From the month of August 2020, you may be able to nominate new employees as eligible for the JobKeeper Payment scheme.
These new employees must have been employed by you on 1 July 2020 and meet other eligibility criteria. This can include employees that:
- you employed after 1 March 2020
- were employed by you on 1 March 2020 and did not meet the eligibility requirements, but do as of 1 July 2020 – e.g. they turned 18 years old after 1 March 2020 but before 1 July 2020.
For the fortnights commencing on 3 and 17 August 2020, employers have until 31 August 2020 to meet the wage condition for newly eligible employees under the 1 July eligibility test.
Many small businesses change their business structure from a sole trader to more complex company or trust structures, especially when the environment changes. This can lead to errors.
Some of the common errors we see include:
- reporting income for the wrong entity
- claiming expenses incurred by another entity as business expenses
- personal use of business bank accounts.
Please remember that:
- the company is a separate legal entity from them as a shareholder or director
- money that the company earns, belongs to the company
- the company owns its assets, and they cannot treat them as their own
- if a director or shareholder of a company uses company assets for their personal use, it must be properly treated as a benefit to the director or shareholder. The Division 7A or fringe benefits tax (FBT) provisions could apply if not treated correctly. You can use our Using your company’s money or assets guide (PDF 629KB)This link will download a file to help explain this to your clients.
If you move to a trust structure, please keep in mind the trustee’s responsibilities, including:
- holding the trust property (including assets, investments and income) for the benefit of the beneficiaries
- managing the trust’s tax affairs
- paying some tax liabilities.
If you need any assistance with business restructuring or any other accounting and taxation work, give our team at SPS Business Consultants a call on 
(03) 9904 9261.
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The Government is extending the JobKeeper Payment by a further six months to March 2021. Support will be targeted to businesses and not-for-profits that continue to be significantly impacted by the Coronavirus. The payment rate will be reduced and a lower payment rate will be introduced for those who work fewer hours. Other eligibility rules remain unchanged.
The JobKeeper Payment, which was originally due to run until 27 September 2020, will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.
The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will apply for employees and business participants that worked fewer than 20 hours per week.
From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).
From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters to be eligible for the JobKeeper Payment from 28 September 2020 to
3 January 2021.
From 4 January 2021, businesses and not-for-profits will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.
To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate that they have experienced a decline in turnover of:
• 50 per cent for those with an aggregated turnover of more than $1 billion;
• 30 per cent for those with an aggregated turnover of $1 billion or less; or
• 15 per cent for Australian Charities and Not for profits Commission-registered charities
(excluding schools and universities).
New JobKeeper Payment rate
From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:
• $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; 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, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and
• $650 per fortnight for other eligible employees and business participants.
Businesses and not-for-profits will be required to nominate which payment rate they are
claiming for each of their eligible employees (or business participants).
If you need any assistance with registering for JobKeeper payment or checking your eligibility, give our team at SPS Business Consultants a call on (03) 9904 9261.
From 12 March 2020 until 30 June 2020, the instant asset write-off:
- threshold is $150,000 (up from $30,000)
- eligibility range covers businesses with an aggregated turnover of less than $500 million (up from $50 million).
Businesses with a turnover of $500 million or more are not eligible to use instant asset write-off.
From 1 July 2020, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.
Under instant asset write-off eligible businesses can:
- immediately write off the cost of each asset that costs less than the threshold
- claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
Instant asset write-off can be used for both new and second-hand assets. Some exclusions and limits apply.
The instant asset write-off eligibility criteria and threshold have changed over time. You need to check your business’s eligibility and apply the correct threshold amount.
In these uncertain times, it’s vital for all small-medium businesses to do smart tax planning to take the maximum benefit out of Government stimulus packages.
From Cashflow Boost of $10,000 to JobKeeper payments of $1,500 per fortnight, there are new legislation that will help struggling businesses massively.
Do you tax planning early this year and get your financials in a good position.
If you need any help with your tax planning, give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261
If you have been financially affected by COVID-19, you may be able to access some of your superannuation early.
Eligible citizens and permanent residents of Australia or New Zealand can apply for up to $10,000 in 2019–20 and up to a further $10,000 in 2020–21.
Eligible temporary residents are able to apply once to access up to $10,000 of super in 2019–20.
Applications can be submitted online through myGov:
- until 30 June 2020 for the 2019–20 year
- between 1 July 2020 and 24 September 2020, for the 2020–21 year.
You will not need to pay tax on amounts released and will not need to include these amounts in your tax return.
If you need any help with your tax obligations, give our team at SPS Business Consultants a call on ☎️ (03) 9904 9261
(03) 9904 9261.
(03) 9904 9261.
