Briefly the new details announced:

JobKeeper Payment

Payments of $1500 a fortnight are available to:

1. Eligible businesses per eligible employee
2. Self-employed individuals.

Details on how the government is suggesting the JobKeeper Payment should work can be found at: https://treasury.gov.au/coronavirus/jobkeeper

I would encourage all self-employed individuals and businesses to read this and if you have any queries that relates specifically to your business please call or email to discuss.

Eligible businesses can now register their interest in applying for the JobKeeper Payment via www.ato.gov.au  or in turn we can do this on your behalf if requested.

Other

Please note that with the business boost payment the government announced in the second stimulus package last week, the first payment of this for those with employees is due on the 28th April 2020, however this payment can only be processed by the ATO once the monthly or quarterly BAS for March 2020 has been lodged, so for those businesses expecting to receive this payment we suggest lodging your BAS by say 21st April 2020 to ensure this payment is made at the earliest possible time.  For those clients requiring a tax agent to lodge their BAS, please contact us as soon as possible to arrange this.

What is terribly baffling is the government has again not directed any stimulus towards those businesses such as Trust’s who don’t pay wages but take trust distributions.  These businesses are receiving far less support and are struggling just as much as everyone.  I would suggest these businesses discuss this issue with their local Federal MP member as they aren’t being heard enough at the moment. 

Please note the government has expanded payments available at Services Australia (Centrelink) so we would encourage anyone facing cashflow issues to contact us to discuss things but to also go to Services Australia to ensure they aren’t missing out on any payments they are now entitled to.

Irrespective of what happens in the weeks and months ahead, we are contactable via phone or email if you have any questions, queries or concerns and are here to support you and small business as much as possible.

Stay safe everyone and if would like to discuss the above we can be contacted on 07 3808 5144.

The post Government’s JobKeeper Payment Explained appeared first on Ignite Accounting.

Briefly the new details announced:

Casuals And Sole Traders
If you receive or are receiving an eligible income support payment (Jobseeker, Youth Allowance, Parenting Payment, etc) or are an Apprentice who has been stood down, you could receive a Coronavirus supplement of $550 a fortnight for the next six months, applying from 27 April 2020.

If you are making less than $1075 a fortnight you should be eligible for the full supplement.

Superannuation
From mid-April 2020 you will be able to apply to have $10,000 withdrawn from super and another $10,000 in the 2021 year, tax free, if you satisfy one or more of the following requirements: are unemployed, are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance, or on or after 1 January 2020 you were made redundant, or had your working hours reduced by 20% or more, or if you were a sole trader, your business was suspended or you have seen a reduction in your turnover by 20% or more.  Applications will need to be made through MyGov however those with SMSF’s will need to apply through the ATO website, details of which are still to come.

The Government is also going to temporarily reduce the minimum drawdown requirements for account-based pensions and similar products by 50%. This will apply for the 2020 and 2021 tax years. As an example, if you are under 65 and currently required to draw down 4% of the pension balance at year start, you will now only need to draw down 2% to satisfy the minimum pension requirements for those years.

A Second $750 One Off Payment
If you’re not eligible for the Coronavirus supplement, in addition to the $750 stimulus payment announced last week, another $750 will be paid automatically from July 13 to those people on the age pension, social security, veteran and other income support recipients and eligible concession card holders.

Pensioners
From the beginning of May, the deeming rates will be reduced by a further 0.25%, meaning more people should have access to an income support payment (such as the age pension) or receive further fortnightly funds as a result of this lowering.

Businesses Who Employ Staff
Not for profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of up to $100,000 instead of the maximum $25,000 announced last week, with the minimum being raised from $2,000 to $20,000. Also increased is the amount of withholding tax credited back, this has increased from 50% to $100% of amounts reported.

Note these payments are effectible broken into two, the first half applying from 28th April 2020 and the second applying from 28 July 2020. The timing of payment is different depending on whether you lodge monthly or quarter withholding.

Our current understanding is that to qualify for this you needed to have been an active eligible employer prior to 12th March 2020 and continue to be one.

This payment is an attempt to give businesses an incentive to retain more of their employees during these tough times.

Government Guaranteed Loans
The government will guarantee up to $20 billion to support $40 billion in small business loans in addition to other funds made available by the Reserve Bank to banking institutions last week. Loans would still be processed through banks and mortgage brokers as per usual, the only difference is that this would hopefully allow more banks to approve loans given 50% is guaranteed by the Federal Government.

The Qld government has announced a 12 month interest free loan of up to $250,000 for small businesses to retain staff.  You can go to www.qrida.qld.gov.au to find out how you can apply for this.  Applications will be opening shortly they have advised.

Conclusion
The government has announced that there may be more measures introduced in the coming week or weeks, of which will likely be urgently needed to assist people and businesses through this crisis.

Stay safe everyone and if would like to discuss any of the above we can be contacted on 07 3808 5144.  We here at Ignite are happy to assist as many people and businesses as we can through these troubled times.

The post Government’s Second Round Stimulus Measures appeared first on Ignite Accounting.

The measures announced are as follows:

Delivering Support For Business Investment

Increasing the instant asset write off threshold from $30,000 to $150,000 for businesses with a turnover less than $500 million until 30 June 2020. 

In addition to this measure business would also be able to claim extra depreciation on new assets purchased between 12 March 2020 and 30 June 2021.  As an example, if a business purchased new plant and machinery for $200,000 on 20 June 2020, if this was added into a small business simplified depreciation pool the normal depreciation would be 15% of $200,000 for the 2020 year, or $30,000.  Under the newly announced support businesses would now be able to deduct 50% of the cost of the asset upfront ($100,000) and the remaining $100,000 would be depreciated at the normal 15%, thus claiming a total of $115,000 in depreciation for the 2020 year, lowering profit and therefore tax payable.

Please note the above does not apply to buildings or other capital works expenditure.  In addition, whilst the instant asset write off applies to both new and second-hand assets, the extra deprecation measure only applies to new assets.

Cash Flow Assistance For Businesses

The government plans to boost cashflow for businesses who employ staff.  The government plans to credit against amounts owing on BAS and IAS 50% of the withholding tax reported.  The minimum payment would be $2,000 with the maximum being $25,000.  The payment would be tax free. 

Our understanding of this is that if a client lodges a BAS or IAS reporting PAYG withholding between March 2020 and June 2020, 50% of the tax will be credited back against what is owed.  An example would be reporting PAYG Withholding tax on a BAS of $10,000 for the March quarter, that business would receive a $5,000 credit against that BAS, thus reducing the total owed. 

Assistance For Businesses With Apprentices And Trainees

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wages for up to 9 months from 1 January 2020 to 30 September 2020.  This is transferable in that if an apprentice or trainee has been let go by a previous employer and your business employs them, the subsidy will come across to the new employer.

$750 One-Off Cash Payment

In addition to the above measures the federal government will be making a one-off $750 cash payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders from 31 March 2020, with most expected to be paid by mid-April.

Qld Government Assistance

Just yesterday Annastacia Palaszczuk announced the Qld Government would be offering $500m in loans to support businesses affected by Coronavirus.  These loans would be interest free for the first 12 months.  In addition, the already announced payroll tax deferral would be extended to all businesses across the state if applied for.

Regarding loan assistance, the max loan on offer would be up to $250,000.  The idea behind this is that hopefully this will enable small business to retain staff.  Unfortunately not all the detail is out yet though.  It has been indicated that more information will be available at www.qrida.qld.gov.au from the end of this week.

Other Matters

Unfortunately the above measures as of right now may not be anywhere near adequate to ensure cashflow is still there when needed in the business.  For those businesses looking at the prospects of significant falls in revenue these other measures could be considered:

·         Having discussions with your lender(s) about postponing repayments of loans and/or financing or seeking further financing capacity.

·         Varying PAYG instalments if profit is going to be less and/or registering for PAYG withholding monthly to receive any benefits sooner.

·         Entering into a payment arrangement with the ATO or deferring obligations.

·         Having discussions with any key creditors to check in on whether they may be able to relax normal account payment policies.

·         Minimizing or deferring capital expenditure to preserve cash

·         Increasing the businesses abilities to sell products online

·         Reducing overheads to the bare necessities

·         Sell or lease out assets the business doesn’t require

·         Having open discussions with staff about what lies ahead and what may happen in the event of a government lockdown.

·              Seek our professional advice early if cashflow maybe of a concern

Conclusion

As always, the devil is in the detail and with the Coronavirus constantly evolving it would be prudent to discuss eligibility and all these measures with us before making any decisions, in case circumstances change or are adjusted.

Stay safe everyone and if would like to discuss the above we can be contacted on 07 3808 5144.

The post Government Stimulus Package To Combat Coronavirus appeared first on Ignite Accounting.

Then you might oscillate between should I/shouldn’t I: casting your mind back to all those times you had a question or request and had to wait for countless days or weeks to get a response from your existing accountant.  Or had to chase up because it’s taken months for them to do your accounts. Or it doesn’t seem like they are ever proactive about helping you. Or you get to speak or communicate to your accountant so seldom, you barely remember their name.

You know that really, it’s something you would like to do.  Some day. When you can wrap your head around what needs to be done. 

But really, there’s no need to be stressed about it or worse still, let your personal or business finances suffer in the meantime.

Because what you can and should expect from your accountant is that they: 

• work as though in partnership with you and your business, 
• should understand all aspects of (and changes to) tax law, devising all legal strategies to minimise your tax,
• manage your financial statements and tax and ensure you understand these by explaining them in non-technical jargon,
• advise you on the financial ramifications of business ideas you have, always helping maximise the financial health of your business,
• help you select the latest accounting software to manage the financial processes of your business, making it convenient and time-saving for you, e.g. using cloud accounting and apps,
• are responsive and available to you whenever you need them.

Far easier than you thought, far faster than you thought.

The good news is it can be easy to arrange the whole switch in less than your lunch hour. And give you enough time to finish eating your sandwich.  Once you know how easily and quickly it can be done, you will wonder why you procrastinated for so long and wish you would have done it sooner.

Switching Accountants: The easy steps to get it done.

1. Do research to find your new accountant.  Think about the frustrations you have encountered with your present accountant, and put together a quick list of what you are looking for in your new accountant.  The above mentioned bullet-point list of things you should expect can be a guide.  Once you find a new accountant you are interested in switching to, contact them for a quick.  Ensure you feel comfortable with them, their service and pricing. If you’re happy to switch over to them, let them know of your intentions. 

2. Advise your current accountant about the change. At this point, as a courtesy, send a letter to your current accountant, advising you wish to end their service and switch to your new accountant.
3. The new accountant contacts your current accountant, requesting your financial documentation via a letter of ‘ethical clearance’ in reply to which your current accountant sends all relevant information.  This transfer of information is done according to CPA Australia’s ethical practice standards.

And contrary to what you may think, you don’t have to wait until the end of the financial year to switch accountants. Nor do you need to wait until the new year to make your longed-for resolution a reality.  Just shave off some time during your next lunch hour, and the task of switching accountants is done.  

Once you experience the difference of working with a proactive, responsive and progressive accounting service like Ignite Accounting, you will be glad you finally made the switch.  And your business will be all the better for it.

Contact us today for a free confidential chat on (07) 3808 5144. 

The post Want to switch accountants but think it’s all too difficult? appeared first on Ignite Accounting.

The following is not an exhaustive list but just some of the things you should be thinking of:

• The now $30,000 instant asset write off for business – we have discussed this topic before, but very briefly, businesses now with a 50M turnover can expense assets costing less than $30,000 net of GST purchased after 2/4/19.  The asset needs to be purchased and received/installed/operational by 30/6/19 to claim it this year.
• Investment or business loans – you could look into prepaying up to 12 months interest in advance before 30/6/19 on any business, rental or investment loans.
• Prepaying rent or expenses – similar to the above, ask your landlord whether he’s ok with you paying up to 12 months rent in advance.
• Super – haven’t hit the maximum 25K concessional contribution limit for the 2019 year? Want to save tax by moving extra funds into super, paying only 15% tax?  You could think about making extra concessional super contributions to lower your personal taxable income, thereby saving personal tax.  Remember to get a possible deduction for super the payment into the fund must be processed by the fund prior to 30 June.
• Defer income – you could look into holding off completing or invoicing some jobs until July.
• CGT – If you’ve made a capital gain this year, are you holding any investments that are currently underwater? You might want to consider selling some loss performing investments to reduce that capital gain.  Note that a CGT event happens on the contract date, NOT the settlement date.
• Donations – make tax deductible donations to registered charities
• Stock – For those businesses with stock, prepare a stock take on the 30 June and you may find there is some lost, damaged or obsolete stock that can be written off.
• Bad Debts – Review Accounts Receivable and write off those debts that just aren’t going to be paid and unfortunately aren’t worth chasing.
• FBT – look into salary sacrificing a motor vehicle or other allowable expenses. If you work for a government organization, hospital or charity, there’s even more of a chance of saving extra dollars due to their potential non-taxable status.  But even if you have your own Company or work for someone there’s a fair chance you may save tax, if not this year but next, by salary sacrificing things such as motor vehicles through work.

Please note that not all of the above may be available, merited or allowable to your individual or business circumstances so please call us on 07 3808 5144 to discuss before acting on any of these suggestions or book in for one of our free initial consultations.

The post Last Minute Things You Can Do To Minimize Your Tax appeared first on Ignite Accounting.

So we’ve put together a few simple tips for you to help you get your business in order and ready to file on time and get the best returns.

1. Claim Those Deductions

Making claims for your business expenses is a given – but there’s a lot that you can claim that you might not have even thought of before. Things like rent, utilities, training courses and advice are all tax deductible expenses.

Keep a spreadsheet of all your expenses INCLUDING how they relate to your bottom line.

If you can, it may be beneficial to pre-pay as much as you can for the year ahead. If you can pay rent in advance you should do so before July 1 so that it can count towards your 2018/19 tax deductions. But remember, in most cases you have to have spent the money already – you can’t claim deductions if you haven’t finished paying something off.

2. Get Your Records In Order

Keeping strong and sensible records is key to getting your tax in on time and saving as much as you can on your tax bill.

It’s never too late to get your records in order and this is something that you should be working on monthly, or even weekly. When it comes to presenting your information to the taxman, having detailed and organised records can really get you ahead. It means you’ll be less stressed and won’t miss out on deductions from a faded receipt.

Your records for EOFY tax returns should include:

• Sales receipts
• Expense receipts
• Bank and credit card statements
• Employee records including wages, super, tax declarations
• Vehicle records
• Asset purchases

You can keep your records electronically or on paper, but they need to be easily retrieved and up to date. As accountants, we want to be able to claim as much as possible and make that return as large as possible for you to; keeping good receipts is a step in the right direction towards achieving this.

3. Keep Up To Date With Tax and Government Changes

As governments and legislation changes, so do Australia’s company tax rates and rules. As a business owner, it’s up to you to keep up to date with any changes that may affect your tax returns. For example, changes have recently been applied for small businesses that are registered for GST and import low-value goods for use in Australia. By providing your offshore supplier with your ABN, you may not need to pay GST.

Single Touch Payroll is now being rolled out to all businesses – so you need to make sure that you’re accounting systems are in place to begin reporting data after 1 July 2019 if they’re not already.

So you can see that tax changes are happening all the time for small and medium businesses – and it’s your job to stay on top of everything! “I didn’t know I was supposed to” is not an excuse that the ATO will accept.

4. Hire a Professional Tax Accountant

The easiest way to ensure you’re filing everything you need whilst claiming everything you’re entitled to is to hire a professional. Take the stress out of the EOFY with a professional business accountant who can keep you compliant with all current ATO regulations.

At Ignite Accounting, our team of business accountants in Brisbane know the current and pending legislation back to front – so if you’re confused by such things as STP, CGT or the recently increased $30,000 Instant Asset Write-Offs, the best step for you to take is to get in touch with us.

Avoid costly and time-consuming errors in your tax returns with a professional tax accountant for your business. With over two decades of experience in Brisbane’s Southside, you can be sure you’re in the best hands.

Unlock opportunities and create real value for your business with Ignite Accounting today. Call us on 07 3808 5144 or Get in Touch online to book your FREE initial consultation.

The post 4 Tax Tips for Australian Small Businesses appeared first on Ignite Accounting.

The date of commencement of these changes will be from 1 January 2020.

Shadow Treasurer Chris Bowen signaled that all investments made prior to 1 January 2020 will be grandfathered from the new rules, as will the halving of the CGT discount to 25% only apply to those investments entered into after 1 January 2020.

If implemented these changes would net the government an extra $2.9 billion out to 2023 and $35.1 billion over the next decade.

There are considerations to be aware of – it does look like you will be allowed to offset negatively geared investments with positively geared investments so those investors that remain in a positive or neutral portfolio won’t be too concerned about the negative gearing aspect of these changes.

Note these changes aren’t law and possibly won’t be legislated, but it’s a good idea to be aware of them nonetheless.

The post Potential Changes To Negative Gearing And CGT appeared first on Ignite Accounting.

RMIT University recently released a report which seemed to show that tax avoidance was a big issue with trusts.  Shadow Treasurer Chris Bowen jumped on this to imply that tax loopholes, of which splitting income with trust beneficiaries was one, were costing the budget “billions of dollars.”

It should be noted that the proposed 30% tax wouldn’t apply to Fixed Trusts but most trusts setup these days aren’t Fixed Trusts.

It’s very evident many small businesses and SMSF’s will end up paying more tax as a result of this proposed reform, from those family businesses that distribute profit to members on an average tax rate below 30%, to SMSF’s who currently pay between 0% or 15% tax depending on whether they are in accumulation or pension mode, suddenly having 30% tax deducted from distributions due to them being invested in a discretionary or non-fixed trust.

Thus caution should be exercised and advice sort in relation to setup and structuring of entities right now, or investments in trusts made by SMSF’s, particularly given an election is just around the corner.

The post Labor Pushing For Trust Tax Reform appeared first on Ignite Accounting.

Single Touch Payroll is a way of sending tax and super information directly to the ATO every time an employee is paid.  Eventually the idea is that businesses will no longer need to provide employees with payment summaries at year end as this information will have already been reported to the ATO during the year.  Furthermore, employees will be able to access their year to date payment information at any time from their myGov accounts.

The issue at hand is ensuring businesses have accounting systems in place to begin reporting data after 1 July 2019 if required to do so.  If you need help with this, or it’s time to review or update your business’s software package, give us a call.

More information can be found here: https://www.ato.gov.au/Business/Single-Touch-Payroll/

The post Single Touch Payroll appeared first on Ignite Accounting.

Small businesses with a turnover of less than $10 million are eligible, so long as the asset is first used or installed ready for use by the 30 June 2019.

It is worth a note that only assets that cost less than $20,000 (excluding GST if you are registered for GST) can take advantage of this immediate deduction. Assets costing $20,000 and over (excluding GST if you are registered for GST) would be assigned to a general small business pool and depreciated over several years.

From 1 July 2019 – unless further extended mind you – only assets under $1,000 (excluding GST if you are registered for GST) would be able to be instantly written-off, so there are tax planning opportunities available for businesses looking at adding to or updating assets within the business in the near term.

The post $20,000 Instant Asset Write-Off appeared first on Ignite Accounting.