement is generated.

As part of its digital improvement program, the ATO stopped issuing paper quarterly PAYG and GST instalment notices (forms R, S & T), where taxpayers had a digital preference on ATO systems.  The September 2020 notice was the last one issued to these taxpayers.

However, the ATO has received feedback from tax professionals that issues have arisen for some of their clients as a result of this change.  For example, some taxpayers who are self-lodgers rely on the receipt of the paper statements as a reminder that their instalments are due.

As an interim solution, the ATO said it will issue paper PAYG and GST quarterly instalment notices starting with the March 2021 quarterly notices.

For taxpayers impacted by this change, the ATO will work with their registered agents to take their circumstances into account.  The ATO has a range of practical support options available, including lodgment deferrals and payment plans that agents can access online, on behalf of their clients.

For self-lodgers, the ATO has issued an email notification reminding them that their December 2020 PAYG and GST instalment notices are due for payment soon (by 2 March 2021).

The ATO said it will continue to work with the tax profession to develop a digital solution for the PAYG and GST instalment notices that is workable for registered agents and their clients.

Editor: Please contact our office if you require more information about paper PAYG or GST quarterly instalment notices.

 

Avoiding disqualification from SG amnesty

The superannuation guarantee (‘SG’) amnesty ended on 7 September 2020.  Employers who disclosed unpaid SG amounts and qualified for the amnesty are reminded that they must either pay in full any outstanding amounts they owe or set up a payment plan and meet each ongoing instalment amount so as to avoid being disqualified and losing the benefits of the amnesty.

The ATO will be sending employers reminders to pay disclosed amounts if they have not previously engaged with the ATO.  Employers will have 21 days to avoid being disqualified from the amnesty.

Registered agents can assist their employer clients who qualified for the SG amnesty avoid disqualification.  In particular, if a client needs to set up a payment plan, agents can do this (online) on their behalf, if the employer:

  • has an existing debit amount under $100,000 (total balance or overdue amounts);
  • does not already have a payment plan for that debit amount; and
  • has not defaulted on a payment plan for the relevant account more than twice in the past two years.

The ATO has advised that employers who are disqualified from the amnesty will:

  • be notified in writing of the quarter they are disqualified for;
  • be charged an administration component of $20 per employee for each disqualified quarter;
  • have their circumstances considered when deciding a Part 7 penalty remission (this is an additional penalty of up to 200% of the unpaid SG amount that may be imposed under the SG laws); and
  • be issued with a notice of amended assessment.

Employers who continue to qualify for the SG amnesty are reminded that they can only claim a tax deduction for amounts paid on or before 7 September 2020 (i.e., the amnesty end date).

Editor: Please contact our office if you require more information or would like us to set up a payment plan for SG amnesty amounts on your behalf.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.

 

 

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