Tag: Australian Banks

2020 May/June – Page 2

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Director penalty notices can now be applied to additional taxes. 

Find out if you as a director can be held personally liable.     

The Government has provided two significant incentives for  

businesses to invest in depreciating assets over the coming months.

Check out the assistance the ATO is offering 

for those impacted by the coronavirus. We also 

inform employers of their workplace rights.   

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04

03

KEY DATES

Many deadlines are imminent over the 

next couple of months.   

07

11

Find out how your business can enjoy 

much-needed relief by way of a credit on tax 

withheld from wages.  

Index

STIMULUS PACKAGE  

–CASHFLOW BOOST 

DIRECTOR PENALTY 

NOTICES EXTENDED

STIMULUS PACKAGE  

– INVESTMENT 

ATO AND FAIR WORK - 

YOUR CORONOVIRUS 

GUIDE

Published by My Tax Savers, P.O.Box 2255 Southport BC 4215  Email: info@mytaxsavers.com.au  Phone: 1800 SAVETAX  

Web:  www.mytaxsavers.com.au. My Tax Savers is a trading name of My Tax Savers Pty Ltd ABN 85 059 305 976.

Print Post Approved 100019425

MY TAX SAVERS

May/June  2020

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COVID-19 Banking Relief Package

In response to the expected impact of the coronavirus (COVID – 19), the Government last week announced a range of measures that it and the banks are putting in place to support businesses over the coming months. For further details, and how to apply, you should contact your lender:  

Loan Repayment Relief 

  • Banks will defer loan repayments for six months for small businesses who need assistance because of the impacts of the coronavirus. 

SME Loan Guarantee Scheme 

  • The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs.  

Low Cost Loans from Smaller Lenders 

  • $15 billion in stimulus investment to enable small banks and non-banks to supply low-cost loans to customers and small business. This will enable customers of smaller lenders to continue to access affordable credit. 

 

2020 May/June – Page 14

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Where an employer directs a full-time or part-time employee not to work 

due to workplace health and safety risks but the employee is ready, willing 

and able to work, the employee is generally entitled to be paid while the 

direction applies. Employers should consider whether their obligations 

are impacted by any applicable enterprise agreement, award, employees’ 

employment contracts or workplace policies.
Under the Fair Work Act, an employee can only be stood down without 

pay if they cannot be usefully employed because of equipment break 

down, industrial action or a stoppage of work for which the employer 

cannot be held responsible. The most common scenarios are severe and 

inclement weather or natural disasters.
Standing down employees without pay is not generally available due 

to a deterioration of business conditions or because an employee has 

the coronavirus. Enterprise agreements and employment contracts can 

have different or extra rules about when an employer can stand down an 

employee without pay. Employers are not required to make payments to 

employees for the period of a stand down, but may choose to pay their 

employees.
Employers need to balance their legal obligations, including those relating 

to anti-discrimination.

IF AN EMPLOYEE WANTS TO STAY AT HOME AS A 

PRECAUTION

Employees who want to stay at home as a precaution need to come to 

an arrangement with their employer that best suits their workplace, such 

as making a request to work from home (if this is a practical option) or 

to take some form of paid or unpaid leave, such as annual leave or long 

service leave. Normal leave application processes in the workplace apply. 

If the employee does not enter into an arrangement with their employer 

or use paid leave, they are not entitled to payment in these circumstances. 

You can find information on quarantine requirements on the Australian 

Government Department of Health’s website.
Employees are encouraged to discuss their level of risk of contracting 

coronavirus with their doctor, workplace health and safety representative 

or the appropriate Commonwealth, State or Territory workplace health 

and safety body. 
Employees who do not work because they have a reasonable concern 

about an imminent risk to their health or safety are not taking industrial 

action. This is provided they are not failing to comply with a direction 

to perform other appropriate and safe work.

WHAT ABOUT CASUAL EMPLOYEES AND INDEPENDENT 

CONTRACTORS?

Casual employees do not have paid sick or carer’s leave entitlements 

under the National Employment Standards and usually are not entitled to 

be paid when they do not work (for example, if they miss a shift because 

they are sick due to coronavirus or because they are otherwise required 

to self-isolate). Casual employees are paid a casual loading instead of paid 

leave entitlements. Employers should also consider their obligations under 

any applicable enterprise agreement, award, employees’ employment 

contracts or workplace policies.
Independent contractors are not employees and do not have paid leave 

entitlements under the Fair Work Act. However, there are special provisions 

that deem contract outworkers in the textile, clothing and footwear 

industry to be employees for the purposes of most protections under the 

Fair Work Act. Where these provisions apply, the contract outworker 

should be treated as an employee.

WHAT IF I NEED TO LET EMPLOYEES GO OR REDUCE THEIR 

WORKING HOURS?

Some employers may need to make employees’ positions redundant in 

response to a business downturn. If an employee’s job is made redundant 

their employer may have to give them redundancy pay. The Fair Work Act 

has requirements that employers have to meet before they can terminate 

an employee’s employment, such as providing notice.
If an employer seeks to vary employees’ work rosters, they should review 

any applicable enterprise agreement, award, employment contracts or 

workplace policies. Particularly for full-time and part-time employees, 

an employer is usually required to seek employees’ agreement to change 

their rosters.
Under the Fair Work Act, an employee is protected from being dismissed 

because of a temporary absence due to illness or injury. The Fair Work 

Act also includes protections against being dismissed because of 

discrimination, a reason that is harsh, unjust or unreasonable or another 

protected right. These protections continue to operate in relation to 

employees impacted by coronavirus.

WHAT IF AN EMPLOYEE IS STUCK OVERSEAS OR IS 

REQUIRED TO BE QUARANTINED OR SELF-ISOLATE?

Employees should contact their employer immediately if they are unable 

to attend work because they cannot return from overseas, are required to 

enter quarantine or to self-isolate because of the coronavirus.
You can find up-to-date information on quarantine requirements on the 

Department of Health’s website  
The Fair Work Act does not have specific rules for these kinds of situations 

so employees and employers need to come to their own arrangement. 

This may include:
•  working from home or another location (if this is a practical option), 

noting they should review any applicable enterprise agreement, 

award, employment contracts or workplace policies

•  taking sick leave if the employee is sick
•  taking annual leave
•  taking any other leave available to them (such as long service leave 

or any other leave available under an award, enterprise agreement 

or employment contract)

•  arranging any other paid or unpaid leave by agreement between the 

employee and the employer.

Where an employer directs a full-time or part-time employee to stay 

home in line with advice, for example in line with the Australian 

Government’s health and quarantine advice, and the employee is not 

sick with coronavirus, the employee should ordinarily be paid while the 

direction applies. Employers should consider whether their obligations 

are impacted by any applicable enterprise agreement, award, employees’ 

employment contracts or workplace policies.
If an employee cannot work due to travel restrictions (for example, they 

are stuck overseas), they are not entitled to be paid (unless they use paid 

leave entitlements). Again, employers should consider whether their 

obligations are impacted under any applicable enterprise agreement, 

award, employees’ employment contracts or workplace policies.

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May/June  2020

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2020 May/June – Page 15

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SUPER CATCH-UP 

CONTRIBUTIONS

Over the coming months many individuals will be eligible to make extra personal super 

contributions compared to previous financial years. In doing so, you may be eligible to claim 

a larger tax deduction than in previous years, as well as providing for your retirement. 

CATCH-UP CONTRIBUTIONS 

From 1 July 2018, if you have a total super balance of less than $500,000 on 

the previous 30 June and you make or receive  concessional contributions 

of less than the concessional contributions cap of $25,000 per year, 

you may be able to accrue unused cap amounts for use in subsequent 

financial years.

2018/2019 was the first financial year you can carry forward unused cap 

amounts and these amounts can be used from 1 July 2019. Unused cap 

amounts can be carried forward for up to five years. 

Before this change to the law, the concessional operated on a year-by-year 

basis – any unused amounts from a previous year could not be carried 

forward and used in subsequent years. You either used it, or you would 

lose it! Practically speaking, the first year that you can take advantage 

of this reform is 2019/2020 (for any unused 2018/2019 cap).

EXAMPLE – Carry-Forward Concessional Cap

Catelyn is a lawyer who earns $95, 000. As a result her employer 

would normally contribute $9, 025 in Superannuation Guarantee 

on her behalf. From 1 July 2018, she was on unpaid maternity 

leave, and returned to work exactly 12 months later. 

Under  the  old  rules,  unable  to  carry-forward  her  unused 

concessional caps from previous years, in 2019/2020, Catelyn’s 

concessional cap would be $25 000 and not take into account her 

unused 2018/2019 cap. However, under the new rules, Catelyn’s 

cap in 2019/2020 would be $40 975 ($25 000 unused carry-

forward amount from 2018/2019 + $15 975 standard $25,000 

cap in 2019/2020). 

Assuming she made no contribution while on maternity leave in 

2019/2020, under the new rules Catelyn would be able to make a 

personal contribution of up to $40 975 in 2019/2020 (the unused 

$25 000 cap + $15 975 of the unused 2019/2020 cap, taking into 

account the $9 025 in Superannuation Guarantee paid by her 

employer). This would give her extra capacity to catch-up on 

her superannuation contributions that were not made during her 

time off work – either by salary sacrificing, or making an after-

tax contribution for which she could claim a tax deduction. The 

maximum amount of the tax deduction allowed in 2019/2020 

would also increase by $25 000 (being the unused cap amount 

from the previous year. 

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EXAMPLE 

Assume Cameron’s employer did not offer salary sacrifice 

(employers are not required to). By making a $10,000 after-tax 

contribution, this entire amount can be claimed as a tax deduction. 

Cameron however should consider his concessional contributions 

cap (which includes employer contributions and salary sacrifice 

contributions) of $25,00 per year.  

The ability to carry forward the unused portion of superannuation 

concessional contribution cap may come in particularly handy for: 

•  Those who are returning to the workforce, such as parents who have 

taken time out to look after new-born children

•  Those whose income has increased from prior years, such as 

individuals who now work full-time or who have been promoted

•  Those who have received a one-off windfall gain. 

DEDUCTIONS

Even if you do not use the extra capacity offered by the catch-up provisions, 

subject to eligibility you can claim a tax deduction for your personal 

contributions you make to superannuation leading up to 30 June 2020. 

If you are unable to salary sacrifice – perhaps your employer does not 

allow it, or you are not an employee – you can still access the same 

taxation benefits, and simultaneously provide for your retirement. This 

includes people who derive their income from:

•  Salary and wages
•  Self-employment 
•  Investments (such as interest, dividends, rent, capital gains)
•  Government pensions and allowances
•  Superannuation 
•  Partnership or trust distributions
•  Foreign source. 
Since 1 July 2017, most individuals up to age 75 can claim an income 

tax deduction for personal superannuation contributions. Before this 

date, you could only claim a deduction for your personal contributions 

where less than 10% of your assessable income, your reportable fringe 

benefits and your reportable employer superannuation contributions 

(e.g. salary sacrifice contributions) for the year were from being an 

employee – this was known as the ‘10% Rule’. This rule prevented most 

employees from claiming a tax deduction for this type of contribution. 

This rule no longer exists. 

To claim a deduction, the following conditions must be satisfied:

•  Age – All individuals under the age of 65 are eligible. Those aged 65 

and over may need to meet a ‘work test’ (work for at least 40 hours 

in a period of not more than 30 consecutive days in the financial 

year in which you plan to make the contribution). 

•  Minors –  If the individual is under 18 at the end of the income year 

in which the contribution is made, they must derive income in that 

year from being an employee or carrying on a business.

•  Complying Fund – The contribution must be made to a complying 

superannuation fund. 

•  Notice Requirements – To claim the deduction you must provide 

your superannuation fund with a Notice of intention to claim a 

deduction form before you lodge your tax return in respect of that 

financial year.  

Having met these conditions, you can claim the full amount of the 

contribution (up to the concessional contribution caps – see later) in your 

personal tax return at Label D12.

TAX TIP – EARNING LESS THAN 

THE TAX-FREE THRESHOLD?

From a tax perspective, no tax benefit will be enjoyed if you 
earned less than $18,200 as those earning less than this 
amount do not pay tax anyway (after factoring in the low-
income tax offset). 

TAX TIP – LOSSES NOT ALLOWED

You generally make a tax loss when the total deductions 
you can claim for an income year exceed the total of 
your assessable income and net exempt income for the 
year. Individuals can generally carry forward a tax loss 
indefinitely, and use it to offset income in a future year. 
Carried-forward tax losses are offset first against any net 
exempt income and only then against assessable income. 

However, personal superannuation contributions cannot 
be claimed as deductions where they would give rise to a 
tax loss. Therefore, if your deductions already exceed your 
assessable income, the superannuation deduction cannot be 
claimed and therefore cannot increase or create a tax loss 
which would normally be carried forward to future years! 

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May/June  2020

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2020 May/June – Page 1

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MAY/JUNE

2020

IS

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  2651-8627

MTS

M Y   T A X   S A V E R S

THE LATEST NEWS!

PLUS

CORONAVIRUS - 

ALL YOU NEED TO KNOW

30 JUNE TAX PLANNING

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CORONAVIRUS

BANKING ASSISTANCE

Over the coming weeks, as the impact of COVID – 19 worsens, 

businesses may need assistance from their lending institutions. 

This article details what is available. 

GOVERNMENT ASSISTANCE

Banks are working with their customers to provide support through 

the COVID-19 pandemic. This is on the back of a range of measures 

announced by the government as part of their Coronavirus Stimulus 

Package, including:

LOAN REPAYMENT RELIEF

Originally, the Australian Banking Association announced a six-month 

deferral of all loan repayments for small businesses hit by the coronavirus 

pandemic. 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. This is for all loans 

connected with the business, including equipment and vehicles.

On an individual level, homeowners may be granted a six-month holiday 

from repayments – with no repayments required to be made during this 

period. However, during this period, interest and fees will add to the 

loan balance. Note the criteria here is generally fairly strict. Your loan 

term will be extended so that your repayment amounts (e.g. monthly) 

do not increase after the six-month holiday. Note the criteria for relief 

is quite strict in that you will need to demonstrate that you have been 

materially impacted by the coronavirus such as by way of loss of income 

or employment. Wanting to build a bank of savings because you are 

worried about your employment being terminated in the future, will 

generally not be sufficient. 

SME LOAN GUARANTEE SCHEME

The Government will establish the Coronavirus SME Guarantee Scheme 

which will support small and medium enterprises (SMEs) to get access 

to working capital to help them get them through the impact of the 

Coronavirus. Under the Scheme, the Government will guarantee 50 per 

cent of new loans issued by eligible lenders to SMEs. The Government’s 

support will enhance lenders’ willingness and ability to provide credit to 

SMEs with the Scheme able to support $40 billion of lending to SMEs.

LOW-COST LOANS FROM SMALLER LENDERS

$15 billion in stimulus investment will be made available to enable small 

banks and non-banks to supply low-cost loans to customers and small 

business. This will enable customers of smaller lenders to continue to 

access affordable credit. 

STRATEGIES FOR DEALING WITH YOUR BANK

Personal and business customers should consider making the following 

requests of their bank:

•  deferring principal reductions; and 
•  pausing asset finance repayments immediately; and
•  moving home loans to interest only, or pausing principal and interest 

repayments; and

•  amending or deferring conversations surrounding covenants / 

conditions, or having covenants waived altogether.

Importantly, the time to act on this is now to preserve flexibility moving 

forward, remembering that whilst planning for the worst and hoping 

for the best, the ability to be able to grow profitably on the other side is 

something that can be planned for now.

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INSOLVENCY

On the related issue of insolvency, new rules have been put in place by 

the Government to cushion financially-distressed businesses. 

These new rules aim to provide a safety net by reducing the threat of actions 

against businesses and attempting to provide confidence to directors to 

continue to trade during this difficult time.

To create that safety net, the government is temporarily changing the 

following insolvency rules:

INSOLVENT TRADING
For six months from March 2020, directors will be relieved from their 

duty to prevent a company from trading whilst insolvent with respect 

to debts incurred in the ordinary course of carrying on its business. 

Consequently, directors will not become personally liable for such debts 

as would normally be the case under the normal insolvent trading regime.  

TEMPORARY INCREASE IN TIME TO COMPLY
For both personal and corporate insolvency matters, there will be a 

temporary increase to the amount required to issue a Statutory Demand 

against a company and a Bankruptcy Notice against an individual. The 

government is also increasing the time within which a company and an 

individual has to comply with a Statutory Demand and a Bankruptcy 

Notice respectively. Set out below are the new temporary changes:

1.  Statutory Demand
The threshold is increasing from $2,000 to $20,000. The time period 

within which to comply is going from 21 days to six months.

2.  Bankruptcy Notice
Similarly, the threshold amount for a Bankruptcy Notice to be issued is 

also increasing, this time from the current amount of $5,000 to $20,000. 

The government is also increasing the time within which to comply with 

a Bankruptcy Notice from the existing 21 days to six months.

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Employers can now come forward and get their 

superannuation affairs in order, and enjoy favourable tax 

and ATO treatment.

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Cash payments is just one way the  Government is assisting 
individuals in the fallout from the coronavirus. 

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Over the coming months many individuals 

will be eligible to make extra personal super 

contributions compared to previous financial 

years while also providing for their retirement. 

Loan repayment holidays and access to 

access to loan guarantees is just some of the 

assistance. 

There is a range of strategies to employ and 

matters to address leading up to 30 June.  

SUPER CATCH-UP 

CONTRIBUTIONS

CORONAVIRUS

BANKING ASSISTANCE

30 JUNE TAX 

PLANNING

STIMULUS PACKAGE 

  

INDIVIDUALS 

SUPER 

AMNESTY 

GENERAL ADVICE WARNING: The information contained in this publication is general information only. Any advice, if any, is general advice only. Your objectives, financial situation or needs have not been taken into 

consideration. You should consider if this information is suitable for your needs and seek the advice of relevant taxation, superannuation and/or other relevant advisers before any financial product information is acted on.
COPYRIGHT: This newsletter has been written and designed for My Tax Savers Pty Ltd. No part of this publication that is covered by copyright may be reproduced without the express permission of My Tax Savers Pty Ltd.

JOB KEEPER  

PAYMENT

27

Subject to various conditions, the Government will 

subsidise the wages of your employees for six months. 

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30 JUNE TAX PLANNING

Leading up to the end of the financial 

year, there are a number of tax strategies 

available and matters to address. 

INCOME DEFERRAL AND EXPENSE ACCELERATION 

If you will be earning more money this financial year (2019/2020) than next 

year (2020/2021) then consider deferring income until after 30 June 2020 

where possible. This may involve for example deferring taxable capital 

gains by simply delaying the sale of the asset. Or it may involve delaying 

your retirement slightly and thus receiving any payout in 2020/2021 when 

you will likely be earning less income than when you were working. 

On the other hand, if you are looking to minimise your taxable income 

in 2019/202020 (perhaps you will be earning more money this financial 

year than next year, or you just need some cash-flow relief) consider 

bringing forward some planned deductible expenditure to before 1 

July. Or if you have made a capital gain, and are holding a loss making 

CGT asset, you may wish to consider crystallising that loss – however, 

pursuing this strategy, we recommend you speak to your investment and 

tax advisor before any sale.

TAX TIP

Sammy is a sole trader operating a painting business. He 
accounts on a cash basis. He is on track to earn an estimated 
$210, 000 in 2019/2020, but anticipates it will fall to less than 
$100,000 next year due to the impact of COVID-19 Coming up 
to 30 June, he is nearing completion of a $10 000 repair job. 
If Sammy went ahead and completed the job, his tax liability 
on this $10,000 would be $4,700 (including Medicare Levy). 
On the other hand, if Sammy were to delay the completion 
of this task by a few days until 1 July, his tax liability on the 
$10,000 would be $3,900…a total tax saving of $800.  

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