Category: Business Tax

JobKeeper Extension – Almost Here!

Posted on September 14, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, Key Dates for Business

With the JobKeeper extension commencing in two weeks, we provide the latest publically available information –

Extension from 28 September 2020

The original JobKeeper scheme finishes on 27 September 2020.

In good news for employers, the Government then announced that the scheme will be extended from 28 September 2020 until 28 March 2021.

There are two separate extension periods. For each extension period, an additional actual fall in turnover test applies and the rate of the JobKeeper payment is different.

Alternative tests for determining turnover and payment rates may be available in some circumstances but at the time of writing are yet to be published. We will notify you of these as they come to hand.

Extension 1

This extension period runs from 28 September 2020 to 3 January 2021.

You will need to demonstrate that your actual GST turnover has fallen by the following percentages= in the September 2020 quarter (July, August, September) relative to a comparable period (generally the corresponding quarter in 2019)

30% fall in turnover (for an aggregated turnover of $1 billion or less)
50% fall in turnover (for an aggregated turnover of more than $1 billion), or
15% fall in turnover (for ACNC-registered charities other than universities and schools).

The payment rates of the JobKeeper Payment in this extension period are:

Tier 1: $1,200 per fortnight (before tax)
Tier 2: $750 per fortnight (before tax).

Rates of Payment

The rate of the JobKeeper Payment will depend on the number of hours an eligible employee works or on the other hand the number of hours an eligible business participant is actively engaged in the business.

It will be split into two rates as follows:

TIER 1 RATE

TIER 2 RATE

This applies to

eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and
eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect.

This rate is expected to apply to any other eligible employees and eligible business participants.

Employers and businesses will need to nominate the rate they are claiming for each eligible employee and/or eligible business participant.

Extension 2

This extension period will run from 4 January 2021 to 28 March 2021.

You will need to demonstrate that your actual GST turnover has fallen in the December 2020 quarter (October, November, December) relative to a comparable period (generally the corresponding quarter in 2019).

You can be eligible for JobKeeper Extension 2 even if you were not eligible for JobKeeper Extension 1.

The rates of the JobKeeper Payment in this extension period are:

Tier 1: $1,000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax).

What Employers Need to do

From 28 September 2020, employers must do all of the following:

work out if the Tier 1 or Tier 2 rate applies to each of your eligible employees and/or eligible business participants and/or eligible religious practitioners
notify the Commissioner and your eligible employees and/or eligible business participants and/or eligible religious practitioners what payment rate applies to them; and
during JobKeeper Extension 1, ensure your eligible employees are paid at least

$1,200 per fortnight for Tier 1 employees
$750 per fortnight for Tier 2 employees

during JobKeeper Extension 2, ensure your eligible employees are paid at least

$1,000 per fortnight for Tier 1 employees
$650 per fortnight for Tier 2 employees.

For your eligible religious practitioners, you must provide certain benefits to them in the fortnight.

If you are registered for GST and have outstanding BAS statements, you should lodge your BAS for the September 2019 and December 2019 quarters as soon as possible (or for equivalent months, if you report monthly).

Fall In Turnover

To claim for fortnights in the JobKeeper Extension 1, you need to determine if you satisfy the actual fall in turnover test for the September 2020 quarter, you must calculate your GST turnover for the quarter of September 2019 and September 2020.

For many businesses registered for GST, this calculation will match the ‘total sales’ reported at G1 on your BAS minus GST payable (1A), where applicable.

You can provide additional turnover information to demonstrate that you satisfy the actual fall in turnover test for the September quarter from the start of October onwards. You must provide it before you complete your November monthly declaration.

What Doesn’t Change?

To claim for fortnights in the JobKeeper Extension 1 or 2:

You don’t need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September.
You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September.
You don’t need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to:

holding an ABN, and
declaring assessable income and supplies.

JobKeeper 2.0 – Passes Parliament!

Posted on September 2, 2020 by Accounts - Blog, Business Tax, Featured Articles, General

The JobKeeper 2.0 legislation has just passed both houses of Parliament, and is now law (subject to the formality of Royal Assent). This legislation enables the Treasurer to draft a legislative instrument setting out the key changes to the scheme as follows:

Employer Eligibility

From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover in the September quarter 2020 (rather than the June and September quarters). Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in this quarter to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.

Businesses and not-for-profits will need to further reassess their eligibility in January 2021 for the period from 4 January to 28 March 2021. Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in the December quarter 2020 (rather than each of the June, September and December quarters) to remain eligible for the period to 28 March 2021 (the March quarter).

Payment Rates

The payment rates have been pared back and will now depend upon the hours worked by an employee.

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

$1,200 per fortnight for all eligible employees who were working in the business or not for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average; and
$750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

$1,000 per fortnight for all eligible employees who were working in the business or not for-profit for 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and for business participants who were actively engaged in the business for 20 hours or more per week on average; and

• $650 per fortnight for other eligible employees and business participants

Employee Eligibilty

Employees that meet the eligibility requirements can now be nominated by a new employer if their original employment with a JobKeeper employer ended before 1 July 2020
As of 3 August 2020, the key date for assessing employee eligibility is now 1 July 2020 (not 1 March 2020)
For the fortnights commencing on 3 and 17 August 2020, employers had until 31 August 2020 to meet the wage condition for newly-eligible employees under the revamped 1 July eligibility test.

JobKeeper Changes – Employment Start Date and Amendment to Turnover Test

Posted on August 25, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, Key Dates for Business, News, News

On 7 August, the government announced two further changes to the JobKeeper program. Firstly, employees hired as at 1 July 2020 may also be eligible to receive JobKeeper. Secondly, employer turnover eligibility for the revised JobKeeper scheme to commence on 28 September 2020 will be based on a single quarter tax period (rather than multiple quarters as previously announced).

Employee Change

Before this change, an eligible employee had to, among other things, be employed as at 1 March 2020 to qualify for JobKeeper. Additionally, where they were a casual at that date, they had to have been employed on a regular and systematic basis for longer than 12 months as at 1 March 2020.

The 7 August 2020 announcement changes that reference point to 1 July 2020, with effect to all JobKeeper fortnights commencing on or after 3 August 2020 – which means it impacts the last four fortnights of the original JobKeeper scheme.

Noting that the “one-in, all-in” principle still applies to the 1 July changes, employers should consider which employees are now eligible to bring into the JobKeeper scheme, including:

full-time or part-time employees employed after 1 March 2020 but on or before 1 July 2020;
employees who may have joined the business after 1 March 2020 but are currently stood down
casual employees employed at 1 July 2020 who commenced their casual employment before 1 July 2019.
employees who may not have met the age condition as at 1 March 2020, but do as at 1 July 2020
employees who may not have met the residency condition as at 1 March 2020, but do as at 1 July 2020

Employer Turnover Change

Further Consequent Change

This amendment, announced on Friday 14 August, accommodates the employee eligibility change on 7 August (above).

With the key date for assessing which employees are eligible for JobKeeper now 1 July 2020, rather than 1 March 2020, the ATO states that employers should start paying new eligible employees a minimum of $1,500 per fortnight from JobKeeper fortnight 10, which commenced on 3 August. To accommodate what may be a cashflow issue brought about by this change, for the fortnights commencing on 3 August 2020 and 17 August 2020, the ATO is allowing employers until 31 August 2020 to meet this wage condition for all new eligible employees included in the JobKeeper scheme under the new 1 July eligibility test.

Key Dates for September & October 2020

Posted on August 25, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, Key Dates for Business

Many key dates are looming for business including those relating to Activity Statements, GST, Superannuation, Income Tax Returns, and more…

SEPTEMBER 2020
21 September – August monthly Activity Statements – due for lodgement and payment
30 September – Annual TFN Withholding Report for closely-held Trusts where a Trustee has been required to withhold amounts from payments to beneficiaries during 2019/2020 – due date for lodgement

OCTOBER 2020
21 October – September monthly Activity Statements – due for lodgement and payment
28 October – Final date for eligible quarterly GST reporters to elect to report GST annually
28 October – Due date for Superannuation Guarantee contributions for July-September to be made to employee funds
31 October – PAYG Withholding Where ABN Not Quoted – Annual Report – due date for lodgement. These amounts are also reported at W4 on your Activity Statement
31 October – Due date for 2019/2020 individual tax returns (unless you are lodging via a Tax Agent and are on their lodgment list by this date)

Where the due date falls on a weekend or public holiday, it is deferred until the next business day (except in the case of Superannuation Guarantee deadlines).

Instant Asset Write-Off – Extension Announced

Posted on June 9, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News, Small Business

Businesses will be able to access the boosted $150,000 instant asset write-off scheme for a further six months to the end of the year.

By way of background, as part of its emergency COVID-19 fiscal package, the government quintupled (from $30,000) the value of assets businesses were able to instantly write -off for the period of March 12 to June 30, and expanded the eligibility to cover businesses with turnover of less than $500m (up from $50m previously).

Today the government will announce that the more than 3.5 million eligible businesses will now be given until December 31, 2020 to take advantage of this measure. The asset must be installed ready for use by this date.

Although it is anticipated that this extension will be supported by Parliament, it is subject to the passage of legislation.

JobKeeper Payment Rules Released 10/4/20

Posted on April 14, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News

Late on Friday April 10, explanatory materials were released in relation to the JobKeeper payment that has now been passed into law. The explanatory material clarifies one key aspect of the new legislation:

Establishing a downturn

By way of background, to qualify for the JobKeeper wage subsidy, one of the eligibility criteria is that:

for businesses that have an annual aggregated turnover of less than $1 billion, they estimate their GST turnover has fallen or will likely fall by 30% or more or
for businesses that have an annual aggregated turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more), they estimate their GST turnover has fallen or will likely fall by 50% or more.

Treasury has revealed that the comparison period is for either (a) any monthly period from April 2020 to the end of September 2020 or (b) any quarterly period from April to June or July to September…compared to the same monthly or quarterly period in 2019.

Importantly, once this test is met for either (a) a monthly period or (b) any quarterly period, there is no requirement to re-test in later months or quarters. For example, if a business assesses that its turnover will fall by 30% in April 2020 compared to April 2019…then it retains its eligibility until the JobKeeper payments stop for all businesses at the end of September 2020. This is irrespective of its turnover in the months subsequent to April 2020. It is not required to estimate or determine turnover for subsequent periods.

Where an entity does not qualify in the month of April 2020, for example, or the April to June quarter, it can re-test in later months or quarters, but will only be eligible for the JobKeeper payments from the period of qualification onwards (the payment won’t be backdated to the commencement of scheme).

Alternative tests

The explanatory material acknowledges that comparing monthly or quarterly periods from April 2020 and onwards, to April 2019 and onwards, may not always be possible or made lead to unfair outcomes. To this end, where the ATO is satisfied that there is no such comparison period in 2019, or there is not an appropriate relevant comparison period, the ATO Commissioner may, by legislative instrument, determine an alternative decline in turnover test.

The two alternative test examples cited in the explanatory materials relate to:

businesses that were not in existence for the whole of the comparison period in 2019. In the explanatory materials, the business is permitted to average its actual turnover from October 2019 when it came into existence to March 2020, and compare that average it to its estimated turnover in April 2020.
businesses that were impacted by a natural disaster during the 2019 comparison period. In the explanatory materials, the business is permitted to go back to 2017 (the most recent year when its turnover was not impacted by drought) and compare its turnover to the same eligible period in 2020.

The Commissioner retains flexibility to apply other alternative tests and take into account other unique circumstances (aside from natural disaster and start-up businesses) confronted by a business, should the 2019 comparison period not be reflective of typical turnover. Treasury, in a separate fact sheet Supporting Business to Retain Jobs, has stated that these alternative tests may include, for example, eligibility being established as soon as a business ceases or where a business significantly curtails its operations.

Businesses and their advisors should contact the ATO where they believe they warrant special consideration in this regard.

JobKeeper Payment – Fresh Guidance on Establishing a Downturn

Posted on April 9, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News, Small Business

We’ve received many questions from subscribers around how a “downturn of turnover” will be measured for the purposes of eligibility for the coronavirus-related Job Keeper Payment.

Last night there was fresh guidance from Treasury.

By way of background, one of the eligibility criteria for Job Keeper is that:

• for businesses that have an annual turnover of less than $1 billion, they estimate their turnover has fallen or will likely fall by 30% or more; or
• for businesses that have an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) they estimate their turnover has fallen or will likely fall by 50% or more; and
• the business is not subject to the Major Bank Levy.

Treasury has indicated that the decline in turnover test is linked to the GST turnover test in particular the projected GST turnover – which will take into account anticipated decline in revenue. The test requires a business to measure its projected GST turnover and compare this to what is termed a relevant comparison period. If this equals or exceeds the following thresholds, the entity satisfied the decline in turnover test:
• ACNC-registered charities – 15%;
• entities with turnover less than $1bn – 30%;
• entities with turnover greater than $1bn – 50%.
There is scope for the ATO to apply an alternative test to different classes of entities.
The turnover test period must be a calendar month that ends after 30 March 2020 and before 1 October 2020, or a quarter that starts on 1 April or 1 July 2020. The relevant comparison period must be the period in 2019 that corresponds to this turnover test period.
Further ATO guidance will be forthcoming
The turnover numbers must be reported to the ATO before any payments will start, though there is a transitional rule for the first 2 JobKeeper fortnights.
The key take-away points are while, at this stage, this is Treasury guidance:

• the test/comparison period vis-à-vis 2019 to 2020– spans from April to the end of September
• if 2019 is not representative of typical turnover, another comparison period may be considered
• the ATO is willing to exercise its discretion where there are anomalous cases.

Job Keeper Payment and Establishing a Downturn

Posted on April 3, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News, Small Business

Employers will be eligible for the Job Keeper subsidy if:

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

Since this measure was announced, we’ve been inundated with questions around how a business can establish that it has suffered a 30 per cent downturn.

Ultimately, this won’t be clear until at least next Wednesday when the legislation is introduced into Parliament.

The latest guidance from Treasury is as follows:

To establish that a business has faced either a 30 (or 50) per cent fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier. Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of the Coronavirus. The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business has ceased or significantly curtailed its operations). There will be some tolerance where employers, in good faith, estimate a greater than 30 (or 50) per cent fall in turnover but actually experience a slightly smaller fall.

With the legislation to be unveiled next week, we will keep you updated on this very important matter.

More Coronavirus Relief for Business

Posted on March 30, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News, News, Small Business

Over the weekend (29/03/2020), more relief was announced for business including:

Deferral of Loan Repayments

A little over a week ago, the Australian Banking Association announced a six-month deferral of all loan repayments for small businesses hit by the coronavirus pandemic.

On the weekend, this relief has now been extended to all businesses that have loans of up to $10 million. That accounts for just on 98% of all Australian businesses that have loans with Australian banks

Commercial Tenancies

National Cabinet agreed to a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus.

Commercial tenants, landlords and financial institutions are encouraged to sit down together to find a way through to ensure that businesses can survive and be there on the other side. As part of this, National Cabinet agreed to a common set of principles, endorsed by Treasurers, to underpin and govern intervention to aid commercial tenancies as follows:

a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
the reduction or waiver of rental payment for a defined period for impacted tenants;
the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus;
landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements; and
cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.

COVID-19 Business Support Summary

Posted on March 26, 2020 by Accounts - Blog, Business Tax, Featured Articles, General, News

Support from the Federal Government

For Sole Traders:

▪️Increased & accelerated income support: you’re able to access the $550 per fortnight Coronavirus supplement payment through JobSeeker, Youth Allowance Jobseeker or Parenting Payment with the waiting period and asset testing waived

▪️The increased instant asset write-off: The Government has lifted the threshold for instant asset write-off from $30,000 to $150,000

▪️Backing Business Investment: A time limited 15 month investment incentive (through to ‪30 June 2021‬). Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation

▪️Early access to superannuation: You can access $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21. You can apply for early release of your super from mid-April 2020

▪️Find out more here: https://business.gov.au/…/support-available-for-sole-traders

For Employers and Companies:

▪️Temporary cash flow support: employers will receive a payment equal to 100% of their salary and wages withheld, with a maximum payment of $50,000 and minimum payment of $10,000. Not for profits are also eligible. An additional payment is being introduced which means eligible businesses will receive at least $20,000 up to a total of $100,000 under the two payments

▪️Help to pay the wages of apprentices or trainees: eligible employers can get a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months ‪from 1 January to 30 September 2020‬

▪️There is also relief for companies and directors by lifting the threshold of payments to creditors, and for personal liability for directors for trading while insolvent

▪️Find out more here: https://business.gov.au/…/coronavirus-information…/employers

You can get the full details of all the support available here: https://business.gov.au/…/coronavirus-information-and-suppo…