News on 26 April 2024

AAT upholds ATO decision on self-education expenses

The tribunal has dismissed an appeal relating to self-education expenses claimed as deductions by a dental technician.

The Administrative Appeals Tribunal has found that expenses incurred as part of completing examinations and practical assessments by a dental technician were not deductible in a recent decision, Ionita and Commissioner of Taxation (Taxation) [2024] AATA 808.

The applicant in the case was qualified as a dentist in Romania and moved to Australia in 2012 to commence working as a dental technician in 2013.

She wanted to become registered to practise as a dentist in Australia. This required her to meet the requirements of the Dental Board of Australia, including undertaking an initial assessment and then completing written and practical examinations facilitated by the Australian Dental Council of Australia.

She sought to claim tax deductions for costs associated with her examinations to become registered as a dentist in Australia as well as associated meals, accommodation, and flight expenses.

The deductions were claimed for the income years ending 30 June 2015, 30 June 2017, 30 June 2018, and 30 June 2019. 

In notices of assessment issued by the ATO, the Commissioner of Taxation found that the expenses were not deductable as there was not a sufficient connection between her income-earning activities and the self-education expenses.

The tribunal had to consider whether the was a sufficient nexus between the expenses incurred and the applicant’s income-earning activity as a dental technician.

AAT senior member Dr Michelle Evans-Bonner said based on the legislative framework, this connection would exist if:

• The self-education undertaken by the applicant was necessary to maintain her income-earning activities as a dental technician.
• The self-education improved her skills or knowledge necessary to perform her role as a dental technician.
• The self-education led to an increase in income in her role as a dental technician.

The Commissioner of Taxation submitted that the applicant’s employer did not require her to undertake the assessment or examinations as part of her dental technician role nor was there any regulatory requirement that she do so for her role as a dental technician.

The ATO also noted that there was no such requirement in her employment contract or job description and she obtained her employment prior to undertaking the initial assessment and remained employed in the absence of completing all the assessments and examinations.

It also stated that the assessment and examinations relate exclusively to becoming eligible for registration as a dentist in Australia and therefore the expenses were incurred at a point too soon to be regarded as incurred in gaining or producing the applicant’s assessable income.

While the applicant received pay rises, the ATO said the applicant had not provided sufficient evidence to show the increase in salary was a result of sitting the assessment or the examinations.

The tribunal noted that the letter from her employer did not specifically state that her pay increases were due to her completion of the assessment and the examinations.

“The overall timing and pattern of wage increases [seem] to have no discernible correlation to the Applicant’s completion of her assessment and examinations,” said Evans-Bonner.

The tribunal also found that the evidence did not support a finding that the assessment or the examinations were required to maintain the applicant’s skills as a dental technician.

“She was already a qualified dentist overseas. Her employment contract did not require her to undertake any study to maintain her skills, nor did any professional body,” said Evans-Bonner.

She also agreed with the commissioner’s submission that it was not clear how the assessment, written examinations, or practical examinations had the effect of maintaining or improving the applicant’s skills as a dental technician.

“The evidence is in the form of general assertions, and it is not clear how sitting examinations to certify suitability for registration as a dentist in Australia improved the Applicant’s skills as a dental technician,” she said.

She also noted that while the industry is the same for both roles, the roles appear to be different. 

“For example, the role of a dentist is patient-centred focus in treating, educating and advising patients about their oral hygiene and health and includes performing procedures under anaesthetic, prescribing medications and referring patients to specialists,” she said.

“In contrast, the role of a dental technician does not involve any patient contact, but rather involves working in a laboratory and includes receiving orders from a dental prosthetist or dentist to, for example, make plaster and stone models, impression trays, construct ceramic restorations, refine and repair dentures and the like.”

The tribunal found that the expenses were not deductable under section 8-1(1)(a) of the ITAA 1997 as there was an insufficient connection between the expenses completed in the examinations and assessments by the applicant and her income-earning activity as a dental technician.

News on 7 March 2024

Claiming working from home expenses

Two ways to calculate a work from home deduction for Tax Time 2024.

Before you know it, it will be tax time again. If your clients have been working from home this financial year, they’ll probably have some work-related expenses they can claim.

There are 2 ways to calculate a work from home deduction:

• fixed rate method
• actual cost method

Using the fixed rate method, they can claim a rate of 67 cents per hour worked at home.

This amount covers additional running expenses, including electricity and gas, phone and internet usage, stationery, and computer consumables. A deduction for these costs cannot be claimed elsewhere in their tax return.

They can, however, separately claim any depreciating assets, like office furniture or technology. To help with this, try our depreciation and capital allowances tool.

The most important thing is that they have the right records.

For the fixed rate method, this includes a record of:

• the total number of hours worked from home (for the entire year)
• the additional running expenses covered by the rate per hour that they incurred (for example, phone bill, electricity bill)
• any depreciating assets (and how much of their use of that asset was work-related).

For the actual cost method, they’ll need a record of:

• their hours worked from home (whether that be the total hours, or a continuous four-week period representing the usual pattern of work, if their hours are consistent throughout the year)
• their additional running expenses (for example, phone bills, electricity bills)
• how the deduction was calculated.

For more information, visit www.ato.gov.au/home

News on 29 February 2024

Superannuation contribution caps to increase from 1 Jul 2024

Superannuation contribution caps to increase from 1 July 2024

The Federal Government has announced some key changes to the superannuation system that will take effect from 1 July 2024.

Key changes include an increase in the concessional and non-concessional contribution caps, the bring forward caps, and the total superannuation balance thresholds that apply to determine the maximum amount of bring forward non-concessional contributions available to members.

Concessional and non-concessional contribution caps

The announcement includes an increase in the standard concessional and non-concessional contribution caps, which determine how much money can be put into super each year with lower tax rates.

The concessional contribution cap, which applies to employer and salary-sacrificed contributions, as well as personal contributions claimed as a tax deduction, will increase from $27,500 to $30,000. This can mean that superannuation fund members can reduce their taxable income by contributing more to their super.

The non-concessional contribution cap (NCC), which applies to after-tax contributions, will increase from $110,000 to $120,000. This can mean that superannuation fund members can add more to their superannuation balance from their own savings or inheritances, without paying extra tax.

This is the first time the contribution caps have been increased in three years.

Non-concessional contribution cap and the bring forward rule

The increase to the NCC cap under the bring forward rules will not apply to clients who have already triggered the “bring forward rule” in either this income year (ending 30 June 2024) or last year (ended 30 June 2023). Both of these income years are still within their bring forward period.

From 1 July 2024, the maximum NCC cap under the bring forward rules will be increased from $330,000 to $360,000 (which is three times $120,000).

Members wanting to maximise their NCCs using the bring forward rule may want to consider keeping any NCCs this year (ending 30 June 2024) under the current $110,000 limit. Then after 1 July 2024, trigger the bring forward rule with the higher $360,000 limit, which could allow a member to get an additional $30,000 of NCC into their superannuation fund.

We note that the NCC bring forward rule is available to members that are under age 75 (67 prior to 1 July 2022), which means that individuals under age 75 in the income year in which they make a NCC can bring forward up to three times their annual NCC, provided that they meet the relevant conditions.

Total superannuation balance

Another change is the limit for total superannuation balance and transfer balance for members with no existing pension. The total superannuation balance is the amount of money a person has in all their super accounts, while the transfer balance is the amount of money a person can move from their super account to a retirement income stream, such as an account-based pension.

From 1 July 2024, the total superannuation balance (TSB) thresholds, used to determine the maximum amount of bring-forward NCCs available to an individual, will be adjusted as follows:

TSB as at 30 June 2024	Maximum NCC cap	Bring forward period
< $1.66 million	$360,000	3 years
$1.66 to < $1.78 million	$240,000	2 years
$1.78m to < $1.9 million	$120,000	1 year
$1.9 million +	$0	0

We note that the general transfer balance cap will remain at $1.9 million for income year ending 30 June 2025.

 

News on 15 November 2023

Average refund plummets by $580, total payout down $5.4bn

Tax refunds have plunged by an average of more than $580 this year for the millions who filed their returns by the October 31 deadline, ATO figures reveal.

https://www.accountantsdaily.com.au/tax-compliance/19297-average-refund-plummets-by-580-total-payout-down-5-4bn?utm_source=Accountants%20Daily&utm_campaign=15_11_23&utm_medium=email&utm_content=1&utm_emailID=f9f4f4745b319abd4bd6b5168c9a8e9bb8666cb4c8d8276e26dafa709defa52e

News on 1 November 2023

ATO flags small business tax debt, SG as target areas

Addressing collectable debt and improving small business tax performance continue to be critical focus areas, the ATO warns in its annual report.

The ATO says addressing collectable debt, improving small business tax performance and strengthening superannuation guarantee (SG) will be important focus areas in its strategy for the remainder of FY24.

In its annual report for 2022–23, the Tax Office said small business collectable debt reached $50.2 billion at 30 June 2023, an 89 per cent increase from 30 June 2019.

“It’s our responsibility to ensure a level playing field as we support businesses who are doing the right thing and paying on time,” Commissioner of Taxation Chris Jordan stated in the report.

Mr Jordan said the ATO has already taken strong and deliberate action against those unwilling to work with the Tax Office as it increased its activities across debt collection.

While small business currently had the largest proportion of the collectable debt book, Mr Jordan said the ATO remained focused on non or late payment in every payment group in the tax system.

“We want to encourage a culture of paying tax on time and in full,” he said.

In its annual report, the ATO said it informed clients of their obligations and the actions the regulator might take if they chose not to engage with the Tax Office.

htps://www.accountantsdaily.com.au/tax-compliance/19225-ato-flags-small-business-tax-debt-sg-as-target-areas?utm_source=Accountants%20Daily&utm_campaign=27_10_23&utm_medium=email&utm_content=3&utm_emailID=f9f4f4745b319abd4bd6b5168c9a8e9bb8666cb4c8d8276e26dafa709defa52e

News on 18 May 2023

SEVEN WAYS THE BUDGET IMPACTS YOUR BUSINESS

Energy costs, asset write-offs, and cyber security were just some areas targeting small-business owners in Tuesday night’s budget.

Tuesday night’s (9 May) Federal Budget contained some recognition of the pressure small businesses have been under. And hopefully, it means help is on its way.

“We know economic conditions have been challenging for Australia’s small businesses, which is why the budget delivers this support,” said the Minister for Small Business, Julie Collins.

“[The budget] provides targeted, responsible support, improves the overall business operating environment, and helps to reduce energy price pressures.”

From staffing to operating costs to cyber security, here are some ways the budget will impact your small business.

1. Write off asset changes

Businesses that need new equipment, computers, furniture, cars, or other assets can benefit from changes to the instant asset write-off threshold to $20,000 from 1 July 2023 until 30 June 2024.

That means if your business has a turnover of less than $10 million, you’ll be able to immediately deduct assets costing less than $20,000, provided they’re first used or installed between 1 July 2023 and 30 June 2024. It will be applied on a per-asset basis, so you can write off multiple assets.

This is a watered-down version of previous measures introduced during the pandemic.

2. Lower power bills

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state, so check here for more information. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

Meanwhile, as announced shortly before the budget, small and medium businesses can claim deductions of up to $20,000 when they install energy-efficient equipment, such as electrifying their heating and cooling systems and installing batteries and heat pumps.

Try our free energy comparison tool. Your business could compare, switch and save with our free energy comparison service.

3. Big changes to super payments

Meanwhile, businesses need to be on top of payroll with big changes on the way.

Gone are quarterly super payments – from 1 July 2026, they’ll have to be paid at the same time as wages. This will enable employees to track their entitlements to ensure they are being paid on time and in full.

Also, the Australian Taxation Office (ATO) will receive funding to upgrade its data capabilities and design a new compliance system, which will identify underpaid super in real time.

For help with payroll and other aspects of managing your people, have a look at My Business Workplace.

4. Reducing business admin and helping lower tax

Those drowning in paperwork should note that from 1 July 2024, small businesses will be permitted to authorise their tax agent to lodge multiple single touch payroll forms on their behalf. And from 1 July 2025, small businesses will be permitted up to four years to amend their income tax returns.

There are also measures designed to help lower the tax-related administrative burden on businesses, including an expansion of the ATO independent review process for small businesses undergoing an audit and new tax clinics to improve access to tax advice and assistance.

To help small business cash flow, the government will halve the GDP adjustment factor for PAYG and GST instalments to 6% for the 2023–24 income year, a reduction from 12%.

Also, if you’re behind in your tax, now’s the time to catch up. The government is proposing a lodgement penalty amnesty program for businesses with a turnover of less than $10 million. This applies to statements lodged from 1 June 2023 to 31 December 2023 that were originally due from 1 December 2019 to 29 February 2022.

5. Support for your employees

Employees are the lifeblood of any small business, and measures to help them manage living costs will come as welcome news.

The government will extend eligibility for the single parenting payment to support single principal carers with a youngest child under 14 years of age. At the moment, it’s eight years.

The government will also introduce a number of housing measures to increase support for social and affordable housing across the country and improve access for home buyers.

For those employing parents, it’s worth noting that the government has pledged $55.31 billion over four years to make childcare more affordable – these changes will be in force from July.

There’s also help for your people to upskill, including 300,000 new fee-free TAFE places to train Australians in critical and emerging sectors.

The government will provide $5.5 million in 2023–24 to continue supporting negotiations on a long-term skills funding agreement with the states and territories. Subject to the outcome of these negotiations, they’ve kept $3.7 billion up their sleeve for a five-year National Skills Agreement that will commence on 1 January 2024.

6. SME cyber protections and AI

With cyber attacks a growing threat to small businesses, the government will launch a program to train cyber wardens . To learn more about how your business can protect itself against cyber attacks, have a look at this information on My Business.

Meanwhile, the government is giving $101.2 million over five years to support small businesses integrating artificial intelligence (AI) and quantum technologies to improve business processes and increase trade competitiveness.

7. Funding for growth

And finally, for those with an innovative idea to develop, take note of the government’s new support for SMEs and start-ups trying to commercialise their ideas and grow their operations.

The government will provide $431.9 million over four years, including an Industry Growth Program and continuation of the Single Business Service, which supports SMEs in engagement with all levels of government.

https://www.mybusiness.com.au/how-we-help/be-a-better-employer/managing-people/seven-ways-the-budget-impacts-your-business?utm_brand=MB&utm_prodcat=content&utm_prod=article&utm_campaigntype=eng&utm_livedate=20230516&utm_target=nat&utm_campaign=mm_newsletter&utm_medium=edm&utm_source=mb&utm_content=business_7_ways_budget_impacts_you

News on 15 May 2023

ATO crackdown focuses on rental properties, work claims, CGT

https://www.accountantsdaily.com.au/tax-compliance/18535-ato-crackdown-focuses-on-rental-properties-work-claims-cgt

News on 25 Jul 2022

You may have heard of the instant asset write off scheme (IAWO), but you might not know exactly what is the instant asset write off for small businesses and how it actually works.  What’s the purpose of this instant asset write off scheme? As it has been over the last few years, the aim of this scheme is to get cash flowing into the economy and businesses spending while also incentivising the growth of that business.

Now that we live in a post COVID-19 world, the scheme has been expanded in scope and become even more important to aid the recovery of individual businesses like yours, and the economy at large.  “The instant asset write off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure,” Josh Frydenberg, Australian federal government Treasurer.

Instant asset write off for small businesses

The instant asset write off for small business is a handy tax saving scheme available for all Australian small businesses.  Basically, if you’ve bought a core piece of depreciating equipment or other work-related business assets, you can save on your tax bill with a nice offset by making an immediate tax deduction.  The idea behind the scheme is to encourage spending and business growth by incentivising the purchase and installation of work-related equipment for eligible businesses.

How does instant asset write off work?

The instant asset write off scheme works by allowing you to immediately write off the value of a business-related piece of equipment or asset.

• For small businesses with annual turnover between $50 million and $500 million, they can now claim a full deduction for new and second-hand assets valued up to $150,000.

You must be able to prove that the piece of equipment is central to your business and its operation. This is crucial.  Depending on your business, eligible assets for the instant asset write off can include:

• vans, trucks, and vehicles
• tools and trade equipment
• computers and IT equipment
• plant machinery
• coffee machine and kitchen equipment

Many assets don’t qualify for the scheme, and you’ll need to be sure of your purchase before you proceed down this avenue.  From the ATO:

• The asset may be either new or second hand.
• It must be directly linked to your business function.
• You may claim a portion for personal and for business. So, if you use a delivery van for 30% work use and 70% personal use, you can dice it up and claim that 30% portion.
• You may not stockpile. You must have the equipment installed and in use for business purposes by the end of financial year.
• You must be an operational business, not a holding for investment purposes.

How to calculate and how much is instant asset write off?  Fresh changes to the scheme were announced in the 2020 federal budget, so you may not be aware of its current state. The scheme was also extended in the 2021 federal budget.

The instant asset write off has been boosted yet again in the form of ‘temporary full expensing’, which is intended to increase both cash flow and small business investment.

• Until 30 June 2023, businesses with a turnover of up to $5 billion will be able to deduct the full cost of an eligible asset in the first year it’s used or installed.
• SMEs turning over up to $50 million can now apply ‘full expensing’ to all second-hand assets.
• Businesses turning over between $50 million and $500 million can now claim a full deduction for second-hand assets of up to $150,000 in value.

 Who can access the instant asset write off?

Any Australian small business that purchased business related equipment, and complies with the above specifications for eligibility, can utilise the instant asset write off scheme.  Just because you can doesn’t mean you should. Will your business actually benefit from instant asset write off? Perhaps not.  First and foremost, you need to make sure that the purchase will help grow your business.

If your business is in a tenuous position, or the future of your cashflow is in doubt, reconsider your need to purchase assets.

There are several ways in which this tax offset would be of no benefit:

• You’re operating at a loss.
• You don’t really need the equipment as a core part of your operations.
• You don’t have the capital to buy the equipment before any tax benefit kicks in.
• The equipment doesn’t directly contribute to cashflow.

Think seriously about whether you actually need anything. Many businesses don’t. This isn’t a free ticket after all, as you’ll have to stump the initial costs and benefit from the write off later.  You must also make sure your purchase is covered before you proceed. If unsure, speak to an advisor.

How to apply and record instant asset write off?

When approaching the topic of how to apply and record the instant asset write off, get your advisor involved.  Accountants and finance experts excel in this area, and they should be your first port of call before you lay down cash with a view to take advantaging of the scheme.  How to calculate the IAWO scheme from the ATO:

• The whole price of the equipment or asset must be under the threshold ($150,000 for most small businesses).
• The threshold will be calculated as either inclusive or exclusive of GST, depending on whether your business is registered for GST or not.
• To calculate the amount you’re eligible to claim, be sure you first subtract the portion of the equipment you use for private or personal use.
• The remaining balance used for business is your taxable portion.
• Regardless of how much you use for private use and how much the taxable portion is, the entire cost of the asset must still be under the threshold.

Understanding what is and how does the instant asset write off work for small businesses is best understood in conjunction with your advisor. Failing that, be sure to consult the ATO here to come to a full understanding of the instant asset write off scheme.

Should you have any questions, please feel free to contact us.

News on 23 May 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

As part of the 2021 Budget, the Government announced a number of initiatives that are now law and take effect from 1 July 2022. 

 

SG rate will increase to 10.5%

The superannuation guarantee (SG) rate will increase from 10% to 10.5% on 1 July 2022. The SG rate is the minimum amount of super you’re required to pay, by law, on ordinary time earnings. This increase is in line with the Government’s plan to increase the SG rate to 12% by 2025.

Super guarantee percentage

Table 21: Super guarantee percentage

Period	General super guarantee (%)	Super guarantee (%) for Norfolk Island (transitional rate) (from 1 July 2016)
1 July 2020 – 30 June 2021	9.5	5
1 July 2021 – 30 June 2022	10	6
1 July 2022 – 30 June 2023	10.5	7
1 July 2023 – 30 June 2024	11	8
1 July 2024 – 30 June 2025	11.5	9
1 July 2025 – 30 June 2026	12	10
1 July 2026 – 30 June 2027	12	11
1 July 2027 – 30 June 2028 and onwards	12	12

$450 salary threshold for SG contributions removed

From 1 July 2022, the $450 monthly threshold for the payment of SG contributions will be removed. 

This means you’ll be required to make SG contributions to all eligible employees aged 18 years and over, regardless of how much the employee is paid. 

Employees aged under 18 years will be eligible for superannuation if they work more than 30 hours in a week, regardless of how much they’re paid. 

For more information read the ATO’s recent announcement. 

Work test for older Australians removed

From 1 July 2022, employees aged under 75 years will be able to make or receive personal (after tax) and salary-sacrificed contributions without meeting the work conditions – known as the work test or work test exemption. 

The existing contribution cap limits will still apply and employees may also be able to use the bring forward rule. These employees will still need to meet the work test to claim any personal super contribution deductions. 

For more information read the ATO’s acceptance of member contributions and work test webpage.

News on 13 April 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

Pensioners and others receiving eligible government concession holders, will receive a one-off, income tax-exempt payment of $250. This will be paid automatically in April 2022 to eligible recipients.

$450 salary threshold for super contributions removed
From 1 July 2022, the $450 monthly threshold for the payment of superannuation guarantee (SG) contributions will be removed. This means you’ll be required to make SG contributions to all eligible employees, regardless of how much the employee is paid.

For more information read the ATO’s recent announcement.

News on 3 February 2022

NSW small businesses have been thrown a lifeline with a $1 billion support package announced on Sunday by the NSW government.

The state’s peak business organisation, Business NSW, said the package would help a wide variety of businesses that had been hard hit by the Omicron surge. 

The package, which starts February 1, includes: 

• a lump-sum payment of 20% of weekly payroll with a minimum payment of $500 per week and a maximum payment of $5,000 per week. It is for businesses with a turnover between $75,000 and $50 million that suffered a 40% downturn in January and projected to do the same in February. 
• The Small Business Fees and Charges rebate program extended from $2,000 to $3000, and employing businesses will be able to use the rebate to obtain rapid antigen tests (RATs).
• Commercial landlord relief will be extended until 13 March.

News on 17 December 2021

Dear customers, business associates and friends,

My team and I want to thank you for your ongoing support of us in 2021.

Our office will be closed from Friday 17^th December and will be re-opened Monday 10^th January 2022.

My team and I wish you and your family a wonderful festive season and a happy, healthy and prosperous 2022.  We look forward to working for you in 2022.

Regards,

Donny Tsui

Senior Partner

News on 4 November 2021

The Australian Government has announced the full implementation of Modernising Business Registers (MBR) program as part of its Digital Business Plan. As an effect, the government has introduced Director Identification Number (Director ID / DIN) 

 What is a Director Identification Number (DIN)?

The Director Identification Number (director ID) is a unique identifier that a director will apply for once but will stay with a director for life, offering greater identity security. You will need a director identification number (DIN / Director ID) if you’re a director of a company or a corporate trustee of a self-managed super fund (SMSF), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. The objective of this rollout is to create a fairer business environment by helping prevent the use of false and fraudulent director identities. This will go a long way to better identifying and eliminating director involvement in unlawful activity.

How and when to apply for DIN?

Directors will be able to apply for a Director ID from November 2021 on the new Australian Business Registry Services (ABRS) online and log in using the myGovID app to complete the application process. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

Directors will need to apply for their director ID by themselves to verify their identity. No one can apply for it on their behalf.

When will directors need to apply?

Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director. The table below illustrates the same in detail.

How director ID works?

A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with ABRS.

Directors will only ever have one director ID. They’ll keep it forever even if they – change companies, stop being a director, change their name, move interstate or overseas.

Why you need a director ID?

All directors are required by law to verify their identity with ABRS before receiving a director ID.

This is important because it will help to:

• prevent the use of false or fraudulent director identities
• make it easier for external administrators and regulators to trace directors’ relationships with companies over time
• identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

 How can agents assist their impacted clients?

An agent or advisor cannot apply on behalf of the director, but they can still provide assistance to their clients by providing guidance on the verification and application process, including if their client is required to get a director ID.

Agents can support their clients by:

• letting them know about the new requirement, when and how to apply
• encouraging their clients to set up their myGovID to a Standard identity strength, if they have not done so already, and
• guide and support their clients through the process of applying for a Director ID.

How does it affect the current company registration process?

For now, there will be no change to how you register a company with us, hence there is no requirement include the DIN in your company application form or any changes to company forms (484, etc). This will take place in the future as the ABRS builds the new registry platform, and we will keep you up-to-date with any developments during this course.

Should you have any questions, you can talk to your accountant or us to learn more about the MBR program.

News on 7 October 2021

JobSaver now available for charitable not-for-profits (NFPs)
Eligible NFPs can apply for JobSaver if they have experienced a turnover decline of at least 15% and less than 30% because of the public health orders.

The JobSaver program has been extended to charitable NFP organisations that have experienced a turnover decline of at least 15% and less than 30% as a result of the public health orders.

NFPs are eligible for this program if they are charitable and their primary purpose, under Australian Charities and Not-for-profits Commission (ACNC) classifications, is to:

• advance social or public welfare (including disability and health social support services), or
• prevent or relieve the suffering of animals (for example, animal welfare organisations).

For more information about eligibility for charitable NFP organisations that have experienced the required decline in turnover.

News on 15 July 2021

Government support micro and small business during lockdown The Australian and NSW Governments announced new measures

New measures to support small businesses during the current NSW lockdown were announced yesterday. These include: Increased small business support payments of $7,500 and $10,500 or $15,000, depending on the decline in business turnover A “JobSaver” employee retention scheme providing cashflow support to businesses to help them retain staff. The cash boost will be up to 40% of weekly payroll with a payment of between $1,500 to a maximum of $10,000 per week, provided staffing levels are maintained at the level as of 13 July 2021. Non-employing businesses are eligible for $1,000 p/w $1,500 grants per fortnight for microbusinesses (annual turnover between $30,000 and $75,000) that have suffered at least a 30% decline in turnover. Payroll tax deferrals for all businesses and a 25% concession for medium-sized businesses that have suffered a 30% revenue decline A requirement on landlords to participate in mediation before taking actions to evict or lock out tenants Up to 100% land tax concessions for commercial landlords who provide rent relief A $75 million support package for the performing arts sector to be administered by Create NSW A support package for the accommodation sector worth $26 million An increase in the payment amount for stood down workers from $500 to $600 per week for those who lost more than 20 hours, and to $375 for those who lost between 8 and 20 hours, and for it to be available to workers outside of the Greater Sydney lockdown areas Expanded mental health services with programs targeted at young people and CALD communities

News on 29 June 2021

Small businesses urged to pay attention to key areas and act now in EOFY tax planning

Dear customers and business associates,

The end of financial year is only a few days away.  There are some last minute tips for your tax planning:-

• Super guarantee (SG): SG contributions must be paid by 30 June 2021 to qualify for a tax deduction in the 2020–21 financial year. The superannuation fund must receive these contributions by 30 June. He said some clearing houses can take more than a week to submit the payment to the super fund, so it would be advisable to ensure that superannuation is paid by mid-June where possible.

• Temporary full expensing (previously known as the instant asset write-off): Policies have been expanded again in the last two federal budgets as part of the government’s COVID-19 initiative to encourage business spending to improve cash flow. There is now no limit to the amount a small business can write off under this concession and, unlike larger businesses, small businesses with aggregated turnover less than $50 million receive a full write-off for secondhand assets. While the May 2021 federal budget extended the concession all the way up until 30 June 2023, there is still a timing advantage where claims can be made in 2020–21.

• Loss carry-back: Another concession introduced in the October 2020 federal budget and extended for a further 12 months in the May 2021 Budget, this concession allows a company (i.e. not available to partnerships, trusts or individuals) to “carry back” tax losses incurred in any of the 2019–2020, 2020–21, 2021–22 and 2022–23 income years to an earlier year as far back as 2018–19. A refund could be claimed on lodgement of tax returns from the 2020–2021 year onwards, representing the tax saving that would have arisen if the tax loss had been available to claim in the earlier year.

• Small business CGT concessions: Those operating a small business may be eligible for these concessions on the sale of business assets by a company or on the sale of shares in a company carrying on a business. The concessions may be available where aggregated turnover is less than $2 million or total net assets (excluding the family home and superannuation fund balances) less than $6 million, although the eligibility rules are quite strict, having been tightened significantly in recent years.

• Income deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June. Income from the payments won’t be taxed until the following financial year.

Should you have any queries, please contact us.

News on 21 June 2021

Minimum wage to increase by 2.5%

Following the Annual Wage Review 2021, the Fair Work Commission has announced a 2.5% increase to minimum wages. This will also apply to all award wages, with the award increase happening in 3 different stages.

You don’t need to do anything now. We will let you know when the new minimum wages are available in our pay tools.

See our Annual Wage Review 2021 page for more information.

News on 3 June 2021

Super Guarantee rate rising 1 July

On 1 July 2021, the super guarantee rate will rise from 9.5% to 10%. If you have employees, you will need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate.

If you need help to work out how much super you need to pay for your employees after 1 July, you can use our super guarantee contributions calculator.

It’s important you pay your workers the correct amount of super. Our superannuation guarantee eligibility decision tool will help you determine if your employees are eligible for super, including any contractors treated as employees for super purposes.

The super rate is scheduled to progressively increase to 12% by July 2025. You can find the scheduled rate increases and dates on our website.

News on 13 May 2021

Australian Federal Budget 2021-22

On 11 May 2021, the Government handed down the 2021/22 Federal Budget. Whilst this marked a return to the traditional timing of the budgetary processes, the content of the 2021/22 Budget continues to remind us that our economy and way of life has still not returned to full normality post the events of COVID-19. 

Highlights

Personal income tax

• Retaining LAMITO (Low And Middle Income Tax Offset) in the 2021-22 income year.
• Modernising the individual tax residency rules – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
• Reducing compliance costs for individuals claiming self-education expense deductions.
• Medicare levy thresholds for 2020-21.

Business owners

• Temporary full expensing extension until 30 Jun 2023.
• Temporary loss carry-back extension.
• Digital Economy Strategy — self-assessing the effective life of intangible depreciating assets.
• Addressing Workforce Shortages in Key Areas — JobTrainer Fund — extension.
• Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion.
• Getting Vulnerable Australians Back into Work — additional support for job seekers.
• SME Recovery Loan Scheme.
• Employee Share Schemes — removing cessation of employment as a taxing point and reducing red tape.
• Patent Box — tax concession for Australian medical and biotechnology innovations.

Superannuation

• First Home Super Saver Scheme — increasing the maximum releasable amount to $50,000.
• First Home Super Saver Scheme — technical changes.
• Reducing the eligibility age for downsizer contributions.
• Repealing the work test for voluntary superannuation contributions.
• Removing the $450 per month threshold for superannuation guarantee eligibility.
• Early release for victims of family and domestic violence.
• Legacy retirement product conversions.
• SMSFs — relaxing residency requirements.
• Transfer of superannuation to the KiwiSaver Scheme.

Not-for-profits and philanthropy

• Not-for-profits — enhancing the transparency of income tax exemptions.
• Philanthropy — updates to the list of specifically listed deductible gift recipients.

Child care

• Child care subsidy.
• Other measures.

Social security

• Increasing the Flexibility of the Pension Loans Scheme.
• Enhancing Welfare Integrity Arrangements.
• Increased support for unemployed Australians.

Aged care

• Whole-of-government response to Royal Commission into Aged Care Quality and Safety.

News on 3 Feb 2021

Businesses can get $10k a year for each new employee, says ATO

Businesses could potentially receive up to more than $10,000 over a year for each eligible additional employee hired, says Australian Taxation Office deputy commissioner James O’Halloran.

Contact us for more details.

News on 25 Jan 2021

Dear customers, business associates and friends,

We would like to inform you that we will be moving to our new office which is 210/2 Pembroke Street, Epping 2121 on 26 Jan 2021.

In fact, it is only a minute on foot away from our previous office.  Below please find the map showing how to go from our old office to the new office for your reference.

Please drop by to have a cup of coffee if you are in the area.

Should you have any questions, please contact us.

Yours faithfully,

Donny Tsui

News on 18 Dec 2020

Dear customers, friends and business associates,

As this challenging year draws to a close, we trust that some of the difficulties of the last 12 months are now behind all of us.  We would like to express our sincerest appreciation for your support throughout 2020.

We hope we were able to assist you. This year end means the beginning of a new one with new possibilities and we are dedicated to continuing to help you reach your goals in 2021.

From all of us at D & I Accounting, we want to say a big thank you for being an invaluable part of our business and wish you a Merry Christmas and a bigger and better year ahead.

Our office will close on Friday, 18 December 2020 and return on Monday, 4 January 2021. 

Regards,

Donny Tsui

News on 12 Dec 2020

Businesses will now be able to register for the JobMaker Hiring Credit scheme ahead of the first quarterly claim period starting in February next year.

Under the scheme, eligible businesses can access the payment for up to 12 months for each eligible additional employee they hire between 7 October 2020 and 6 October 2021, and will be able to claim up to $200 a week for each additional eligible employee they hire aged 16 to 29 years, and up to $100 a week for those aged 30 to 35 years.

Employees need to have completed a minimum average of 20 hours (worked or paid) per week during the time they were employed in the JobMaker period.

ATO Deputy Commissioner James O’Halloran said the ATO is working hard to make it as easy as possible for employers to access the government’s JobMaker Hiring Credit payment.

He also encouraged businesses to check their eligibility and take this first step to register for the scheme from this week and then employers will be ready to move to quickly make a claim in February 2021, as they cannot claim if they are not registered.

“We encourage employers to register from now to ensure their hiring credits can be paid promptly from when the first quarterly claim period opens in February 2021,” Mr O’Halloran said.

“Employers are reminded that new employees must have received the Parenting Payment, Youth Allowance (Other) or JobSeeker Payment for at least 28 consecutive days (or two fortnights) within the 84 days (or six fortnights) of being hired to allow for a claim to be made by the employer.

“There are some key dates to keep in mind, and simple steps employers can take now, but please remember that not everything needs to be done from next week.”

The federal government established the JobMaker Hiring Credit payment to help accelerate growth in the employment of young people during the COVID-19 economic recovery.

News on 7 Oct 2020

Federal Budget 2020-2021

Tax cuts, more incentives for business investment and payments for pensioners and aged care: tonight’s Federal Budget was a wide-ranging fiscal program to cushion the impact of the Covid-19 pandemic and kickstart an economic recovery.

WINNERS

Taxpayers 

Key to the government’s strategy is to put money in the pockets of taxpayers in the hope they will boost spending and the resulting demand will help lift the economy out of recession. 

To that end, more than 11 million taxpayers will receive a tax cut backdated to July 1 this year.

Stage Two of the legislated tax cuts will be brought forward by two years, lifting the 19 per cent threshold from $A37,000 to $A45,000, and the 32.5 per cent threshold from $A90,000 to $A120,000. 

This would result in a tax relief of up to $A2745 for singles, and up to $A5490 for dual income families compared with 2017-18. 

Established businesses

The budget includes a range of measures designed to encourage established businesses to spend on plant and equipment, invest in research and development, and also hire or retain workers. 

The Instant Asset Write Off for businesses will be extended to businesses with a turnover of up to $A5 billion and will be further extended until June 2022. 

There is also relief for businesses which have been “doing it tough” during the pandemic, with a measure which will enable them to use their losses earlier. 

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018/19 financial year. 

To encourage businesses to hire younger Australians, the government has announced a new program called JobMaker, which will contribute $A200 per week, payable for one year, towards the hiring of people aged 16-35 who are currently on JobSeeker. 

The payment for those aged 30-35 is $A100 per week. 

The government estimates that the combination of the immediate expensing of capital expenditure and loss carry-back measures will create an additional 50,000 jobs nationally. 

For R&D, the budget removes the cap on refunds and lifts the rate. 

Apprentices 

In vocational training, the budget commits an additional $A1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them. 

Infrastructure projects

In keeping with its plan to boost jobs, the budget expands the government’s 10-year infrastructure pipeline, bringing to $A14 billion the new and accelerated infrastructure projects which would support an estimated 40,000 new jobs. 

The projects span the nation, and include major road upgrades in several states and rail projects in Victoria and Western Australia, and new bridges in Tasmania and the ACT. 

An additional $A2 billion is also earmarked for road safety upgrades. 

According to Frydenberg, “Funding for these shovel-ready projects will be provided on a use it or lose it basis. If a state drags its feet, another state will get the money. We need works to start, not stall.” 

Pensioners

Aged pensioners will receive an additional $A250 payment from December and a further $A250 payment from March next year. 

There is also a package for senior Australians who wish to continue living in their own homes, with $A1.6 billion earmarked for an additional 23,000 home care packages, bringing the total to 180,000 places. 

Manufacturing

As the pandemic has exposed issues in Australia’s globally reliant supply chain, the focus has switched back to manufacturing for national resilience as well as job creation.

The budget includes a $A1.3 billion Modern Manufacturing plan to target six key industries, from food and beverage manufacturing to renewable energy and the space industry. 

Regional Australia

While much of the national focus has been on the pandemic, regional Australia is still suffering the economic impact of the drought and bushfires. 

The budget includes $A2 billion in concessional loans for farmers, and $A2 billion for water infrastructure projects across the country to expand the national water grid. 

$A350 million has been allocated to support regional tourism, while $A317 million is earmarked for exporters to continue to access global supply chains.  

The NDIS and mental health services 

The budget includes an additional $A3.9 billion for the National Disability Insurance Service, with the Treasurer assuring “every Australian” that the NDIS would “always be fully funded” under a coalition government. 

The budget also doubles the number of Medicare psychological services funded through the Better Access Initiative from 10 to 20. 

First home buyers 

As telegraphed before the budget, the government announced an additional 10,000 places for first home buyers of new homes under the First Home Loan Deposit Scheme. 

The budget also includes an additional $A1 billion in low cost finance for the construction of affordable housing, and $A150 million in the Indigenous Home Ownership Program for new homes in regional areas. 

Women in STEM and female entrepreneurs 

Recognising that women have made up the majority of those who lost their jobs during the pandemic, the Budget includes the government’s second Women’s Economic Security Statement, with $A240 million in programs and support. 

These focus on new cadetships and apprenticeships for women in science, technology, engineering and mathematics, job creation and entrepreneurialism. 

LOSERS

Long-term or older unemployed 

While these people received a $A550 fortnightly coronavirus supplement to their JobSeeker payments in March, this has been cut to $A250 and is scheduled to end by December 31. 

The budget makes no mention of whether this supplement will be continued or if JobSeeker will be increased on a permanent basis, and there are no targeted programs for unemployed people older than 35. 

Self-funded retirees 

Already struggling due to record low interest rates, which have crimped the returns from the term deposits many of them rely on, this group – who do not get the aged pension – receive nothing in the budget. 

New businesses 

While there are incentives for existing businesses, the instant asset write off is the main measure which new businesses can take advantage of. 

There are no specific incentives or programs to encourage start-ups and new businesses. 

“CPA Australia is disappointed that the budget does not include any specific assistance for those new to business. These entrepreneurs also need help to survive having already missed out on JobKeeper, the Cash Flow Boost and several state government grants,” says Ord. 

News on 1 Oct 2020

Due to the ongoing COVID-19 pandemic and the impact on Australian businesses, the Federal Government extended JobKeeper until March 2021 for qualifying businesses. The extension affects the way you need to process Jobkeeper in your software. Here’s a summary of the key changes:

Extension 1: 28 September 2020 to 3 January 2021

• Tier 1: Full time employees $1,200 per fortnight 
• Tier 2: Part time employees $750 per fortnight 

Extension 2: 4 January 2021 to 28 March 2021

• Tier 1: Full time employees $1,000 per fortnight 
• Tier 2: Part time employees $650 per fortnight 

Your employees will either be a JobKeeper Tier 1 employee or a JobKeeper Tier 2 employee. This is determined by how many hours they worked in the month before becoming eligible for JobKeeper. It is an employer’s responsibility to determine the JobKeeper tier.

News on 23 May 2020

Instant asset write-off for eligible businesses

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.

Changes from 12 March 2020

From 12 March 2020 until 30 June 2020 the instant asset write-off:

• threshold amount for each asset is $150,000 (up from $30,000)
• eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

For more information, you can visit https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/

News on 30 March 2020

Federal Stimulus Package – JobKeeper Payment

In case you haven’t heard, the federal government has announced a JobKeeper Subsidy Payment to assist businesses which are struggling to retain their employees due to the impacts of COVID-19.

To summarise:

• Details:
  • This is a temporary subsidy open to businesses impacted by COVID-19
  • The government will provide $1,500 per fortnight per employee for up to 6 months
• Eligible Businesses:
  • Business turnover less than $1 billion & business will experience more than 30% reduction compared to a year ago; or
  • Business turnover more than $1 billion & business will experience more than 50% reduction compared to a year ago.
  • Employee must have been employed as at 1 March 2020 & currently employed (incl. those stood down or re-hired)
• Timing:
  • First payments to be received in the first week of May

If you are interested in applying for this concession, please register your interest at: https://www.ato.gov.au/general/gen/JobKeeper-payment/ or alternatively please contact our office to register for your business.

News on 18 January 2020

Federal Stimulus Package Info

During these times, a few key areas that is likely to be applicable to you are:

1.      Increasing the instant asset write off to immediately deduct purchases of eligible assets costing less than $150k (including new and second hand assets purchased from 12 March 2020 to 30 June 2020).

2.      Business investment allowance which includes a 50% accelerated depreciation rate on new assets acquired after 12 March 2020 or installed by 30 June 2021.

3.      Boosting Cash Flow for Employers – Eligible businesses (aggregated turnover under $50m) that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. When you lodge the Mar 2020 BAS, ATO will credit the integrated client account to provide this benefit. This cash flow assistance is available for PAYG withholding lodgements for the months of March, April, May and June 2020.

News on 13 January 2020

Government announces coronavirus stimulus package
The government has announced a range of measures to support the economy, business and employment in the face of the coronavirus health crisis. The measures include the below.

Cash Flow Boost for employers – employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment of $2,000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a payment equal to 50 per cent of taxes withheld from employees’ salary and wages up to $25,000. 

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

The payment will be delivered as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Increasing the instant asset write off – the government is proposing to increase the threshold for the instant asset write off from $30,000 to $150,000 and expand access to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available from 12 March to 30 June 2020 for new or second-hand assets first used or installed ready for use by 30 June 2020.

Accelerated deprecation – the government is proposing an accelerated deprecation deduction for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50 per cent of the cost of the eligible asset on installation, with existing depreciation rules applying to the balance. Eligible businesses are those with an aggregated turnover below $500 million. Eligible assets are those that can depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is plant, equipment and specified intangible assets, such as patents), but does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Apprentice and trainee wage subsidy – the government will offer employers a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage from 1 January to 30 September 2020, capped at $7000 each quarter per each eligible apprentice or trainee. Businesses with less than 20 full-time staff will be eligible, however employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.

Direct payment to individuals – the government will make a one-off payment of $750 to around 6.5 million social security, veterans and other income support recipients and eligible concession card holders residing in Australia.

Should you need further details, you can visit Treasury website.

https://treasury.gov.au/coronavirus?utm_source=exacttarget&utm_medium=email&utm_term=All%20Subscribers&utm_content=https%3a%2f%2ftreasury.gov.au%2fcoronavirus&utm_campaign=CPA+Tax+News+ed+9+-+12+March+2020_12-March-2020

News on 8 December 2019

Wishing you a Merry Christmas and a Happy New Year!
Please be advised that our office will close on Wednesday 18 December 2019 and re-open on Monday 13 January 2020.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 1 July 2019

Single Touch Payroll (STP) is a new way for employers to report tax and super information to the ATO. It starts from 1 July 2019 for employers with 19 or less employees.
You’ll report the following information through an STP ready solution – such as payroll software:
	payments to employees such as salaries and wages pay as you go (PAYG) withholding super information.
The way you pay your employees won’t change, however you will be sending us this information each time you pay them.
Start reporting any time from 1 July to 30 September 2019. If you can’t start reporting by this time, you’ll need to apply for a later start date. An online tool to help you do this will be available on our website in April.
How to get started
	If you already use payroll software – check to see if it offers STP reporting by talking to your software provider or viewing their website. If you don’t use payroll software – you can choose an STP ready solution or talk to your tax professional for advice on the best solution for your business. If you use a registered tax or BAS agent – you can ask them to report through an STP ready payroll solution on your behalf. If you have 1-4 employees – you can choose a low-cost STP solution. Find out more at ato.gov.au/STPsolutions

News on 23 September 2016

Tax cuts – withholding amounts changed

16 September 2016

The Australian Government has increased the 32.5% tax threshold from $37,001 – $80,000 to $37,001 – $87,000.

What does this mean for employers?

The tax tables have changed for employees who earn over $80,000.

You need to download the updated tax tables from ato.gov.au/taxtables or contact your payroll software provider for the relevant update.

Do employers need to make any other adjustments?

The new tax tables are effective from 1 October 2016. You don’t need to make any other adjustments or refunds as we will refund any over-payment of tax when your employees (and payees) lodge their 2016-17 income tax return.

News on 02 June 2016

Give yourself an EOFY check-up

1. Consult your accountant – now

The first big mistake many businesses make is failing to truly engage with their accountant or financial advisor. This interaction should go beyond mere compliance and tax return submissions to include growth and cash-flow strategies, according to Peter Langham, chief executive officer of business finance specialist Scottish Pacific. He believes owners of small and medium-sized entities, in particular, often focus on their work in the business at the expense of working on the business strategy. “So they can miss opportunities,” Langham says.

2. Take advantage of a $20,000 asset write-off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. Alex Duonis, ‎principal, tax consulting at business advisory firm Crowe Horwath Australia, says the accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. He warns, though, that it applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1000. “So there’s quite an opportunity now to get that accelerated deduction,” Duonis says.

3. Maximise any other deductions

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June.

4. Write off bad debts

Ensure you write off any bad debts and prepare minutes documenting the debts and all efforts you have made to recover them, otherwise they cannot be claimed as deductions. This action also enables adjustments for any GST charged on the invoice. Langham says the key is to act now rather than waiting a few months until you do your tax return. “Do it before 30 June and look at your sales ledger and any possible delinquent accounts and make sure you provide for them in this financial year,” he says.

5. Comply with your superannuation requirements

Getting organised on the superannuation front is a must. Duonis notes that super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. “This is a good way of reducing your income tax bill,” he says.Duonis says business owners should also consider making concessional contributions into their super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over. The June 30 deadline is also approaching for employers with 19 or fewer employees to be using Super Stream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using Super Stream.

6. Understand how to manage cash flow

Langham urges business owners to start the new financial year in a healthy cash position. This means reviewing your cash-management processes and adopting the most appropriate funding solutions.

“It’s a good time of year to plan for the business’s future and make sure that all appropriate steps are taken in terms of managing cash flow,” he says.

A common error, Langham observes, is injecting too much cash into superannuation to take advantage of tax breaks while not appreciating the potential impact on the business’s cash flow. Then the business can feel the pinch on 1 July.

“We see a lot of businesses that do their planning, spend the money and then realise their cash flow doesn’t support their strategy,” Langham says.

7. Check your trust obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June. Duonis says this is normally done by way of a distribution minute that may specify distributions on a percentage basis without dollar amounts being specified. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

“So clients who have those sorts of entities ought to be talking to their accountants now about where income goes this year,” Duonis says.

8. Consider any capital gains tax benefits

If your business has made a capital gain in the current financial year, it makes sense to assess the presence of any other capital losses that may offset those gains. For example, you could include selling assets that have incurred a capital loss.

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

Duonis warns that any changes have to be of a genuine business restructure, not a move simply to get tax benefits.

“The bill didn’t get a lot of publicity, but it provides more opportunities for businesses to change their structure without tax charges.”

Words by Cameron Cooper

The articles represent the views of the authors and not necessarily that of the Bank. They are only intended as a general guide and do not represent tax advice you should seek independent professional tax or financial advice before acting on any matters set out in the articles.

– See more at: https://businessfocus.westpacgroup.com.au/blog/2016/may/18/give-yourself-an-eofy-check-up/#sthash.t67trzER.dpuf

02 February 2016

What’s new for small business?

Instant asset write-off – simpler depreciation rules

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

This deduction can be used for each asset that costs less than $20,000, whether new or second-hand. The deduction is claimed through a tax return, in the year the asset was first used or installed ready for use.

From 1 July 2017, the threshold will return to $1,000.

Accelerated depreciation for primary producers

From 12 May 2015, primary producers can immediately deduct the costs of:

• fencing, which were previously deducted over a period up to 30 years
• water facilities, previously deducted over three years.

They can also deduct the cost of fodder storage assets over three years, instead of over a period up to 50 years.

Primary producers who are small businesses are also eligible to claim the instant asset write-off until 30 June 2017.

Deductions for professional expenses for start-ups

From 1 July 2015, small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice and government fees and charges.

Small business restructure roll-over (capital gains tax roll-over relief)

In the 2015 Budget, the government announced that it will allow small businesses to change the legal structure of their business without attracting a capital gains tax (CGT) liability at that point.

The exposure draft legislation included a possible extension of the relief to transfers of trading stock, revenue assets and depreciating assets. If passed, these changes will apply to asset transfers that occur on or after 1 July 2016.

The proposed changes are not yet law.

Fringe benefits tax changes for work-related devices

From 1 April 2016, small businesses will not incur a fringe benefits tax (FBT) liability if they provide their employees multiple work-related portable electronic devices that have similar functions. These include devices that are primarily used for work, such as laptops, tablets, calculators, GPS navigation receivers and mobile phones.

This benefit may be in addition to or part of the employee’s salary or wages package.

Small business income tax offset

From the 2015–16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

• net small business income from sole trading activities, and/or
• share of net small business income from a partnership or trust.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Company tax cut for small businesses

For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%.

The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.

23 December 2015

Wishing you a Merry Christmas and a Happy New Year.
Please be advised that our office will close Thursday 24 December 2015 at 12 noon and re-open Tuesday 5 January 2016 at 9 am.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 18 May 2023

SEVEN WAYS THE BUDGET IMPACTS YOUR BUSINESS

Energy costs, asset write-offs, and cyber security were just some areas targeting small-business owners in Tuesday night’s budget.

Tuesday night’s (9 May) Federal Budget contained some recognition of the pressure small businesses have been under. And hopefully, it means help is on its way.

“We know economic conditions have been challenging for Australia’s small businesses, which is why the budget delivers this support,” said the Minister for Small Business, Julie Collins.

“[The budget] provides targeted, responsible support, improves the overall business operating environment, and helps to reduce energy price pressures.”

From staffing to operating costs to cyber security, here are some ways the budget will impact your small business.

1. Write off asset changes

Businesses that need new equipment, computers, furniture, cars, or other assets can benefit from changes to the instant asset write-off threshold to $20,000 from 1 July 2023 until 30 June 2024.

That means if your business has a turnover of less than $10 million, you’ll be able to immediately deduct assets costing less than $20,000, provided they’re first used or installed between 1 July 2023 and 30 June 2024. It will be applied on a per-asset basis, so you can write off multiple assets.

This is a watered-down version of previous measures introduced during the pandemic.

2. Lower power bills

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state, so check here for more information. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

Meanwhile, as announced shortly before the budget, small and medium businesses can claim deductions of up to $20,000 when they install energy-efficient equipment, such as electrifying their heating and cooling systems and installing batteries and heat pumps.

Try our free energy comparison tool. Your business could compare, switch and save with our free energy comparison service.

3. Big changes to super payments

Meanwhile, businesses need to be on top of payroll with big changes on the way.

Gone are quarterly super payments – from 1 July 2026, they’ll have to be paid at the same time as wages. This will enable employees to track their entitlements to ensure they are being paid on time and in full.

Also, the Australian Taxation Office (ATO) will receive funding to upgrade its data capabilities and design a new compliance system, which will identify underpaid super in real time.

For help with payroll and other aspects of managing your people, have a look at My Business Workplace.

4. Reducing business admin and helping lower tax

Those drowning in paperwork should note that from 1 July 2024, small businesses will be permitted to authorise their tax agent to lodge multiple single touch payroll forms on their behalf. And from 1 July 2025, small businesses will be permitted up to four years to amend their income tax returns.

There are also measures designed to help lower the tax-related administrative burden on businesses, including an expansion of the ATO independent review process for small businesses undergoing an audit and new tax clinics to improve access to tax advice and assistance.

To help small business cash flow, the government will halve the GDP adjustment factor for PAYG and GST instalments to 6% for the 2023–24 income year, a reduction from 12%.

Also, if you’re behind in your tax, now’s the time to catch up. The government is proposing a lodgement penalty amnesty program for businesses with a turnover of less than $10 million. This applies to statements lodged from 1 June 2023 to 31 December 2023 that were originally due from 1 December 2019 to 29 February 2022.

5. Support for your employees

Employees are the lifeblood of any small business, and measures to help them manage living costs will come as welcome news.

The government will extend eligibility for the single parenting payment to support single principal carers with a youngest child under 14 years of age. At the moment, it’s eight years.

The government will also introduce a number of housing measures to increase support for social and affordable housing across the country and improve access for home buyers.

For those employing parents, it’s worth noting that the government has pledged $55.31 billion over four years to make childcare more affordable – these changes will be in force from July.

There’s also help for your people to upskill, including 300,000 new fee-free TAFE places to train Australians in critical and emerging sectors.

The government will provide $5.5 million in 2023–24 to continue supporting negotiations on a long-term skills funding agreement with the states and territories. Subject to the outcome of these negotiations, they’ve kept $3.7 billion up their sleeve for a five-year National Skills Agreement that will commence on 1 January 2024.

6. SME cyber protections and AI

With cyber attacks a growing threat to small businesses, the government will launch a program to train cyber wardens . To learn more about how your business can protect itself against cyber attacks, have a look at this information on My Business.

Meanwhile, the government is giving $101.2 million over five years to support small businesses integrating artificial intelligence (AI) and quantum technologies to improve business processes and increase trade competitiveness.

7. Funding for growth

And finally, for those with an innovative idea to develop, take note of the government’s new support for SMEs and start-ups trying to commercialise their ideas and grow their operations.

The government will provide $431.9 million over four years, including an Industry Growth Program and continuation of the Single Business Service, which supports SMEs in engagement with all levels of government.

https://www.mybusiness.com.au/how-we-help/be-a-better-employer/managing-people/seven-ways-the-budget-impacts-your-business?utm_brand=MB&utm_prodcat=content&utm_prod=article&utm_campaigntype=eng&utm_livedate=20230516&utm_target=nat&utm_campaign=mm_newsletter&utm_medium=edm&utm_source=mb&utm_content=business_7_ways_budget_impacts_you

News on 15 May 2023

ATO crackdown focuses on rental properties, work claims, CGT

https://www.accountantsdaily.com.au/tax-compliance/18535-ato-crackdown-focuses-on-rental-properties-work-claims-cgt

News on 25 Jul 2022

You may have heard of the instant asset write off scheme (IAWO), but you might not know exactly what is the instant asset write off for small businesses and how it actually works.  What’s the purpose of this instant asset write off scheme? As it has been over the last few years, the aim of this scheme is to get cash flowing into the economy and businesses spending while also incentivising the growth of that business.

Now that we live in a post COVID-19 world, the scheme has been expanded in scope and become even more important to aid the recovery of individual businesses like yours, and the economy at large.  “The instant asset write off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure,” Josh Frydenberg, Australian federal government Treasurer.

Instant asset write off for small businesses

The instant asset write off for small business is a handy tax saving scheme available for all Australian small businesses.  Basically, if you’ve bought a core piece of depreciating equipment or other work-related business assets, you can save on your tax bill with a nice offset by making an immediate tax deduction.  The idea behind the scheme is to encourage spending and business growth by incentivising the purchase and installation of work-related equipment for eligible businesses.

How does instant asset write off work?

The instant asset write off scheme works by allowing you to immediately write off the value of a business-related piece of equipment or asset.

• For small businesses with annual turnover between $50 million and $500 million, they can now claim a full deduction for new and second-hand assets valued up to $150,000.

You must be able to prove that the piece of equipment is central to your business and its operation. This is crucial.  Depending on your business, eligible assets for the instant asset write off can include:

• vans, trucks, and vehicles
• tools and trade equipment
• computers and IT equipment
• plant machinery
• coffee machine and kitchen equipment

Many assets don’t qualify for the scheme, and you’ll need to be sure of your purchase before you proceed down this avenue.  From the ATO:

• The asset may be either new or second hand.
• It must be directly linked to your business function.
• You may claim a portion for personal and for business. So, if you use a delivery van for 30% work use and 70% personal use, you can dice it up and claim that 30% portion.
• You may not stockpile. You must have the equipment installed and in use for business purposes by the end of financial year.
• You must be an operational business, not a holding for investment purposes.

How to calculate and how much is instant asset write off?  Fresh changes to the scheme were announced in the 2020 federal budget, so you may not be aware of its current state. The scheme was also extended in the 2021 federal budget.

The instant asset write off has been boosted yet again in the form of ‘temporary full expensing’, which is intended to increase both cash flow and small business investment.

• Until 30 June 2023, businesses with a turnover of up to $5 billion will be able to deduct the full cost of an eligible asset in the first year it’s used or installed.
• SMEs turning over up to $50 million can now apply ‘full expensing’ to all second-hand assets.
• Businesses turning over between $50 million and $500 million can now claim a full deduction for second-hand assets of up to $150,000 in value.

 Who can access the instant asset write off?

Any Australian small business that purchased business related equipment, and complies with the above specifications for eligibility, can utilise the instant asset write off scheme.  Just because you can doesn’t mean you should. Will your business actually benefit from instant asset write off? Perhaps not.  First and foremost, you need to make sure that the purchase will help grow your business.

If your business is in a tenuous position, or the future of your cashflow is in doubt, reconsider your need to purchase assets.

There are several ways in which this tax offset would be of no benefit:

• You’re operating at a loss.
• You don’t really need the equipment as a core part of your operations.
• You don’t have the capital to buy the equipment before any tax benefit kicks in.
• The equipment doesn’t directly contribute to cashflow.

Think seriously about whether you actually need anything. Many businesses don’t. This isn’t a free ticket after all, as you’ll have to stump the initial costs and benefit from the write off later.  You must also make sure your purchase is covered before you proceed. If unsure, speak to an advisor.

How to apply and record instant asset write off?

When approaching the topic of how to apply and record the instant asset write off, get your advisor involved.  Accountants and finance experts excel in this area, and they should be your first port of call before you lay down cash with a view to take advantaging of the scheme.  How to calculate the IAWO scheme from the ATO:

• The whole price of the equipment or asset must be under the threshold ($150,000 for most small businesses).
• The threshold will be calculated as either inclusive or exclusive of GST, depending on whether your business is registered for GST or not.
• To calculate the amount you’re eligible to claim, be sure you first subtract the portion of the equipment you use for private or personal use.
• The remaining balance used for business is your taxable portion.
• Regardless of how much you use for private use and how much the taxable portion is, the entire cost of the asset must still be under the threshold.

Understanding what is and how does the instant asset write off work for small businesses is best understood in conjunction with your advisor. Failing that, be sure to consult the ATO here to come to a full understanding of the instant asset write off scheme.

Should you have any questions, please feel free to contact us.

News on 23 May 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

As part of the 2021 Budget, the Government announced a number of initiatives that are now law and take effect from 1 July 2022. 

 

SG rate will increase to 10.5%

The superannuation guarantee (SG) rate will increase from 10% to 10.5% on 1 July 2022. The SG rate is the minimum amount of super you’re required to pay, by law, on ordinary time earnings. This increase is in line with the Government’s plan to increase the SG rate to 12% by 2025.

Super guarantee percentage

Table 21: Super guarantee percentage

Period	General super guarantee (%)	Super guarantee (%) for Norfolk Island (transitional rate) (from 1 July 2016)
1 July 2020 – 30 June 2021	9.5	5
1 July 2021 – 30 June 2022	10	6
1 July 2022 – 30 June 2023	10.5	7
1 July 2023 – 30 June 2024	11	8
1 July 2024 – 30 June 2025	11.5	9
1 July 2025 – 30 June 2026	12	10
1 July 2026 – 30 June 2027	12	11
1 July 2027 – 30 June 2028 and onwards	12	12

$450 salary threshold for SG contributions removed

From 1 July 2022, the $450 monthly threshold for the payment of SG contributions will be removed. 

This means you’ll be required to make SG contributions to all eligible employees aged 18 years and over, regardless of how much the employee is paid. 

Employees aged under 18 years will be eligible for superannuation if they work more than 30 hours in a week, regardless of how much they’re paid. 

For more information read the ATO’s recent announcement. 

Work test for older Australians removed

From 1 July 2022, employees aged under 75 years will be able to make or receive personal (after tax) and salary-sacrificed contributions without meeting the work conditions – known as the work test or work test exemption. 

The existing contribution cap limits will still apply and employees may also be able to use the bring forward rule. These employees will still need to meet the work test to claim any personal super contribution deductions. 

For more information read the ATO’s acceptance of member contributions and work test webpage.

News on 13 April 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

Pensioners and others receiving eligible government concession holders, will receive a one-off, income tax-exempt payment of $250. This will be paid automatically in April 2022 to eligible recipients.

$450 salary threshold for super contributions removed
From 1 July 2022, the $450 monthly threshold for the payment of superannuation guarantee (SG) contributions will be removed. This means you’ll be required to make SG contributions to all eligible employees, regardless of how much the employee is paid.

For more information read the ATO’s recent announcement.

News on 3 February 2022

NSW small businesses have been thrown a lifeline with a $1 billion support package announced on Sunday by the NSW government.

The state’s peak business organisation, Business NSW, said the package would help a wide variety of businesses that had been hard hit by the Omicron surge. 

The package, which starts February 1, includes: 

• a lump-sum payment of 20% of weekly payroll with a minimum payment of $500 per week and a maximum payment of $5,000 per week. It is for businesses with a turnover between $75,000 and $50 million that suffered a 40% downturn in January and projected to do the same in February. 
• The Small Business Fees and Charges rebate program extended from $2,000 to $3000, and employing businesses will be able to use the rebate to obtain rapid antigen tests (RATs).
• Commercial landlord relief will be extended until 13 March.

News on 17 December 2021

Dear customers, business associates and friends,

My team and I want to thank you for your ongoing support of us in 2021.

Our office will be closed from Friday 17^th December and will be re-opened Monday 10^th January 2022.

My team and I wish you and your family a wonderful festive season and a happy, healthy and prosperous 2022.  We look forward to working for you in 2022.

Regards,

Donny Tsui

Senior Partner

News on 4 November 2021

The Australian Government has announced the full implementation of Modernising Business Registers (MBR) program as part of its Digital Business Plan. As an effect, the government has introduced Director Identification Number (Director ID / DIN) 

 What is a Director Identification Number (DIN)?

The Director Identification Number (director ID) is a unique identifier that a director will apply for once but will stay with a director for life, offering greater identity security. You will need a director identification number (DIN / Director ID) if you’re a director of a company or a corporate trustee of a self-managed super fund (SMSF), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. The objective of this rollout is to create a fairer business environment by helping prevent the use of false and fraudulent director identities. This will go a long way to better identifying and eliminating director involvement in unlawful activity.

How and when to apply for DIN?

Directors will be able to apply for a Director ID from November 2021 on the new Australian Business Registry Services (ABRS) online and log in using the myGovID app to complete the application process. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

Directors will need to apply for their director ID by themselves to verify their identity. No one can apply for it on their behalf.

When will directors need to apply?

Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director. The table below illustrates the same in detail.

How director ID works?

A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with ABRS.

Directors will only ever have one director ID. They’ll keep it forever even if they – change companies, stop being a director, change their name, move interstate or overseas.

Why you need a director ID?

All directors are required by law to verify their identity with ABRS before receiving a director ID.

This is important because it will help to:

• prevent the use of false or fraudulent director identities
• make it easier for external administrators and regulators to trace directors’ relationships with companies over time
• identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

 How can agents assist their impacted clients?

An agent or advisor cannot apply on behalf of the director, but they can still provide assistance to their clients by providing guidance on the verification and application process, including if their client is required to get a director ID.

Agents can support their clients by:

• letting them know about the new requirement, when and how to apply
• encouraging their clients to set up their myGovID to a Standard identity strength, if they have not done so already, and
• guide and support their clients through the process of applying for a Director ID.

How does it affect the current company registration process?

For now, there will be no change to how you register a company with us, hence there is no requirement include the DIN in your company application form or any changes to company forms (484, etc). This will take place in the future as the ABRS builds the new registry platform, and we will keep you up-to-date with any developments during this course.

Should you have any questions, you can talk to your accountant or us to learn more about the MBR program.

News on 7 October 2021

JobSaver now available for charitable not-for-profits (NFPs)
Eligible NFPs can apply for JobSaver if they have experienced a turnover decline of at least 15% and less than 30% because of the public health orders.

The JobSaver program has been extended to charitable NFP organisations that have experienced a turnover decline of at least 15% and less than 30% as a result of the public health orders.

NFPs are eligible for this program if they are charitable and their primary purpose, under Australian Charities and Not-for-profits Commission (ACNC) classifications, is to:

• advance social or public welfare (including disability and health social support services), or
• prevent or relieve the suffering of animals (for example, animal welfare organisations).

For more information about eligibility for charitable NFP organisations that have experienced the required decline in turnover.

News on 15 July 2021

Government support micro and small business during lockdown The Australian and NSW Governments announced new measures

New measures to support small businesses during the current NSW lockdown were announced yesterday. These include: Increased small business support payments of $7,500 and $10,500 or $15,000, depending on the decline in business turnover A “JobSaver” employee retention scheme providing cashflow support to businesses to help them retain staff. The cash boost will be up to 40% of weekly payroll with a payment of between $1,500 to a maximum of $10,000 per week, provided staffing levels are maintained at the level as of 13 July 2021. Non-employing businesses are eligible for $1,000 p/w $1,500 grants per fortnight for microbusinesses (annual turnover between $30,000 and $75,000) that have suffered at least a 30% decline in turnover. Payroll tax deferrals for all businesses and a 25% concession for medium-sized businesses that have suffered a 30% revenue decline A requirement on landlords to participate in mediation before taking actions to evict or lock out tenants Up to 100% land tax concessions for commercial landlords who provide rent relief A $75 million support package for the performing arts sector to be administered by Create NSW A support package for the accommodation sector worth $26 million An increase in the payment amount for stood down workers from $500 to $600 per week for those who lost more than 20 hours, and to $375 for those who lost between 8 and 20 hours, and for it to be available to workers outside of the Greater Sydney lockdown areas Expanded mental health services with programs targeted at young people and CALD communities

News on 29 June 2021

Small businesses urged to pay attention to key areas and act now in EOFY tax planning

Dear customers and business associates,

The end of financial year is only a few days away.  There are some last minute tips for your tax planning:-

• Super guarantee (SG): SG contributions must be paid by 30 June 2021 to qualify for a tax deduction in the 2020–21 financial year. The superannuation fund must receive these contributions by 30 June. He said some clearing houses can take more than a week to submit the payment to the super fund, so it would be advisable to ensure that superannuation is paid by mid-June where possible.

• Temporary full expensing (previously known as the instant asset write-off): Policies have been expanded again in the last two federal budgets as part of the government’s COVID-19 initiative to encourage business spending to improve cash flow. There is now no limit to the amount a small business can write off under this concession and, unlike larger businesses, small businesses with aggregated turnover less than $50 million receive a full write-off for secondhand assets. While the May 2021 federal budget extended the concession all the way up until 30 June 2023, there is still a timing advantage where claims can be made in 2020–21.

• Loss carry-back: Another concession introduced in the October 2020 federal budget and extended for a further 12 months in the May 2021 Budget, this concession allows a company (i.e. not available to partnerships, trusts or individuals) to “carry back” tax losses incurred in any of the 2019–2020, 2020–21, 2021–22 and 2022–23 income years to an earlier year as far back as 2018–19. A refund could be claimed on lodgement of tax returns from the 2020–2021 year onwards, representing the tax saving that would have arisen if the tax loss had been available to claim in the earlier year.

• Small business CGT concessions: Those operating a small business may be eligible for these concessions on the sale of business assets by a company or on the sale of shares in a company carrying on a business. The concessions may be available where aggregated turnover is less than $2 million or total net assets (excluding the family home and superannuation fund balances) less than $6 million, although the eligibility rules are quite strict, having been tightened significantly in recent years.

• Income deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June. Income from the payments won’t be taxed until the following financial year.

Should you have any queries, please contact us.

News on 21 June 2021

Minimum wage to increase by 2.5%

Following the Annual Wage Review 2021, the Fair Work Commission has announced a 2.5% increase to minimum wages. This will also apply to all award wages, with the award increase happening in 3 different stages.

You don’t need to do anything now. We will let you know when the new minimum wages are available in our pay tools.

See our Annual Wage Review 2021 page for more information.

News on 3 June 2021

Super Guarantee rate rising 1 July

On 1 July 2021, the super guarantee rate will rise from 9.5% to 10%. If you have employees, you will need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate.

If you need help to work out how much super you need to pay for your employees after 1 July, you can use our super guarantee contributions calculator.

It’s important you pay your workers the correct amount of super. Our superannuation guarantee eligibility decision tool will help you determine if your employees are eligible for super, including any contractors treated as employees for super purposes.

The super rate is scheduled to progressively increase to 12% by July 2025. You can find the scheduled rate increases and dates on our website.

News on 13 May 2021

Australian Federal Budget 2021-22

On 11 May 2021, the Government handed down the 2021/22 Federal Budget. Whilst this marked a return to the traditional timing of the budgetary processes, the content of the 2021/22 Budget continues to remind us that our economy and way of life has still not returned to full normality post the events of COVID-19. 

Highlights

Personal income tax

• Retaining LAMITO (Low And Middle Income Tax Offset) in the 2021-22 income year.
• Modernising the individual tax residency rules – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
• Reducing compliance costs for individuals claiming self-education expense deductions.
• Medicare levy thresholds for 2020-21.

Business owners

• Temporary full expensing extension until 30 Jun 2023.
• Temporary loss carry-back extension.
• Digital Economy Strategy — self-assessing the effective life of intangible depreciating assets.
• Addressing Workforce Shortages in Key Areas — JobTrainer Fund — extension.
• Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion.
• Getting Vulnerable Australians Back into Work — additional support for job seekers.
• SME Recovery Loan Scheme.
• Employee Share Schemes — removing cessation of employment as a taxing point and reducing red tape.
• Patent Box — tax concession for Australian medical and biotechnology innovations.

Superannuation

• First Home Super Saver Scheme — increasing the maximum releasable amount to $50,000.
• First Home Super Saver Scheme — technical changes.
• Reducing the eligibility age for downsizer contributions.
• Repealing the work test for voluntary superannuation contributions.
• Removing the $450 per month threshold for superannuation guarantee eligibility.
• Early release for victims of family and domestic violence.
• Legacy retirement product conversions.
• SMSFs — relaxing residency requirements.
• Transfer of superannuation to the KiwiSaver Scheme.

Not-for-profits and philanthropy

• Not-for-profits — enhancing the transparency of income tax exemptions.
• Philanthropy — updates to the list of specifically listed deductible gift recipients.

Child care

• Child care subsidy.
• Other measures.

Social security

• Increasing the Flexibility of the Pension Loans Scheme.
• Enhancing Welfare Integrity Arrangements.
• Increased support for unemployed Australians.

Aged care

• Whole-of-government response to Royal Commission into Aged Care Quality and Safety.

News on 3 Feb 2021

Businesses can get $10k a year for each new employee, says ATO

Businesses could potentially receive up to more than $10,000 over a year for each eligible additional employee hired, says Australian Taxation Office deputy commissioner James O’Halloran.

Contact us for more details.

News on 25 Jan 2021

Dear customers, business associates and friends,

We would like to inform you that we will be moving to our new office which is 210/2 Pembroke Street, Epping 2121 on 26 Jan 2021.

In fact, it is only a minute on foot away from our previous office.  Below please find the map showing how to go from our old office to the new office for your reference.

Please drop by to have a cup of coffee if you are in the area.

Should you have any questions, please contact us.

Yours faithfully,

Donny Tsui

News on 18 Dec 2020

Dear customers, friends and business associates,

As this challenging year draws to a close, we trust that some of the difficulties of the last 12 months are now behind all of us.  We would like to express our sincerest appreciation for your support throughout 2020.

We hope we were able to assist you. This year end means the beginning of a new one with new possibilities and we are dedicated to continuing to help you reach your goals in 2021.

From all of us at D & I Accounting, we want to say a big thank you for being an invaluable part of our business and wish you a Merry Christmas and a bigger and better year ahead.

Our office will close on Friday, 18 December 2020 and return on Monday, 4 January 2021. 

Regards,

Donny Tsui

News on 12 Dec 2020

Businesses will now be able to register for the JobMaker Hiring Credit scheme ahead of the first quarterly claim period starting in February next year.

Under the scheme, eligible businesses can access the payment for up to 12 months for each eligible additional employee they hire between 7 October 2020 and 6 October 2021, and will be able to claim up to $200 a week for each additional eligible employee they hire aged 16 to 29 years, and up to $100 a week for those aged 30 to 35 years.

Employees need to have completed a minimum average of 20 hours (worked or paid) per week during the time they were employed in the JobMaker period.

ATO Deputy Commissioner James O’Halloran said the ATO is working hard to make it as easy as possible for employers to access the government’s JobMaker Hiring Credit payment.

He also encouraged businesses to check their eligibility and take this first step to register for the scheme from this week and then employers will be ready to move to quickly make a claim in February 2021, as they cannot claim if they are not registered.

“We encourage employers to register from now to ensure their hiring credits can be paid promptly from when the first quarterly claim period opens in February 2021,” Mr O’Halloran said.

“Employers are reminded that new employees must have received the Parenting Payment, Youth Allowance (Other) or JobSeeker Payment for at least 28 consecutive days (or two fortnights) within the 84 days (or six fortnights) of being hired to allow for a claim to be made by the employer.

“There are some key dates to keep in mind, and simple steps employers can take now, but please remember that not everything needs to be done from next week.”

The federal government established the JobMaker Hiring Credit payment to help accelerate growth in the employment of young people during the COVID-19 economic recovery.

News on 7 Oct 2020

Federal Budget 2020-2021

Tax cuts, more incentives for business investment and payments for pensioners and aged care: tonight’s Federal Budget was a wide-ranging fiscal program to cushion the impact of the Covid-19 pandemic and kickstart an economic recovery.

WINNERS

Taxpayers 

Key to the government’s strategy is to put money in the pockets of taxpayers in the hope they will boost spending and the resulting demand will help lift the economy out of recession. 

To that end, more than 11 million taxpayers will receive a tax cut backdated to July 1 this year.

Stage Two of the legislated tax cuts will be brought forward by two years, lifting the 19 per cent threshold from $A37,000 to $A45,000, and the 32.5 per cent threshold from $A90,000 to $A120,000. 

This would result in a tax relief of up to $A2745 for singles, and up to $A5490 for dual income families compared with 2017-18. 

Established businesses

The budget includes a range of measures designed to encourage established businesses to spend on plant and equipment, invest in research and development, and also hire or retain workers. 

The Instant Asset Write Off for businesses will be extended to businesses with a turnover of up to $A5 billion and will be further extended until June 2022. 

There is also relief for businesses which have been “doing it tough” during the pandemic, with a measure which will enable them to use their losses earlier. 

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018/19 financial year. 

To encourage businesses to hire younger Australians, the government has announced a new program called JobMaker, which will contribute $A200 per week, payable for one year, towards the hiring of people aged 16-35 who are currently on JobSeeker. 

The payment for those aged 30-35 is $A100 per week. 

The government estimates that the combination of the immediate expensing of capital expenditure and loss carry-back measures will create an additional 50,000 jobs nationally. 

For R&D, the budget removes the cap on refunds and lifts the rate. 

Apprentices 

In vocational training, the budget commits an additional $A1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them. 

Infrastructure projects

In keeping with its plan to boost jobs, the budget expands the government’s 10-year infrastructure pipeline, bringing to $A14 billion the new and accelerated infrastructure projects which would support an estimated 40,000 new jobs. 

The projects span the nation, and include major road upgrades in several states and rail projects in Victoria and Western Australia, and new bridges in Tasmania and the ACT. 

An additional $A2 billion is also earmarked for road safety upgrades. 

According to Frydenberg, “Funding for these shovel-ready projects will be provided on a use it or lose it basis. If a state drags its feet, another state will get the money. We need works to start, not stall.” 

Pensioners

Aged pensioners will receive an additional $A250 payment from December and a further $A250 payment from March next year. 

There is also a package for senior Australians who wish to continue living in their own homes, with $A1.6 billion earmarked for an additional 23,000 home care packages, bringing the total to 180,000 places. 

Manufacturing

As the pandemic has exposed issues in Australia’s globally reliant supply chain, the focus has switched back to manufacturing for national resilience as well as job creation.

The budget includes a $A1.3 billion Modern Manufacturing plan to target six key industries, from food and beverage manufacturing to renewable energy and the space industry. 

Regional Australia

While much of the national focus has been on the pandemic, regional Australia is still suffering the economic impact of the drought and bushfires. 

The budget includes $A2 billion in concessional loans for farmers, and $A2 billion for water infrastructure projects across the country to expand the national water grid. 

$A350 million has been allocated to support regional tourism, while $A317 million is earmarked for exporters to continue to access global supply chains.  

The NDIS and mental health services 

The budget includes an additional $A3.9 billion for the National Disability Insurance Service, with the Treasurer assuring “every Australian” that the NDIS would “always be fully funded” under a coalition government. 

The budget also doubles the number of Medicare psychological services funded through the Better Access Initiative from 10 to 20. 

First home buyers 

As telegraphed before the budget, the government announced an additional 10,000 places for first home buyers of new homes under the First Home Loan Deposit Scheme. 

The budget also includes an additional $A1 billion in low cost finance for the construction of affordable housing, and $A150 million in the Indigenous Home Ownership Program for new homes in regional areas. 

Women in STEM and female entrepreneurs 

Recognising that women have made up the majority of those who lost their jobs during the pandemic, the Budget includes the government’s second Women’s Economic Security Statement, with $A240 million in programs and support. 

These focus on new cadetships and apprenticeships for women in science, technology, engineering and mathematics, job creation and entrepreneurialism. 

LOSERS

Long-term or older unemployed 

While these people received a $A550 fortnightly coronavirus supplement to their JobSeeker payments in March, this has been cut to $A250 and is scheduled to end by December 31. 

The budget makes no mention of whether this supplement will be continued or if JobSeeker will be increased on a permanent basis, and there are no targeted programs for unemployed people older than 35. 

Self-funded retirees 

Already struggling due to record low interest rates, which have crimped the returns from the term deposits many of them rely on, this group – who do not get the aged pension – receive nothing in the budget. 

New businesses 

While there are incentives for existing businesses, the instant asset write off is the main measure which new businesses can take advantage of. 

There are no specific incentives or programs to encourage start-ups and new businesses. 

“CPA Australia is disappointed that the budget does not include any specific assistance for those new to business. These entrepreneurs also need help to survive having already missed out on JobKeeper, the Cash Flow Boost and several state government grants,” says Ord. 

News on 1 Oct 2020

Due to the ongoing COVID-19 pandemic and the impact on Australian businesses, the Federal Government extended JobKeeper until March 2021 for qualifying businesses. The extension affects the way you need to process Jobkeeper in your software. Here’s a summary of the key changes:

Extension 1: 28 September 2020 to 3 January 2021

• Tier 1: Full time employees $1,200 per fortnight 
• Tier 2: Part time employees $750 per fortnight 

Extension 2: 4 January 2021 to 28 March 2021

• Tier 1: Full time employees $1,000 per fortnight 
• Tier 2: Part time employees $650 per fortnight 

Your employees will either be a JobKeeper Tier 1 employee or a JobKeeper Tier 2 employee. This is determined by how many hours they worked in the month before becoming eligible for JobKeeper. It is an employer’s responsibility to determine the JobKeeper tier.

News on 23 May 2020

Instant asset write-off for eligible businesses

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.

Changes from 12 March 2020

From 12 March 2020 until 30 June 2020 the instant asset write-off:

• threshold amount for each asset is $150,000 (up from $30,000)
• eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

For more information, you can visit https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/

News on 30 March 2020

Federal Stimulus Package – JobKeeper Payment

In case you haven’t heard, the federal government has announced a JobKeeper Subsidy Payment to assist businesses which are struggling to retain their employees due to the impacts of COVID-19.

To summarise:

• Details:
  • This is a temporary subsidy open to businesses impacted by COVID-19
  • The government will provide $1,500 per fortnight per employee for up to 6 months
• Eligible Businesses:
  • Business turnover less than $1 billion & business will experience more than 30% reduction compared to a year ago; or
  • Business turnover more than $1 billion & business will experience more than 50% reduction compared to a year ago.
  • Employee must have been employed as at 1 March 2020 & currently employed (incl. those stood down or re-hired)
• Timing:
  • First payments to be received in the first week of May

If you are interested in applying for this concession, please register your interest at: https://www.ato.gov.au/general/gen/JobKeeper-payment/ or alternatively please contact our office to register for your business.

News on 18 January 2020

Federal Stimulus Package Info

During these times, a few key areas that is likely to be applicable to you are:

1.      Increasing the instant asset write off to immediately deduct purchases of eligible assets costing less than $150k (including new and second hand assets purchased from 12 March 2020 to 30 June 2020).

2.      Business investment allowance which includes a 50% accelerated depreciation rate on new assets acquired after 12 March 2020 or installed by 30 June 2021.

3.      Boosting Cash Flow for Employers – Eligible businesses (aggregated turnover under $50m) that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. When you lodge the Mar 2020 BAS, ATO will credit the integrated client account to provide this benefit. This cash flow assistance is available for PAYG withholding lodgements for the months of March, April, May and June 2020.

News on 13 January 2020

Government announces coronavirus stimulus package
The government has announced a range of measures to support the economy, business and employment in the face of the coronavirus health crisis. The measures include the below.

Cash Flow Boost for employers – employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment of $2,000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a payment equal to 50 per cent of taxes withheld from employees’ salary and wages up to $25,000. 

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

The payment will be delivered as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Increasing the instant asset write off – the government is proposing to increase the threshold for the instant asset write off from $30,000 to $150,000 and expand access to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available from 12 March to 30 June 2020 for new or second-hand assets first used or installed ready for use by 30 June 2020.

Accelerated deprecation – the government is proposing an accelerated deprecation deduction for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50 per cent of the cost of the eligible asset on installation, with existing depreciation rules applying to the balance. Eligible businesses are those with an aggregated turnover below $500 million. Eligible assets are those that can depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is plant, equipment and specified intangible assets, such as patents), but does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Apprentice and trainee wage subsidy – the government will offer employers a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage from 1 January to 30 September 2020, capped at $7000 each quarter per each eligible apprentice or trainee. Businesses with less than 20 full-time staff will be eligible, however employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.

Direct payment to individuals – the government will make a one-off payment of $750 to around 6.5 million social security, veterans and other income support recipients and eligible concession card holders residing in Australia.

Should you need further details, you can visit Treasury website.

https://treasury.gov.au/coronavirus?utm_source=exacttarget&utm_medium=email&utm_term=All%20Subscribers&utm_content=https%3a%2f%2ftreasury.gov.au%2fcoronavirus&utm_campaign=CPA+Tax+News+ed+9+-+12+March+2020_12-March-2020

News on 8 December 2019

Wishing you a Merry Christmas and a Happy New Year!
Please be advised that our office will close on Wednesday 18 December 2019 and re-open on Monday 13 January 2020.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 1 July 2019

Single Touch Payroll (STP) is a new way for employers to report tax and super information to the ATO. It starts from 1 July 2019 for employers with 19 or less employees.
You’ll report the following information through an STP ready solution – such as payroll software:
	payments to employees such as salaries and wages pay as you go (PAYG) withholding super information.
The way you pay your employees won’t change, however you will be sending us this information each time you pay them.
Start reporting any time from 1 July to 30 September 2019. If you can’t start reporting by this time, you’ll need to apply for a later start date. An online tool to help you do this will be available on our website in April.
How to get started
	If you already use payroll software – check to see if it offers STP reporting by talking to your software provider or viewing their website. If you don’t use payroll software – you can choose an STP ready solution or talk to your tax professional for advice on the best solution for your business. If you use a registered tax or BAS agent – you can ask them to report through an STP ready payroll solution on your behalf. If you have 1-4 employees – you can choose a low-cost STP solution. Find out more at ato.gov.au/STPsolutions

News on 23 September 2016

Tax cuts – withholding amounts changed

16 September 2016

The Australian Government has increased the 32.5% tax threshold from $37,001 – $80,000 to $37,001 – $87,000.

What does this mean for employers?

The tax tables have changed for employees who earn over $80,000.

You need to download the updated tax tables from ato.gov.au/taxtables or contact your payroll software provider for the relevant update.

Do employers need to make any other adjustments?

The new tax tables are effective from 1 October 2016. You don’t need to make any other adjustments or refunds as we will refund any over-payment of tax when your employees (and payees) lodge their 2016-17 income tax return.

News on 02 June 2016

Give yourself an EOFY check-up

1. Consult your accountant – now

The first big mistake many businesses make is failing to truly engage with their accountant or financial advisor. This interaction should go beyond mere compliance and tax return submissions to include growth and cash-flow strategies, according to Peter Langham, chief executive officer of business finance specialist Scottish Pacific. He believes owners of small and medium-sized entities, in particular, often focus on their work in the business at the expense of working on the business strategy. “So they can miss opportunities,” Langham says.

2. Take advantage of a $20,000 asset write-off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. Alex Duonis, ‎principal, tax consulting at business advisory firm Crowe Horwath Australia, says the accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. He warns, though, that it applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1000. “So there’s quite an opportunity now to get that accelerated deduction,” Duonis says.

3. Maximise any other deductions

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June.

4. Write off bad debts

Ensure you write off any bad debts and prepare minutes documenting the debts and all efforts you have made to recover them, otherwise they cannot be claimed as deductions. This action also enables adjustments for any GST charged on the invoice. Langham says the key is to act now rather than waiting a few months until you do your tax return. “Do it before 30 June and look at your sales ledger and any possible delinquent accounts and make sure you provide for them in this financial year,” he says.

5. Comply with your superannuation requirements

Getting organised on the superannuation front is a must. Duonis notes that super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. “This is a good way of reducing your income tax bill,” he says.Duonis says business owners should also consider making concessional contributions into their super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over. The June 30 deadline is also approaching for employers with 19 or fewer employees to be using Super Stream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using Super Stream.

6. Understand how to manage cash flow

Langham urges business owners to start the new financial year in a healthy cash position. This means reviewing your cash-management processes and adopting the most appropriate funding solutions.

“It’s a good time of year to plan for the business’s future and make sure that all appropriate steps are taken in terms of managing cash flow,” he says.

A common error, Langham observes, is injecting too much cash into superannuation to take advantage of tax breaks while not appreciating the potential impact on the business’s cash flow. Then the business can feel the pinch on 1 July.

“We see a lot of businesses that do their planning, spend the money and then realise their cash flow doesn’t support their strategy,” Langham says.

7. Check your trust obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June. Duonis says this is normally done by way of a distribution minute that may specify distributions on a percentage basis without dollar amounts being specified. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

“So clients who have those sorts of entities ought to be talking to their accountants now about where income goes this year,” Duonis says.

8. Consider any capital gains tax benefits

If your business has made a capital gain in the current financial year, it makes sense to assess the presence of any other capital losses that may offset those gains. For example, you could include selling assets that have incurred a capital loss.

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

Duonis warns that any changes have to be of a genuine business restructure, not a move simply to get tax benefits.

“The bill didn’t get a lot of publicity, but it provides more opportunities for businesses to change their structure without tax charges.”

Words by Cameron Cooper

The articles represent the views of the authors and not necessarily that of the Bank. They are only intended as a general guide and do not represent tax advice you should seek independent professional tax or financial advice before acting on any matters set out in the articles.

– See more at: https://businessfocus.westpacgroup.com.au/blog/2016/may/18/give-yourself-an-eofy-check-up/#sthash.t67trzER.dpuf

02 February 2016

What’s new for small business?

Instant asset write-off – simpler depreciation rules

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

This deduction can be used for each asset that costs less than $20,000, whether new or second-hand. The deduction is claimed through a tax return, in the year the asset was first used or installed ready for use.

From 1 July 2017, the threshold will return to $1,000.

Accelerated depreciation for primary producers

From 12 May 2015, primary producers can immediately deduct the costs of:

• fencing, which were previously deducted over a period up to 30 years
• water facilities, previously deducted over three years.

They can also deduct the cost of fodder storage assets over three years, instead of over a period up to 50 years.

Primary producers who are small businesses are also eligible to claim the instant asset write-off until 30 June 2017.

Deductions for professional expenses for start-ups

From 1 July 2015, small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice and government fees and charges.

Small business restructure roll-over (capital gains tax roll-over relief)

In the 2015 Budget, the government announced that it will allow small businesses to change the legal structure of their business without attracting a capital gains tax (CGT) liability at that point.

The exposure draft legislation included a possible extension of the relief to transfers of trading stock, revenue assets and depreciating assets. If passed, these changes will apply to asset transfers that occur on or after 1 July 2016.

The proposed changes are not yet law.

Fringe benefits tax changes for work-related devices

From 1 April 2016, small businesses will not incur a fringe benefits tax (FBT) liability if they provide their employees multiple work-related portable electronic devices that have similar functions. These include devices that are primarily used for work, such as laptops, tablets, calculators, GPS navigation receivers and mobile phones.

This benefit may be in addition to or part of the employee’s salary or wages package.

Small business income tax offset

From the 2015–16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

• net small business income from sole trading activities, and/or
• share of net small business income from a partnership or trust.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Company tax cut for small businesses

For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%.

The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.

23 December 2015

Wishing you a Merry Christmas and a Happy New Year.
Please be advised that our office will close Thursday 24 December 2015 at 12 noon and re-open Tuesday 5 January 2016 at 9 am.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 1 November 2023

ATO flags small business tax debt, SG as target areas

Addressing collectable debt and improving small business tax performance continue to be critical focus areas, the ATO warns in its annual report.

The ATO says addressing collectable debt, improving small business tax performance and strengthening superannuation guarantee (SG) will be important focus areas in its strategy for the remainder of FY24.

In its annual report for 2022–23, the Tax Office said small business collectable debt reached $50.2 billion at 30 June 2023, an 89 per cent increase from 30 June 2019.

“It’s our responsibility to ensure a level playing field as we support businesses who are doing the right thing and paying on time,” Commissioner of Taxation Chris Jordan stated in the report.

Mr Jordan said the ATO has already taken strong and deliberate action against those unwilling to work with the Tax Office as it increased its activities across debt collection.

While small business currently had the largest proportion of the collectable debt book, Mr Jordan said the ATO remained focused on non or late payment in every payment group in the tax system.

“We want to encourage a culture of paying tax on time and in full,” he said.

In its annual report, the ATO said it informed clients of their obligations and the actions the regulator might take if they chose not to engage with the Tax Office.

htps://www.accountantsdaily.com.au/tax-compliance/19225-ato-flags-small-business-tax-debt-sg-as-target-areas?utm_source=Accountants%20Daily&utm_campaign=27_10_23&utm_medium=email&utm_content=3&utm_emailID=f9f4f4745b319abd4bd6b5168c9a8e9bb8666cb4c8d8276e26dafa709defa52e

News on 18 May 2023

SEVEN WAYS THE BUDGET IMPACTS YOUR BUSINESS

Energy costs, asset write-offs, and cyber security were just some areas targeting small-business owners in Tuesday night’s budget.

Tuesday night’s (9 May) Federal Budget contained some recognition of the pressure small businesses have been under. And hopefully, it means help is on its way.

“We know economic conditions have been challenging for Australia’s small businesses, which is why the budget delivers this support,” said the Minister for Small Business, Julie Collins.

“[The budget] provides targeted, responsible support, improves the overall business operating environment, and helps to reduce energy price pressures.”

From staffing to operating costs to cyber security, here are some ways the budget will impact your small business.

1. Write off asset changes

Businesses that need new equipment, computers, furniture, cars, or other assets can benefit from changes to the instant asset write-off threshold to $20,000 from 1 July 2023 until 30 June 2024.

That means if your business has a turnover of less than $10 million, you’ll be able to immediately deduct assets costing less than $20,000, provided they’re first used or installed between 1 July 2023 and 30 June 2024. It will be applied on a per-asset basis, so you can write off multiple assets.

This is a watered-down version of previous measures introduced during the pandemic.

2. Lower power bills

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state, so check here for more information. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

Meanwhile, as announced shortly before the budget, small and medium businesses can claim deductions of up to $20,000 when they install energy-efficient equipment, such as electrifying their heating and cooling systems and installing batteries and heat pumps.

Try our free energy comparison tool. Your business could compare, switch and save with our free energy comparison service.

3. Big changes to super payments

Meanwhile, businesses need to be on top of payroll with big changes on the way.

Gone are quarterly super payments – from 1 July 2026, they’ll have to be paid at the same time as wages. This will enable employees to track their entitlements to ensure they are being paid on time and in full.

Also, the Australian Taxation Office (ATO) will receive funding to upgrade its data capabilities and design a new compliance system, which will identify underpaid super in real time.

For help with payroll and other aspects of managing your people, have a look at My Business Workplace.

4. Reducing business admin and helping lower tax

Those drowning in paperwork should note that from 1 July 2024, small businesses will be permitted to authorise their tax agent to lodge multiple single touch payroll forms on their behalf. And from 1 July 2025, small businesses will be permitted up to four years to amend their income tax returns.

There are also measures designed to help lower the tax-related administrative burden on businesses, including an expansion of the ATO independent review process for small businesses undergoing an audit and new tax clinics to improve access to tax advice and assistance.

To help small business cash flow, the government will halve the GDP adjustment factor for PAYG and GST instalments to 6% for the 2023–24 income year, a reduction from 12%.

Also, if you’re behind in your tax, now’s the time to catch up. The government is proposing a lodgement penalty amnesty program for businesses with a turnover of less than $10 million. This applies to statements lodged from 1 June 2023 to 31 December 2023 that were originally due from 1 December 2019 to 29 February 2022.

5. Support for your employees

Employees are the lifeblood of any small business, and measures to help them manage living costs will come as welcome news.

The government will extend eligibility for the single parenting payment to support single principal carers with a youngest child under 14 years of age. At the moment, it’s eight years.

The government will also introduce a number of housing measures to increase support for social and affordable housing across the country and improve access for home buyers.

For those employing parents, it’s worth noting that the government has pledged $55.31 billion over four years to make childcare more affordable – these changes will be in force from July.

There’s also help for your people to upskill, including 300,000 new fee-free TAFE places to train Australians in critical and emerging sectors.

The government will provide $5.5 million in 2023–24 to continue supporting negotiations on a long-term skills funding agreement with the states and territories. Subject to the outcome of these negotiations, they’ve kept $3.7 billion up their sleeve for a five-year National Skills Agreement that will commence on 1 January 2024.

6. SME cyber protections and AI

With cyber attacks a growing threat to small businesses, the government will launch a program to train cyber wardens . To learn more about how your business can protect itself against cyber attacks, have a look at this information on My Business.

Meanwhile, the government is giving $101.2 million over five years to support small businesses integrating artificial intelligence (AI) and quantum technologies to improve business processes and increase trade competitiveness.

7. Funding for growth

And finally, for those with an innovative idea to develop, take note of the government’s new support for SMEs and start-ups trying to commercialise their ideas and grow their operations.

The government will provide $431.9 million over four years, including an Industry Growth Program and continuation of the Single Business Service, which supports SMEs in engagement with all levels of government.

https://www.mybusiness.com.au/how-we-help/be-a-better-employer/managing-people/seven-ways-the-budget-impacts-your-business?utm_brand=MB&utm_prodcat=content&utm_prod=article&utm_campaigntype=eng&utm_livedate=20230516&utm_target=nat&utm_campaign=mm_newsletter&utm_medium=edm&utm_source=mb&utm_content=business_7_ways_budget_impacts_you

News on 15 May 2023

ATO crackdown focuses on rental properties, work claims, CGT

https://www.accountantsdaily.com.au/tax-compliance/18535-ato-crackdown-focuses-on-rental-properties-work-claims-cgt

News on 25 Jul 2022

You may have heard of the instant asset write off scheme (IAWO), but you might not know exactly what is the instant asset write off for small businesses and how it actually works.  What’s the purpose of this instant asset write off scheme? As it has been over the last few years, the aim of this scheme is to get cash flowing into the economy and businesses spending while also incentivising the growth of that business.

Now that we live in a post COVID-19 world, the scheme has been expanded in scope and become even more important to aid the recovery of individual businesses like yours, and the economy at large.  “The instant asset write off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure,” Josh Frydenberg, Australian federal government Treasurer.

Instant asset write off for small businesses

The instant asset write off for small business is a handy tax saving scheme available for all Australian small businesses.  Basically, if you’ve bought a core piece of depreciating equipment or other work-related business assets, you can save on your tax bill with a nice offset by making an immediate tax deduction.  The idea behind the scheme is to encourage spending and business growth by incentivising the purchase and installation of work-related equipment for eligible businesses.

How does instant asset write off work?

The instant asset write off scheme works by allowing you to immediately write off the value of a business-related piece of equipment or asset.

• For small businesses with annual turnover between $50 million and $500 million, they can now claim a full deduction for new and second-hand assets valued up to $150,000.

You must be able to prove that the piece of equipment is central to your business and its operation. This is crucial.  Depending on your business, eligible assets for the instant asset write off can include:

• vans, trucks, and vehicles
• tools and trade equipment
• computers and IT equipment
• plant machinery
• coffee machine and kitchen equipment

Many assets don’t qualify for the scheme, and you’ll need to be sure of your purchase before you proceed down this avenue.  From the ATO:

• The asset may be either new or second hand.
• It must be directly linked to your business function.
• You may claim a portion for personal and for business. So, if you use a delivery van for 30% work use and 70% personal use, you can dice it up and claim that 30% portion.
• You may not stockpile. You must have the equipment installed and in use for business purposes by the end of financial year.
• You must be an operational business, not a holding for investment purposes.

How to calculate and how much is instant asset write off?  Fresh changes to the scheme were announced in the 2020 federal budget, so you may not be aware of its current state. The scheme was also extended in the 2021 federal budget.

The instant asset write off has been boosted yet again in the form of ‘temporary full expensing’, which is intended to increase both cash flow and small business investment.

• Until 30 June 2023, businesses with a turnover of up to $5 billion will be able to deduct the full cost of an eligible asset in the first year it’s used or installed.
• SMEs turning over up to $50 million can now apply ‘full expensing’ to all second-hand assets.
• Businesses turning over between $50 million and $500 million can now claim a full deduction for second-hand assets of up to $150,000 in value.

 Who can access the instant asset write off?

Any Australian small business that purchased business related equipment, and complies with the above specifications for eligibility, can utilise the instant asset write off scheme.  Just because you can doesn’t mean you should. Will your business actually benefit from instant asset write off? Perhaps not.  First and foremost, you need to make sure that the purchase will help grow your business.

If your business is in a tenuous position, or the future of your cashflow is in doubt, reconsider your need to purchase assets.

There are several ways in which this tax offset would be of no benefit:

• You’re operating at a loss.
• You don’t really need the equipment as a core part of your operations.
• You don’t have the capital to buy the equipment before any tax benefit kicks in.
• The equipment doesn’t directly contribute to cashflow.

Think seriously about whether you actually need anything. Many businesses don’t. This isn’t a free ticket after all, as you’ll have to stump the initial costs and benefit from the write off later.  You must also make sure your purchase is covered before you proceed. If unsure, speak to an advisor.

How to apply and record instant asset write off?

When approaching the topic of how to apply and record the instant asset write off, get your advisor involved.  Accountants and finance experts excel in this area, and they should be your first port of call before you lay down cash with a view to take advantaging of the scheme.  How to calculate the IAWO scheme from the ATO:

• The whole price of the equipment or asset must be under the threshold ($150,000 for most small businesses).
• The threshold will be calculated as either inclusive or exclusive of GST, depending on whether your business is registered for GST or not.
• To calculate the amount you’re eligible to claim, be sure you first subtract the portion of the equipment you use for private or personal use.
• The remaining balance used for business is your taxable portion.
• Regardless of how much you use for private use and how much the taxable portion is, the entire cost of the asset must still be under the threshold.

Understanding what is and how does the instant asset write off work for small businesses is best understood in conjunction with your advisor. Failing that, be sure to consult the ATO here to come to a full understanding of the instant asset write off scheme.

Should you have any questions, please feel free to contact us.

News on 23 May 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

As part of the 2021 Budget, the Government announced a number of initiatives that are now law and take effect from 1 July 2022. 

 

SG rate will increase to 10.5%

The superannuation guarantee (SG) rate will increase from 10% to 10.5% on 1 July 2022. The SG rate is the minimum amount of super you’re required to pay, by law, on ordinary time earnings. This increase is in line with the Government’s plan to increase the SG rate to 12% by 2025.

Super guarantee percentage

Table 21: Super guarantee percentage

Period	General super guarantee (%)	Super guarantee (%) for Norfolk Island (transitional rate) (from 1 July 2016)
1 July 2020 – 30 June 2021	9.5	5
1 July 2021 – 30 June 2022	10	6
1 July 2022 – 30 June 2023	10.5	7
1 July 2023 – 30 June 2024	11	8
1 July 2024 – 30 June 2025	11.5	9
1 July 2025 – 30 June 2026	12	10
1 July 2026 – 30 June 2027	12	11
1 July 2027 – 30 June 2028 and onwards	12	12

$450 salary threshold for SG contributions removed

From 1 July 2022, the $450 monthly threshold for the payment of SG contributions will be removed. 

This means you’ll be required to make SG contributions to all eligible employees aged 18 years and over, regardless of how much the employee is paid. 

Employees aged under 18 years will be eligible for superannuation if they work more than 30 hours in a week, regardless of how much they’re paid. 

For more information read the ATO’s recent announcement. 

Work test for older Australians removed

From 1 July 2022, employees aged under 75 years will be able to make or receive personal (after tax) and salary-sacrificed contributions without meeting the work conditions – known as the work test or work test exemption. 

The existing contribution cap limits will still apply and employees may also be able to use the bring forward rule. These employees will still need to meet the work test to claim any personal super contribution deductions. 

For more information read the ATO’s acceptance of member contributions and work test webpage.

News on 13 April 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

Pensioners and others receiving eligible government concession holders, will receive a one-off, income tax-exempt payment of $250. This will be paid automatically in April 2022 to eligible recipients.

$450 salary threshold for super contributions removed
From 1 July 2022, the $450 monthly threshold for the payment of superannuation guarantee (SG) contributions will be removed. This means you’ll be required to make SG contributions to all eligible employees, regardless of how much the employee is paid.

For more information read the ATO’s recent announcement.

News on 3 February 2022

NSW small businesses have been thrown a lifeline with a $1 billion support package announced on Sunday by the NSW government.

The state’s peak business organisation, Business NSW, said the package would help a wide variety of businesses that had been hard hit by the Omicron surge. 

The package, which starts February 1, includes: 

• a lump-sum payment of 20% of weekly payroll with a minimum payment of $500 per week and a maximum payment of $5,000 per week. It is for businesses with a turnover between $75,000 and $50 million that suffered a 40% downturn in January and projected to do the same in February. 
• The Small Business Fees and Charges rebate program extended from $2,000 to $3000, and employing businesses will be able to use the rebate to obtain rapid antigen tests (RATs).
• Commercial landlord relief will be extended until 13 March.

News on 17 December 2021

Dear customers, business associates and friends,

My team and I want to thank you for your ongoing support of us in 2021.

Our office will be closed from Friday 17^th December and will be re-opened Monday 10^th January 2022.

My team and I wish you and your family a wonderful festive season and a happy, healthy and prosperous 2022.  We look forward to working for you in 2022.

Regards,

Donny Tsui

Senior Partner

News on 4 November 2021

The Australian Government has announced the full implementation of Modernising Business Registers (MBR) program as part of its Digital Business Plan. As an effect, the government has introduced Director Identification Number (Director ID / DIN) 

 What is a Director Identification Number (DIN)?

The Director Identification Number (director ID) is a unique identifier that a director will apply for once but will stay with a director for life, offering greater identity security. You will need a director identification number (DIN / Director ID) if you’re a director of a company or a corporate trustee of a self-managed super fund (SMSF), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. The objective of this rollout is to create a fairer business environment by helping prevent the use of false and fraudulent director identities. This will go a long way to better identifying and eliminating director involvement in unlawful activity.

How and when to apply for DIN?

Directors will be able to apply for a Director ID from November 2021 on the new Australian Business Registry Services (ABRS) online and log in using the myGovID app to complete the application process. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

Directors will need to apply for their director ID by themselves to verify their identity. No one can apply for it on their behalf.

When will directors need to apply?

Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director. The table below illustrates the same in detail.

How director ID works?

A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with ABRS.

Directors will only ever have one director ID. They’ll keep it forever even if they – change companies, stop being a director, change their name, move interstate or overseas.

Why you need a director ID?

All directors are required by law to verify their identity with ABRS before receiving a director ID.

This is important because it will help to:

• prevent the use of false or fraudulent director identities
• make it easier for external administrators and regulators to trace directors’ relationships with companies over time
• identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

 How can agents assist their impacted clients?

An agent or advisor cannot apply on behalf of the director, but they can still provide assistance to their clients by providing guidance on the verification and application process, including if their client is required to get a director ID.

Agents can support their clients by:

• letting them know about the new requirement, when and how to apply
• encouraging their clients to set up their myGovID to a Standard identity strength, if they have not done so already, and
• guide and support their clients through the process of applying for a Director ID.

How does it affect the current company registration process?

For now, there will be no change to how you register a company with us, hence there is no requirement include the DIN in your company application form or any changes to company forms (484, etc). This will take place in the future as the ABRS builds the new registry platform, and we will keep you up-to-date with any developments during this course.

Should you have any questions, you can talk to your accountant or us to learn more about the MBR program.

News on 7 October 2021

JobSaver now available for charitable not-for-profits (NFPs)
Eligible NFPs can apply for JobSaver if they have experienced a turnover decline of at least 15% and less than 30% because of the public health orders.

The JobSaver program has been extended to charitable NFP organisations that have experienced a turnover decline of at least 15% and less than 30% as a result of the public health orders.

NFPs are eligible for this program if they are charitable and their primary purpose, under Australian Charities and Not-for-profits Commission (ACNC) classifications, is to:

• advance social or public welfare (including disability and health social support services), or
• prevent or relieve the suffering of animals (for example, animal welfare organisations).

For more information about eligibility for charitable NFP organisations that have experienced the required decline in turnover.

News on 15 July 2021

Government support micro and small business during lockdown The Australian and NSW Governments announced new measures

New measures to support small businesses during the current NSW lockdown were announced yesterday. These include: Increased small business support payments of $7,500 and $10,500 or $15,000, depending on the decline in business turnover A “JobSaver” employee retention scheme providing cashflow support to businesses to help them retain staff. The cash boost will be up to 40% of weekly payroll with a payment of between $1,500 to a maximum of $10,000 per week, provided staffing levels are maintained at the level as of 13 July 2021. Non-employing businesses are eligible for $1,000 p/w $1,500 grants per fortnight for microbusinesses (annual turnover between $30,000 and $75,000) that have suffered at least a 30% decline in turnover. Payroll tax deferrals for all businesses and a 25% concession for medium-sized businesses that have suffered a 30% revenue decline A requirement on landlords to participate in mediation before taking actions to evict or lock out tenants Up to 100% land tax concessions for commercial landlords who provide rent relief A $75 million support package for the performing arts sector to be administered by Create NSW A support package for the accommodation sector worth $26 million An increase in the payment amount for stood down workers from $500 to $600 per week for those who lost more than 20 hours, and to $375 for those who lost between 8 and 20 hours, and for it to be available to workers outside of the Greater Sydney lockdown areas Expanded mental health services with programs targeted at young people and CALD communities

News on 29 June 2021

Small businesses urged to pay attention to key areas and act now in EOFY tax planning

Dear customers and business associates,

The end of financial year is only a few days away.  There are some last minute tips for your tax planning:-

• Super guarantee (SG): SG contributions must be paid by 30 June 2021 to qualify for a tax deduction in the 2020–21 financial year. The superannuation fund must receive these contributions by 30 June. He said some clearing houses can take more than a week to submit the payment to the super fund, so it would be advisable to ensure that superannuation is paid by mid-June where possible.

• Temporary full expensing (previously known as the instant asset write-off): Policies have been expanded again in the last two federal budgets as part of the government’s COVID-19 initiative to encourage business spending to improve cash flow. There is now no limit to the amount a small business can write off under this concession and, unlike larger businesses, small businesses with aggregated turnover less than $50 million receive a full write-off for secondhand assets. While the May 2021 federal budget extended the concession all the way up until 30 June 2023, there is still a timing advantage where claims can be made in 2020–21.

• Loss carry-back: Another concession introduced in the October 2020 federal budget and extended for a further 12 months in the May 2021 Budget, this concession allows a company (i.e. not available to partnerships, trusts or individuals) to “carry back” tax losses incurred in any of the 2019–2020, 2020–21, 2021–22 and 2022–23 income years to an earlier year as far back as 2018–19. A refund could be claimed on lodgement of tax returns from the 2020–2021 year onwards, representing the tax saving that would have arisen if the tax loss had been available to claim in the earlier year.

• Small business CGT concessions: Those operating a small business may be eligible for these concessions on the sale of business assets by a company or on the sale of shares in a company carrying on a business. The concessions may be available where aggregated turnover is less than $2 million or total net assets (excluding the family home and superannuation fund balances) less than $6 million, although the eligibility rules are quite strict, having been tightened significantly in recent years.

• Income deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June. Income from the payments won’t be taxed until the following financial year.

Should you have any queries, please contact us.

News on 21 June 2021

Minimum wage to increase by 2.5%

Following the Annual Wage Review 2021, the Fair Work Commission has announced a 2.5% increase to minimum wages. This will also apply to all award wages, with the award increase happening in 3 different stages.

You don’t need to do anything now. We will let you know when the new minimum wages are available in our pay tools.

See our Annual Wage Review 2021 page for more information.

News on 3 June 2021

Super Guarantee rate rising 1 July

On 1 July 2021, the super guarantee rate will rise from 9.5% to 10%. If you have employees, you will need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate.

If you need help to work out how much super you need to pay for your employees after 1 July, you can use our super guarantee contributions calculator.

It’s important you pay your workers the correct amount of super. Our superannuation guarantee eligibility decision tool will help you determine if your employees are eligible for super, including any contractors treated as employees for super purposes.

The super rate is scheduled to progressively increase to 12% by July 2025. You can find the scheduled rate increases and dates on our website.

News on 13 May 2021

Australian Federal Budget 2021-22

On 11 May 2021, the Government handed down the 2021/22 Federal Budget. Whilst this marked a return to the traditional timing of the budgetary processes, the content of the 2021/22 Budget continues to remind us that our economy and way of life has still not returned to full normality post the events of COVID-19. 

Highlights

Personal income tax

• Retaining LAMITO (Low And Middle Income Tax Offset) in the 2021-22 income year.
• Modernising the individual tax residency rules – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
• Reducing compliance costs for individuals claiming self-education expense deductions.
• Medicare levy thresholds for 2020-21.

Business owners

• Temporary full expensing extension until 30 Jun 2023.
• Temporary loss carry-back extension.
• Digital Economy Strategy — self-assessing the effective life of intangible depreciating assets.
• Addressing Workforce Shortages in Key Areas — JobTrainer Fund — extension.
• Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion.
• Getting Vulnerable Australians Back into Work — additional support for job seekers.
• SME Recovery Loan Scheme.
• Employee Share Schemes — removing cessation of employment as a taxing point and reducing red tape.
• Patent Box — tax concession for Australian medical and biotechnology innovations.

Superannuation

• First Home Super Saver Scheme — increasing the maximum releasable amount to $50,000.
• First Home Super Saver Scheme — technical changes.
• Reducing the eligibility age for downsizer contributions.
• Repealing the work test for voluntary superannuation contributions.
• Removing the $450 per month threshold for superannuation guarantee eligibility.
• Early release for victims of family and domestic violence.
• Legacy retirement product conversions.
• SMSFs — relaxing residency requirements.
• Transfer of superannuation to the KiwiSaver Scheme.

Not-for-profits and philanthropy

• Not-for-profits — enhancing the transparency of income tax exemptions.
• Philanthropy — updates to the list of specifically listed deductible gift recipients.

Child care

• Child care subsidy.
• Other measures.

Social security

• Increasing the Flexibility of the Pension Loans Scheme.
• Enhancing Welfare Integrity Arrangements.
• Increased support for unemployed Australians.

Aged care

• Whole-of-government response to Royal Commission into Aged Care Quality and Safety.

News on 3 Feb 2021

Businesses can get $10k a year for each new employee, says ATO

Businesses could potentially receive up to more than $10,000 over a year for each eligible additional employee hired, says Australian Taxation Office deputy commissioner James O’Halloran.

Contact us for more details.

News on 25 Jan 2021

Dear customers, business associates and friends,

We would like to inform you that we will be moving to our new office which is 210/2 Pembroke Street, Epping 2121 on 26 Jan 2021.

In fact, it is only a minute on foot away from our previous office.  Below please find the map showing how to go from our old office to the new office for your reference.

Please drop by to have a cup of coffee if you are in the area.

Should you have any questions, please contact us.

Yours faithfully,

Donny Tsui

News on 18 Dec 2020

Dear customers, friends and business associates,

As this challenging year draws to a close, we trust that some of the difficulties of the last 12 months are now behind all of us.  We would like to express our sincerest appreciation for your support throughout 2020.

We hope we were able to assist you. This year end means the beginning of a new one with new possibilities and we are dedicated to continuing to help you reach your goals in 2021.

From all of us at D & I Accounting, we want to say a big thank you for being an invaluable part of our business and wish you a Merry Christmas and a bigger and better year ahead.

Our office will close on Friday, 18 December 2020 and return on Monday, 4 January 2021. 

Regards,

Donny Tsui

News on 12 Dec 2020

Businesses will now be able to register for the JobMaker Hiring Credit scheme ahead of the first quarterly claim period starting in February next year.

Under the scheme, eligible businesses can access the payment for up to 12 months for each eligible additional employee they hire between 7 October 2020 and 6 October 2021, and will be able to claim up to $200 a week for each additional eligible employee they hire aged 16 to 29 years, and up to $100 a week for those aged 30 to 35 years.

Employees need to have completed a minimum average of 20 hours (worked or paid) per week during the time they were employed in the JobMaker period.

ATO Deputy Commissioner James O’Halloran said the ATO is working hard to make it as easy as possible for employers to access the government’s JobMaker Hiring Credit payment.

He also encouraged businesses to check their eligibility and take this first step to register for the scheme from this week and then employers will be ready to move to quickly make a claim in February 2021, as they cannot claim if they are not registered.

“We encourage employers to register from now to ensure their hiring credits can be paid promptly from when the first quarterly claim period opens in February 2021,” Mr O’Halloran said.

“Employers are reminded that new employees must have received the Parenting Payment, Youth Allowance (Other) or JobSeeker Payment for at least 28 consecutive days (or two fortnights) within the 84 days (or six fortnights) of being hired to allow for a claim to be made by the employer.

“There are some key dates to keep in mind, and simple steps employers can take now, but please remember that not everything needs to be done from next week.”

The federal government established the JobMaker Hiring Credit payment to help accelerate growth in the employment of young people during the COVID-19 economic recovery.

News on 7 Oct 2020

Federal Budget 2020-2021

Tax cuts, more incentives for business investment and payments for pensioners and aged care: tonight’s Federal Budget was a wide-ranging fiscal program to cushion the impact of the Covid-19 pandemic and kickstart an economic recovery.

WINNERS

Taxpayers 

Key to the government’s strategy is to put money in the pockets of taxpayers in the hope they will boost spending and the resulting demand will help lift the economy out of recession. 

To that end, more than 11 million taxpayers will receive a tax cut backdated to July 1 this year.

Stage Two of the legislated tax cuts will be brought forward by two years, lifting the 19 per cent threshold from $A37,000 to $A45,000, and the 32.5 per cent threshold from $A90,000 to $A120,000. 

This would result in a tax relief of up to $A2745 for singles, and up to $A5490 for dual income families compared with 2017-18. 

Established businesses

The budget includes a range of measures designed to encourage established businesses to spend on plant and equipment, invest in research and development, and also hire or retain workers. 

The Instant Asset Write Off for businesses will be extended to businesses with a turnover of up to $A5 billion and will be further extended until June 2022. 

There is also relief for businesses which have been “doing it tough” during the pandemic, with a measure which will enable them to use their losses earlier. 

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018/19 financial year. 

To encourage businesses to hire younger Australians, the government has announced a new program called JobMaker, which will contribute $A200 per week, payable for one year, towards the hiring of people aged 16-35 who are currently on JobSeeker. 

The payment for those aged 30-35 is $A100 per week. 

The government estimates that the combination of the immediate expensing of capital expenditure and loss carry-back measures will create an additional 50,000 jobs nationally. 

For R&D, the budget removes the cap on refunds and lifts the rate. 

Apprentices 

In vocational training, the budget commits an additional $A1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them. 

Infrastructure projects

In keeping with its plan to boost jobs, the budget expands the government’s 10-year infrastructure pipeline, bringing to $A14 billion the new and accelerated infrastructure projects which would support an estimated 40,000 new jobs. 

The projects span the nation, and include major road upgrades in several states and rail projects in Victoria and Western Australia, and new bridges in Tasmania and the ACT. 

An additional $A2 billion is also earmarked for road safety upgrades. 

According to Frydenberg, “Funding for these shovel-ready projects will be provided on a use it or lose it basis. If a state drags its feet, another state will get the money. We need works to start, not stall.” 

Pensioners

Aged pensioners will receive an additional $A250 payment from December and a further $A250 payment from March next year. 

There is also a package for senior Australians who wish to continue living in their own homes, with $A1.6 billion earmarked for an additional 23,000 home care packages, bringing the total to 180,000 places. 

Manufacturing

As the pandemic has exposed issues in Australia’s globally reliant supply chain, the focus has switched back to manufacturing for national resilience as well as job creation.

The budget includes a $A1.3 billion Modern Manufacturing plan to target six key industries, from food and beverage manufacturing to renewable energy and the space industry. 

Regional Australia

While much of the national focus has been on the pandemic, regional Australia is still suffering the economic impact of the drought and bushfires. 

The budget includes $A2 billion in concessional loans for farmers, and $A2 billion for water infrastructure projects across the country to expand the national water grid. 

$A350 million has been allocated to support regional tourism, while $A317 million is earmarked for exporters to continue to access global supply chains.  

The NDIS and mental health services 

The budget includes an additional $A3.9 billion for the National Disability Insurance Service, with the Treasurer assuring “every Australian” that the NDIS would “always be fully funded” under a coalition government. 

The budget also doubles the number of Medicare psychological services funded through the Better Access Initiative from 10 to 20. 

First home buyers 

As telegraphed before the budget, the government announced an additional 10,000 places for first home buyers of new homes under the First Home Loan Deposit Scheme. 

The budget also includes an additional $A1 billion in low cost finance for the construction of affordable housing, and $A150 million in the Indigenous Home Ownership Program for new homes in regional areas. 

Women in STEM and female entrepreneurs 

Recognising that women have made up the majority of those who lost their jobs during the pandemic, the Budget includes the government’s second Women’s Economic Security Statement, with $A240 million in programs and support. 

These focus on new cadetships and apprenticeships for women in science, technology, engineering and mathematics, job creation and entrepreneurialism. 

LOSERS

Long-term or older unemployed 

While these people received a $A550 fortnightly coronavirus supplement to their JobSeeker payments in March, this has been cut to $A250 and is scheduled to end by December 31. 

The budget makes no mention of whether this supplement will be continued or if JobSeeker will be increased on a permanent basis, and there are no targeted programs for unemployed people older than 35. 

Self-funded retirees 

Already struggling due to record low interest rates, which have crimped the returns from the term deposits many of them rely on, this group – who do not get the aged pension – receive nothing in the budget. 

New businesses 

While there are incentives for existing businesses, the instant asset write off is the main measure which new businesses can take advantage of. 

There are no specific incentives or programs to encourage start-ups and new businesses. 

“CPA Australia is disappointed that the budget does not include any specific assistance for those new to business. These entrepreneurs also need help to survive having already missed out on JobKeeper, the Cash Flow Boost and several state government grants,” says Ord. 

News on 1 Oct 2020

Due to the ongoing COVID-19 pandemic and the impact on Australian businesses, the Federal Government extended JobKeeper until March 2021 for qualifying businesses. The extension affects the way you need to process Jobkeeper in your software. Here’s a summary of the key changes:

Extension 1: 28 September 2020 to 3 January 2021

• Tier 1: Full time employees $1,200 per fortnight 
• Tier 2: Part time employees $750 per fortnight 

Extension 2: 4 January 2021 to 28 March 2021

• Tier 1: Full time employees $1,000 per fortnight 
• Tier 2: Part time employees $650 per fortnight 

Your employees will either be a JobKeeper Tier 1 employee or a JobKeeper Tier 2 employee. This is determined by how many hours they worked in the month before becoming eligible for JobKeeper. It is an employer’s responsibility to determine the JobKeeper tier.

News on 23 May 2020

Instant asset write-off for eligible businesses

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.

Changes from 12 March 2020

From 12 March 2020 until 30 June 2020 the instant asset write-off:

• threshold amount for each asset is $150,000 (up from $30,000)
• eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

For more information, you can visit https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/

News on 30 March 2020

Federal Stimulus Package – JobKeeper Payment

In case you haven’t heard, the federal government has announced a JobKeeper Subsidy Payment to assist businesses which are struggling to retain their employees due to the impacts of COVID-19.

To summarise:

• Details:
  • This is a temporary subsidy open to businesses impacted by COVID-19
  • The government will provide $1,500 per fortnight per employee for up to 6 months
• Eligible Businesses:
  • Business turnover less than $1 billion & business will experience more than 30% reduction compared to a year ago; or
  • Business turnover more than $1 billion & business will experience more than 50% reduction compared to a year ago.
  • Employee must have been employed as at 1 March 2020 & currently employed (incl. those stood down or re-hired)
• Timing:
  • First payments to be received in the first week of May

If you are interested in applying for this concession, please register your interest at: https://www.ato.gov.au/general/gen/JobKeeper-payment/ or alternatively please contact our office to register for your business.

News on 18 January 2020

Federal Stimulus Package Info

During these times, a few key areas that is likely to be applicable to you are:

1.      Increasing the instant asset write off to immediately deduct purchases of eligible assets costing less than $150k (including new and second hand assets purchased from 12 March 2020 to 30 June 2020).

2.      Business investment allowance which includes a 50% accelerated depreciation rate on new assets acquired after 12 March 2020 or installed by 30 June 2021.

3.      Boosting Cash Flow for Employers – Eligible businesses (aggregated turnover under $50m) that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. When you lodge the Mar 2020 BAS, ATO will credit the integrated client account to provide this benefit. This cash flow assistance is available for PAYG withholding lodgements for the months of March, April, May and June 2020.

News on 13 January 2020

Government announces coronavirus stimulus package
The government has announced a range of measures to support the economy, business and employment in the face of the coronavirus health crisis. The measures include the below.

Cash Flow Boost for employers – employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment of $2,000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a payment equal to 50 per cent of taxes withheld from employees’ salary and wages up to $25,000. 

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

The payment will be delivered as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Increasing the instant asset write off – the government is proposing to increase the threshold for the instant asset write off from $30,000 to $150,000 and expand access to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available from 12 March to 30 June 2020 for new or second-hand assets first used or installed ready for use by 30 June 2020.

Accelerated deprecation – the government is proposing an accelerated deprecation deduction for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50 per cent of the cost of the eligible asset on installation, with existing depreciation rules applying to the balance. Eligible businesses are those with an aggregated turnover below $500 million. Eligible assets are those that can depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is plant, equipment and specified intangible assets, such as patents), but does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Apprentice and trainee wage subsidy – the government will offer employers a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage from 1 January to 30 September 2020, capped at $7000 each quarter per each eligible apprentice or trainee. Businesses with less than 20 full-time staff will be eligible, however employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.

Direct payment to individuals – the government will make a one-off payment of $750 to around 6.5 million social security, veterans and other income support recipients and eligible concession card holders residing in Australia.

Should you need further details, you can visit Treasury website.

https://treasury.gov.au/coronavirus?utm_source=exacttarget&utm_medium=email&utm_term=All%20Subscribers&utm_content=https%3a%2f%2ftreasury.gov.au%2fcoronavirus&utm_campaign=CPA+Tax+News+ed+9+-+12+March+2020_12-March-2020

News on 8 December 2019

Wishing you a Merry Christmas and a Happy New Year!
Please be advised that our office will close on Wednesday 18 December 2019 and re-open on Monday 13 January 2020.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 1 July 2019

Single Touch Payroll (STP) is a new way for employers to report tax and super information to the ATO. It starts from 1 July 2019 for employers with 19 or less employees.
You’ll report the following information through an STP ready solution – such as payroll software:
	payments to employees such as salaries and wages pay as you go (PAYG) withholding super information.
The way you pay your employees won’t change, however you will be sending us this information each time you pay them.
Start reporting any time from 1 July to 30 September 2019. If you can’t start reporting by this time, you’ll need to apply for a later start date. An online tool to help you do this will be available on our website in April.
How to get started
	If you already use payroll software – check to see if it offers STP reporting by talking to your software provider or viewing their website. If you don’t use payroll software – you can choose an STP ready solution or talk to your tax professional for advice on the best solution for your business. If you use a registered tax or BAS agent – you can ask them to report through an STP ready payroll solution on your behalf. If you have 1-4 employees – you can choose a low-cost STP solution. Find out more at ato.gov.au/STPsolutions

News on 23 September 2016

Tax cuts – withholding amounts changed

16 September 2016

The Australian Government has increased the 32.5% tax threshold from $37,001 – $80,000 to $37,001 – $87,000.

What does this mean for employers?

The tax tables have changed for employees who earn over $80,000.

You need to download the updated tax tables from ato.gov.au/taxtables or contact your payroll software provider for the relevant update.

Do employers need to make any other adjustments?

The new tax tables are effective from 1 October 2016. You don’t need to make any other adjustments or refunds as we will refund any over-payment of tax when your employees (and payees) lodge their 2016-17 income tax return.

News on 02 June 2016

Give yourself an EOFY check-up

1. Consult your accountant – now

The first big mistake many businesses make is failing to truly engage with their accountant or financial advisor. This interaction should go beyond mere compliance and tax return submissions to include growth and cash-flow strategies, according to Peter Langham, chief executive officer of business finance specialist Scottish Pacific. He believes owners of small and medium-sized entities, in particular, often focus on their work in the business at the expense of working on the business strategy. “So they can miss opportunities,” Langham says.

2. Take advantage of a $20,000 asset write-off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. Alex Duonis, ‎principal, tax consulting at business advisory firm Crowe Horwath Australia, says the accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. He warns, though, that it applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1000. “So there’s quite an opportunity now to get that accelerated deduction,” Duonis says.

3. Maximise any other deductions

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June.

4. Write off bad debts

Ensure you write off any bad debts and prepare minutes documenting the debts and all efforts you have made to recover them, otherwise they cannot be claimed as deductions. This action also enables adjustments for any GST charged on the invoice. Langham says the key is to act now rather than waiting a few months until you do your tax return. “Do it before 30 June and look at your sales ledger and any possible delinquent accounts and make sure you provide for them in this financial year,” he says.

5. Comply with your superannuation requirements

Getting organised on the superannuation front is a must. Duonis notes that super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. “This is a good way of reducing your income tax bill,” he says.Duonis says business owners should also consider making concessional contributions into their super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over. The June 30 deadline is also approaching for employers with 19 or fewer employees to be using Super Stream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using Super Stream.

6. Understand how to manage cash flow

Langham urges business owners to start the new financial year in a healthy cash position. This means reviewing your cash-management processes and adopting the most appropriate funding solutions.

“It’s a good time of year to plan for the business’s future and make sure that all appropriate steps are taken in terms of managing cash flow,” he says.

A common error, Langham observes, is injecting too much cash into superannuation to take advantage of tax breaks while not appreciating the potential impact on the business’s cash flow. Then the business can feel the pinch on 1 July.

“We see a lot of businesses that do their planning, spend the money and then realise their cash flow doesn’t support their strategy,” Langham says.

7. Check your trust obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June. Duonis says this is normally done by way of a distribution minute that may specify distributions on a percentage basis without dollar amounts being specified. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

“So clients who have those sorts of entities ought to be talking to their accountants now about where income goes this year,” Duonis says.

8. Consider any capital gains tax benefits

If your business has made a capital gain in the current financial year, it makes sense to assess the presence of any other capital losses that may offset those gains. For example, you could include selling assets that have incurred a capital loss.

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

Duonis warns that any changes have to be of a genuine business restructure, not a move simply to get tax benefits.

“The bill didn’t get a lot of publicity, but it provides more opportunities for businesses to change their structure without tax charges.”

Words by Cameron Cooper

The articles represent the views of the authors and not necessarily that of the Bank. They are only intended as a general guide and do not represent tax advice you should seek independent professional tax or financial advice before acting on any matters set out in the articles.

– See more at: https://businessfocus.westpacgroup.com.au/blog/2016/may/18/give-yourself-an-eofy-check-up/#sthash.t67trzER.dpuf

02 February 2016

What’s new for small business?

Instant asset write-off – simpler depreciation rules

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

This deduction can be used for each asset that costs less than $20,000, whether new or second-hand. The deduction is claimed through a tax return, in the year the asset was first used or installed ready for use.

From 1 July 2017, the threshold will return to $1,000.

Accelerated depreciation for primary producers

From 12 May 2015, primary producers can immediately deduct the costs of:

• fencing, which were previously deducted over a period up to 30 years
• water facilities, previously deducted over three years.

They can also deduct the cost of fodder storage assets over three years, instead of over a period up to 50 years.

Primary producers who are small businesses are also eligible to claim the instant asset write-off until 30 June 2017.

Deductions for professional expenses for start-ups

From 1 July 2015, small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice and government fees and charges.

Small business restructure roll-over (capital gains tax roll-over relief)

In the 2015 Budget, the government announced that it will allow small businesses to change the legal structure of their business without attracting a capital gains tax (CGT) liability at that point.

The exposure draft legislation included a possible extension of the relief to transfers of trading stock, revenue assets and depreciating assets. If passed, these changes will apply to asset transfers that occur on or after 1 July 2016.

The proposed changes are not yet law.

Fringe benefits tax changes for work-related devices

From 1 April 2016, small businesses will not incur a fringe benefits tax (FBT) liability if they provide their employees multiple work-related portable electronic devices that have similar functions. These include devices that are primarily used for work, such as laptops, tablets, calculators, GPS navigation receivers and mobile phones.

This benefit may be in addition to or part of the employee’s salary or wages package.

Small business income tax offset

From the 2015–16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

• net small business income from sole trading activities, and/or
• share of net small business income from a partnership or trust.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Company tax cut for small businesses

For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%.

The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.

23 December 2015

Wishing you a Merry Christmas and a Happy New Year.
Please be advised that our office will close Thursday 24 December 2015 at 12 noon and re-open Tuesday 5 January 2016 at 9 am.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 18 May 2023

SEVEN WAYS THE BUDGET IMPACTS YOUR BUSINESS

Energy costs, asset write-offs, and cyber security were just some areas targeting small-business owners in Tuesday night’s budget.

Tuesday night’s (9 May) Federal Budget contained some recognition of the pressure small businesses have been under. And hopefully, it means help is on its way.

“We know economic conditions have been challenging for Australia’s small businesses, which is why the budget delivers this support,” said the Minister for Small Business, Julie Collins.

“[The budget] provides targeted, responsible support, improves the overall business operating environment, and helps to reduce energy price pressures.”

From staffing to operating costs to cyber security, here are some ways the budget will impact your small business.

1. Write off asset changes

Businesses that need new equipment, computers, furniture, cars, or other assets can benefit from changes to the instant asset write-off threshold to $20,000 from 1 July 2023 until 30 June 2024.

That means if your business has a turnover of less than $10 million, you’ll be able to immediately deduct assets costing less than $20,000, provided they’re first used or installed between 1 July 2023 and 30 June 2024. It will be applied on a per-asset basis, so you can write off multiple assets.

This is a watered-down version of previous measures introduced during the pandemic.

2. Lower power bills

With soaring power bills contributing significantly to business operating costs, $650 in bill relief is on its way from July.

The total amount of bill relief will vary by state, so check here for more information. To be eligible, your business must be on a separately metered business tariff with your electricity retailer – so if you run a business from home, you probably won’t qualify.

Meanwhile, as announced shortly before the budget, small and medium businesses can claim deductions of up to $20,000 when they install energy-efficient equipment, such as electrifying their heating and cooling systems and installing batteries and heat pumps.

Try our free energy comparison tool. Your business could compare, switch and save with our free energy comparison service.

3. Big changes to super payments

Meanwhile, businesses need to be on top of payroll with big changes on the way.

Gone are quarterly super payments – from 1 July 2026, they’ll have to be paid at the same time as wages. This will enable employees to track their entitlements to ensure they are being paid on time and in full.

Also, the Australian Taxation Office (ATO) will receive funding to upgrade its data capabilities and design a new compliance system, which will identify underpaid super in real time.

For help with payroll and other aspects of managing your people, have a look at My Business Workplace.

4. Reducing business admin and helping lower tax

Those drowning in paperwork should note that from 1 July 2024, small businesses will be permitted to authorise their tax agent to lodge multiple single touch payroll forms on their behalf. And from 1 July 2025, small businesses will be permitted up to four years to amend their income tax returns.

There are also measures designed to help lower the tax-related administrative burden on businesses, including an expansion of the ATO independent review process for small businesses undergoing an audit and new tax clinics to improve access to tax advice and assistance.

To help small business cash flow, the government will halve the GDP adjustment factor for PAYG and GST instalments to 6% for the 2023–24 income year, a reduction from 12%.

Also, if you’re behind in your tax, now’s the time to catch up. The government is proposing a lodgement penalty amnesty program for businesses with a turnover of less than $10 million. This applies to statements lodged from 1 June 2023 to 31 December 2023 that were originally due from 1 December 2019 to 29 February 2022.

5. Support for your employees

Employees are the lifeblood of any small business, and measures to help them manage living costs will come as welcome news.

The government will extend eligibility for the single parenting payment to support single principal carers with a youngest child under 14 years of age. At the moment, it’s eight years.

The government will also introduce a number of housing measures to increase support for social and affordable housing across the country and improve access for home buyers.

For those employing parents, it’s worth noting that the government has pledged $55.31 billion over four years to make childcare more affordable – these changes will be in force from July.

There’s also help for your people to upskill, including 300,000 new fee-free TAFE places to train Australians in critical and emerging sectors.

The government will provide $5.5 million in 2023–24 to continue supporting negotiations on a long-term skills funding agreement with the states and territories. Subject to the outcome of these negotiations, they’ve kept $3.7 billion up their sleeve for a five-year National Skills Agreement that will commence on 1 January 2024.

6. SME cyber protections and AI

With cyber attacks a growing threat to small businesses, the government will launch a program to train cyber wardens . To learn more about how your business can protect itself against cyber attacks, have a look at this information on My Business.

Meanwhile, the government is giving $101.2 million over five years to support small businesses integrating artificial intelligence (AI) and quantum technologies to improve business processes and increase trade competitiveness.

7. Funding for growth

And finally, for those with an innovative idea to develop, take note of the government’s new support for SMEs and start-ups trying to commercialise their ideas and grow their operations.

The government will provide $431.9 million over four years, including an Industry Growth Program and continuation of the Single Business Service, which supports SMEs in engagement with all levels of government.

https://www.mybusiness.com.au/how-we-help/be-a-better-employer/managing-people/seven-ways-the-budget-impacts-your-business?utm_brand=MB&utm_prodcat=content&utm_prod=article&utm_campaigntype=eng&utm_livedate=20230516&utm_target=nat&utm_campaign=mm_newsletter&utm_medium=edm&utm_source=mb&utm_content=business_7_ways_budget_impacts_you

News on 15 May 2023

ATO crackdown focuses on rental properties, work claims, CGT

https://www.accountantsdaily.com.au/tax-compliance/18535-ato-crackdown-focuses-on-rental-properties-work-claims-cgt

News on 25 Jul 2022

You may have heard of the instant asset write off scheme (IAWO), but you might not know exactly what is the instant asset write off for small businesses and how it actually works.  What’s the purpose of this instant asset write off scheme? As it has been over the last few years, the aim of this scheme is to get cash flowing into the economy and businesses spending while also incentivising the growth of that business.

Now that we live in a post COVID-19 world, the scheme has been expanded in scope and become even more important to aid the recovery of individual businesses like yours, and the economy at large.  “The instant asset write off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure,” Josh Frydenberg, Australian federal government Treasurer.

Instant asset write off for small businesses

The instant asset write off for small business is a handy tax saving scheme available for all Australian small businesses.  Basically, if you’ve bought a core piece of depreciating equipment or other work-related business assets, you can save on your tax bill with a nice offset by making an immediate tax deduction.  The idea behind the scheme is to encourage spending and business growth by incentivising the purchase and installation of work-related equipment for eligible businesses.

How does instant asset write off work?

The instant asset write off scheme works by allowing you to immediately write off the value of a business-related piece of equipment or asset.

• For small businesses with annual turnover between $50 million and $500 million, they can now claim a full deduction for new and second-hand assets valued up to $150,000.

You must be able to prove that the piece of equipment is central to your business and its operation. This is crucial.  Depending on your business, eligible assets for the instant asset write off can include:

• vans, trucks, and vehicles
• tools and trade equipment
• computers and IT equipment
• plant machinery
• coffee machine and kitchen equipment

Many assets don’t qualify for the scheme, and you’ll need to be sure of your purchase before you proceed down this avenue.  From the ATO:

• The asset may be either new or second hand.
• It must be directly linked to your business function.
• You may claim a portion for personal and for business. So, if you use a delivery van for 30% work use and 70% personal use, you can dice it up and claim that 30% portion.
• You may not stockpile. You must have the equipment installed and in use for business purposes by the end of financial year.
• You must be an operational business, not a holding for investment purposes.

How to calculate and how much is instant asset write off?  Fresh changes to the scheme were announced in the 2020 federal budget, so you may not be aware of its current state. The scheme was also extended in the 2021 federal budget.

The instant asset write off has been boosted yet again in the form of ‘temporary full expensing’, which is intended to increase both cash flow and small business investment.

• Until 30 June 2023, businesses with a turnover of up to $5 billion will be able to deduct the full cost of an eligible asset in the first year it’s used or installed.
• SMEs turning over up to $50 million can now apply ‘full expensing’ to all second-hand assets.
• Businesses turning over between $50 million and $500 million can now claim a full deduction for second-hand assets of up to $150,000 in value.

 Who can access the instant asset write off?

Any Australian small business that purchased business related equipment, and complies with the above specifications for eligibility, can utilise the instant asset write off scheme.  Just because you can doesn’t mean you should. Will your business actually benefit from instant asset write off? Perhaps not.  First and foremost, you need to make sure that the purchase will help grow your business.

If your business is in a tenuous position, or the future of your cashflow is in doubt, reconsider your need to purchase assets.

There are several ways in which this tax offset would be of no benefit:

• You’re operating at a loss.
• You don’t really need the equipment as a core part of your operations.
• You don’t have the capital to buy the equipment before any tax benefit kicks in.
• The equipment doesn’t directly contribute to cashflow.

Think seriously about whether you actually need anything. Many businesses don’t. This isn’t a free ticket after all, as you’ll have to stump the initial costs and benefit from the write off later.  You must also make sure your purchase is covered before you proceed. If unsure, speak to an advisor.

How to apply and record instant asset write off?

When approaching the topic of how to apply and record the instant asset write off, get your advisor involved.  Accountants and finance experts excel in this area, and they should be your first port of call before you lay down cash with a view to take advantaging of the scheme.  How to calculate the IAWO scheme from the ATO:

• The whole price of the equipment or asset must be under the threshold ($150,000 for most small businesses).
• The threshold will be calculated as either inclusive or exclusive of GST, depending on whether your business is registered for GST or not.
• To calculate the amount you’re eligible to claim, be sure you first subtract the portion of the equipment you use for private or personal use.
• The remaining balance used for business is your taxable portion.
• Regardless of how much you use for private use and how much the taxable portion is, the entire cost of the asset must still be under the threshold.

Understanding what is and how does the instant asset write off work for small businesses is best understood in conjunction with your advisor. Failing that, be sure to consult the ATO here to come to a full understanding of the instant asset write off scheme.

Should you have any questions, please feel free to contact us.

News on 23 May 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

As part of the 2021 Budget, the Government announced a number of initiatives that are now law and take effect from 1 July 2022. 

 

SG rate will increase to 10.5%

The superannuation guarantee (SG) rate will increase from 10% to 10.5% on 1 July 2022. The SG rate is the minimum amount of super you’re required to pay, by law, on ordinary time earnings. This increase is in line with the Government’s plan to increase the SG rate to 12% by 2025.

Super guarantee percentage

Table 21: Super guarantee percentage

Period	General super guarantee (%)	Super guarantee (%) for Norfolk Island (transitional rate) (from 1 July 2016)
1 July 2020 – 30 June 2021	9.5	5
1 July 2021 – 30 June 2022	10	6
1 July 2022 – 30 June 2023	10.5	7
1 July 2023 – 30 June 2024	11	8
1 July 2024 – 30 June 2025	11.5	9
1 July 2025 – 30 June 2026	12	10
1 July 2026 – 30 June 2027	12	11
1 July 2027 – 30 June 2028 and onwards	12	12

$450 salary threshold for SG contributions removed

From 1 July 2022, the $450 monthly threshold for the payment of SG contributions will be removed. 

This means you’ll be required to make SG contributions to all eligible employees aged 18 years and over, regardless of how much the employee is paid. 

Employees aged under 18 years will be eligible for superannuation if they work more than 30 hours in a week, regardless of how much they’re paid. 

For more information read the ATO’s recent announcement. 

Work test for older Australians removed

From 1 July 2022, employees aged under 75 years will be able to make or receive personal (after tax) and salary-sacrificed contributions without meeting the work conditions – known as the work test or work test exemption. 

The existing contribution cap limits will still apply and employees may also be able to use the bring forward rule. These employees will still need to meet the work test to claim any personal super contribution deductions. 

For more information read the ATO’s acceptance of member contributions and work test webpage.

News on 13 April 2022

Some highlights on the recent Federal Budget 2023

One-off cost of living tax offset

To help address the increasing cost of living, the Government has proposed a one-off $420 cost of living tax offset for low- and middle-income earners. The existing low- and middle-income tax offset will be extended for another year. If enacted, eligible workers could get up to $1,500 back at tax time.

One-off cash payment

Pensioners and others receiving eligible government concession holders, will receive a one-off, income tax-exempt payment of $250. This will be paid automatically in April 2022 to eligible recipients.

$450 salary threshold for super contributions removed
From 1 July 2022, the $450 monthly threshold for the payment of superannuation guarantee (SG) contributions will be removed. This means you’ll be required to make SG contributions to all eligible employees, regardless of how much the employee is paid.

For more information read the ATO’s recent announcement.

News on 3 February 2022

NSW small businesses have been thrown a lifeline with a $1 billion support package announced on Sunday by the NSW government.

The state’s peak business organisation, Business NSW, said the package would help a wide variety of businesses that had been hard hit by the Omicron surge. 

The package, which starts February 1, includes: 

• a lump-sum payment of 20% of weekly payroll with a minimum payment of $500 per week and a maximum payment of $5,000 per week. It is for businesses with a turnover between $75,000 and $50 million that suffered a 40% downturn in January and projected to do the same in February. 
• The Small Business Fees and Charges rebate program extended from $2,000 to $3000, and employing businesses will be able to use the rebate to obtain rapid antigen tests (RATs).
• Commercial landlord relief will be extended until 13 March.

News on 17 December 2021

Dear customers, business associates and friends,

 

My team and I want to thank you for your ongoing support of us in 2021.

Our office will be closed from Friday 17^th December and will be re-opened Monday 10^th January 2022.

My team and I wish you and your family a wonderful festive season and a happy, healthy and prosperous 2022.  We look forward to working for you in 2022.

 

Regards,

 

Donny Tsui

Senior Partner

News on 4 November 2021

The Australian Government has announced the full implementation of Modernising Business Registers (MBR) program as part of its Digital Business Plan. As an effect, the government has introduced Director Identification Number (Director ID / DIN) 

 What is a Director Identification Number (DIN)?

The Director Identification Number (director ID) is a unique identifier that a director will apply for once but will stay with a director for life, offering greater identity security. You will need a director identification number (DIN / Director ID) if you’re a director of a company or a corporate trustee of a self-managed super fund (SMSF), registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporation. The objective of this rollout is to create a fairer business environment by helping prevent the use of false and fraudulent director identities. This will go a long way to better identifying and eliminating director involvement in unlawful activity.

How and when to apply for DIN?

Directors will be able to apply for a Director ID from November 2021 on the new Australian Business Registry Services (ABRS) online and log in using the myGovID app to complete the application process. Furthermore, they will need to provide proof of identity documentation to verify their identity. A director can choose to provide their tax file number when applying for a DIN, which should expedite the application.

Directors will need to apply for their director ID by themselves to verify their identity. No one can apply for it on their behalf.

When will directors need to apply?

Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director. The table below illustrates the same in detail.

How director ID works?

A director ID is a 15-digit identifier given to a director (or someone who intends to become a director) who has verified their identity with ABRS.

Directors will only ever have one director ID. They’ll keep it forever even if they – change companies, stop being a director, change their name, move interstate or overseas.

Why you need a director ID?

All directors are required by law to verify their identity with ABRS before receiving a director ID.

This is important because it will help to:

• prevent the use of false or fraudulent director identities
• make it easier for external administrators and regulators to trace directors’ relationships with companies over time
• identify and eliminate director involvement in unlawful activity, such as illegal phoenix activity.

 How can agents assist their impacted clients?

An agent or advisor cannot apply on behalf of the director, but they can still provide assistance to their clients by providing guidance on the verification and application process, including if their client is required to get a director ID.

Agents can support their clients by:

• letting them know about the new requirement, when and how to apply
• encouraging their clients to set up their myGovID to a Standard identity strength, if they have not done so already, and
• guide and support their clients through the process of applying for a Director ID.

How does it affect the current company registration process?

For now, there will be no change to how you register a company with us, hence there is no requirement include the DIN in your company application form or any changes to company forms (484, etc). This will take place in the future as the ABRS builds the new registry platform, and we will keep you up-to-date with any developments during this course.

Should you have any questions, you can talk to your accountant or us to learn more about the MBR program.

News on 7 October 2021

JobSaver now available for charitable not-for-profits (NFPs)
Eligible NFPs can apply for JobSaver if they have experienced a turnover decline of at least 15% and less than 30% because of the public health orders.

The JobSaver program has been extended to charitable NFP organisations that have experienced a turnover decline of at least 15% and less than 30% as a result of the public health orders.

NFPs are eligible for this program if they are charitable and their primary purpose, under Australian Charities and Not-for-profits Commission (ACNC) classifications, is to:

• advance social or public welfare (including disability and health social support services), or
• prevent or relieve the suffering of animals (for example, animal welfare organisations).

For more information about eligibility for charitable NFP organisations that have experienced the required decline in turnover.

News on 15 July 2021

Government support micro and small business during lockdown The Australian and NSW Governments announced new measures

New measures to support small businesses during the current NSW lockdown were announced yesterday. These include: Increased small business support payments of $7,500 and $10,500 or $15,000, depending on the decline in business turnover A “JobSaver” employee retention scheme providing cashflow support to businesses to help them retain staff. The cash boost will be up to 40% of weekly payroll with a payment of between $1,500 to a maximum of $10,000 per week, provided staffing levels are maintained at the level as of 13 July 2021. Non-employing businesses are eligible for $1,000 p/w $1,500 grants per fortnight for microbusinesses (annual turnover between $30,000 and $75,000) that have suffered at least a 30% decline in turnover. Payroll tax deferrals for all businesses and a 25% concession for medium-sized businesses that have suffered a 30% revenue decline A requirement on landlords to participate in mediation before taking actions to evict or lock out tenants Up to 100% land tax concessions for commercial landlords who provide rent relief A $75 million support package for the performing arts sector to be administered by Create NSW A support package for the accommodation sector worth $26 million An increase in the payment amount for stood down workers from $500 to $600 per week for those who lost more than 20 hours, and to $375 for those who lost between 8 and 20 hours, and for it to be available to workers outside of the Greater Sydney lockdown areas Expanded mental health services with programs targeted at young people and CALD communities

News on 29 June 2021

Small businesses urged to pay attention to key areas and act now in EOFY tax planning

Dear customers and business associates,

The end of financial year is only a few days away.  There are some last minute tips for your tax planning:-

• Super guarantee (SG): SG contributions must be paid by 30 June 2021 to qualify for a tax deduction in the 2020–21 financial year. The superannuation fund must receive these contributions by 30 June. He said some clearing houses can take more than a week to submit the payment to the super fund, so it would be advisable to ensure that superannuation is paid by mid-June where possible.

• Temporary full expensing (previously known as the instant asset write-off): Policies have been expanded again in the last two federal budgets as part of the government’s COVID-19 initiative to encourage business spending to improve cash flow. There is now no limit to the amount a small business can write off under this concession and, unlike larger businesses, small businesses with aggregated turnover less than $50 million receive a full write-off for secondhand assets. While the May 2021 federal budget extended the concession all the way up until 30 June 2023, there is still a timing advantage where claims can be made in 2020–21.

• Loss carry-back: Another concession introduced in the October 2020 federal budget and extended for a further 12 months in the May 2021 Budget, this concession allows a company (i.e. not available to partnerships, trusts or individuals) to “carry back” tax losses incurred in any of the 2019–2020, 2020–21, 2021–22 and 2022–23 income years to an earlier year as far back as 2018–19. A refund could be claimed on lodgement of tax returns from the 2020–2021 year onwards, representing the tax saving that would have arisen if the tax loss had been available to claim in the earlier year.

• Small business CGT concessions: Those operating a small business may be eligible for these concessions on the sale of business assets by a company or on the sale of shares in a company carrying on a business. The concessions may be available where aggregated turnover is less than $2 million or total net assets (excluding the family home and superannuation fund balances) less than $6 million, although the eligibility rules are quite strict, having been tightened significantly in recent years.

• Income deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June. Income from the payments won’t be taxed until the following financial year.

Should you have any queries, please contact us.

News on 21 June 2021

Minimum wage to increase by 2.5%

Following the Annual Wage Review 2021, the Fair Work Commission has announced a 2.5% increase to minimum wages. This will also apply to all award wages, with the award increase happening in 3 different stages.

You don’t need to do anything now. We will let you know when the new minimum wages are available in our pay tools.

See our Annual Wage Review 2021 page for more information.

News on 3 June 2021

Super Guarantee rate rising 1 July

On 1 July 2021, the super guarantee rate will rise from 9.5% to 10%. If you have employees, you will need to ensure your payroll and accounting systems are updated to incorporate the increase to the super rate.

If you need help to work out how much super you need to pay for your employees after 1 July, you can use our super guarantee contributions calculator.

It’s important you pay your workers the correct amount of super. Our superannuation guarantee eligibility decision tool will help you determine if your employees are eligible for super, including any contractors treated as employees for super purposes.

The super rate is scheduled to progressively increase to 12% by July 2025. You can find the scheduled rate increases and dates on our website.

News on 13 May 2021

Australian Federal Budget 2021-22

On 11 May 2021, the Government handed down the 2021/22 Federal Budget. Whilst this marked a return to the traditional timing of the budgetary processes, the content of the 2021/22 Budget continues to remind us that our economy and way of life has still not returned to full normality post the events of COVID-19. 

Highlights

Personal income tax

• Retaining LAMITO (Low And Middle Income Tax Offset) in the 2021-22 income year.
• Modernising the individual tax residency rules – a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
• Reducing compliance costs for individuals claiming self-education expense deductions.
• Medicare levy thresholds for 2020-21.

Business owners

• Temporary full expensing extension until 30 Jun 2023.
• Temporary loss carry-back extension.
• Digital Economy Strategy — self-assessing the effective life of intangible depreciating assets.
• Addressing Workforce Shortages in Key Areas — JobTrainer Fund — extension.
• Building Skills for the Future — Boosting Apprenticeship Commencements wage subsidy — expansion.
• Getting Vulnerable Australians Back into Work — additional support for job seekers.
• SME Recovery Loan Scheme.
• Employee Share Schemes — removing cessation of employment as a taxing point and reducing red tape.
• Patent Box — tax concession for Australian medical and biotechnology innovations.

Superannuation

• First Home Super Saver Scheme — increasing the maximum releasable amount to $50,000.
• First Home Super Saver Scheme — technical changes.
• Reducing the eligibility age for downsizer contributions.
• Repealing the work test for voluntary superannuation contributions.
• Removing the $450 per month threshold for superannuation guarantee eligibility.
• Early release for victims of family and domestic violence.
• Legacy retirement product conversions.
• SMSFs — relaxing residency requirements.
• Transfer of superannuation to the KiwiSaver Scheme.

Not-for-profits and philanthropy

• Not-for-profits — enhancing the transparency of income tax exemptions.
• Philanthropy — updates to the list of specifically listed deductible gift recipients.

Child care

• Child care subsidy.
• Other measures.

Social security

• Increasing the Flexibility of the Pension Loans Scheme.
• Enhancing Welfare Integrity Arrangements.
• Increased support for unemployed Australians.

Aged care

• Whole-of-government response to Royal Commission into Aged Care Quality and Safety.

News on 3 Feb 2021

Businesses can get $10k a year for each new employee, says ATO

Businesses could potentially receive up to more than $10,000 over a year for each eligible additional employee hired, says Australian Taxation Office deputy commissioner James O’Halloran.

Contact us for more details.

News on 25 Jan 2021

Dear customers, business associates and friends,

We would like to inform you that we will be moving to our new office which is 210/2 Pembroke Street, Epping 2121 on 26 Jan 2021.

In fact, it is only a minute on foot away from our previous office.  Below please find the map showing how to go from our old office to the new office for your reference.

Please drop by to have a cup of coffee if you are in the area.

Should you have any questions, please contact us.

Yours faithfully,

Donny Tsui

News on 18 Dec 2020

Dear customers, friends and business associates,

As this challenging year draws to a close, we trust that some of the difficulties of the last 12 months are now behind all of us.  We would like to express our sincerest appreciation for your support throughout 2020.

We hope we were able to assist you. This year end means the beginning of a new one with new possibilities and we are dedicated to continuing to help you reach your goals in 2021.

From all of us at D & I Accounting, we want to say a big thank you for being an invaluable part of our business and wish you a Merry Christmas and a bigger and better year ahead.

Our office will close on Friday, 18 December 2020 and return on Monday, 4 January 2021. 

Regards,

Donny Tsui

News on 12 Dec 2020

Businesses will now be able to register for the JobMaker Hiring Credit scheme ahead of the first quarterly claim period starting in February next year.

Under the scheme, eligible businesses can access the payment for up to 12 months for each eligible additional employee they hire between 7 October 2020 and 6 October 2021, and will be able to claim up to $200 a week for each additional eligible employee they hire aged 16 to 29 years, and up to $100 a week for those aged 30 to 35 years.

Employees need to have completed a minimum average of 20 hours (worked or paid) per week during the time they were employed in the JobMaker period.

ATO Deputy Commissioner James O’Halloran said the ATO is working hard to make it as easy as possible for employers to access the government’s JobMaker Hiring Credit payment.

He also encouraged businesses to check their eligibility and take this first step to register for the scheme from this week and then employers will be ready to move to quickly make a claim in February 2021, as they cannot claim if they are not registered.

“We encourage employers to register from now to ensure their hiring credits can be paid promptly from when the first quarterly claim period opens in February 2021,” Mr O’Halloran said.

“Employers are reminded that new employees must have received the Parenting Payment, Youth Allowance (Other) or JobSeeker Payment for at least 28 consecutive days (or two fortnights) within the 84 days (or six fortnights) of being hired to allow for a claim to be made by the employer.

“There are some key dates to keep in mind, and simple steps employers can take now, but please remember that not everything needs to be done from next week.”

The federal government established the JobMaker Hiring Credit payment to help accelerate growth in the employment of young people during the COVID-19 economic recovery.

News on 7 Oct 2020

Federal Budget 2020-2021

Tax cuts, more incentives for business investment and payments for pensioners and aged care: tonight’s Federal Budget was a wide-ranging fiscal program to cushion the impact of the Covid-19 pandemic and kickstart an economic recovery.

WINNERS

Taxpayers 

Key to the government’s strategy is to put money in the pockets of taxpayers in the hope they will boost spending and the resulting demand will help lift the economy out of recession. 

To that end, more than 11 million taxpayers will receive a tax cut backdated to July 1 this year.

Stage Two of the legislated tax cuts will be brought forward by two years, lifting the 19 per cent threshold from $A37,000 to $A45,000, and the 32.5 per cent threshold from $A90,000 to $A120,000. 

This would result in a tax relief of up to $A2745 for singles, and up to $A5490 for dual income families compared with 2017-18. 

Established businesses

The budget includes a range of measures designed to encourage established businesses to spend on plant and equipment, invest in research and development, and also hire or retain workers. 

The Instant Asset Write Off for businesses will be extended to businesses with a turnover of up to $A5 billion and will be further extended until June 2022. 

There is also relief for businesses which have been “doing it tough” during the pandemic, with a measure which will enable them to use their losses earlier. 

Losses incurred to June 2022 can be offset against prior profits made in or after the 2018/19 financial year. 

To encourage businesses to hire younger Australians, the government has announced a new program called JobMaker, which will contribute $A200 per week, payable for one year, towards the hiring of people aged 16-35 who are currently on JobSeeker. 

The payment for those aged 30-35 is $A100 per week. 

The government estimates that the combination of the immediate expensing of capital expenditure and loss carry-back measures will create an additional 50,000 jobs nationally. 

For R&D, the budget removes the cap on refunds and lifts the rate. 

Apprentices 

In vocational training, the budget commits an additional $A1.2 billion to create 100,000 new apprenticeships and traineeships, with a 50 per cent wage subsidy for businesses who employ them. 

Infrastructure projects

In keeping with its plan to boost jobs, the budget expands the government’s 10-year infrastructure pipeline, bringing to $A14 billion the new and accelerated infrastructure projects which would support an estimated 40,000 new jobs. 

The projects span the nation, and include major road upgrades in several states and rail projects in Victoria and Western Australia, and new bridges in Tasmania and the ACT. 

An additional $A2 billion is also earmarked for road safety upgrades. 

According to Frydenberg, “Funding for these shovel-ready projects will be provided on a use it or lose it basis. If a state drags its feet, another state will get the money. We need works to start, not stall.” 

Pensioners

Aged pensioners will receive an additional $A250 payment from December and a further $A250 payment from March next year. 

There is also a package for senior Australians who wish to continue living in their own homes, with $A1.6 billion earmarked for an additional 23,000 home care packages, bringing the total to 180,000 places. 

Manufacturing

As the pandemic has exposed issues in Australia’s globally reliant supply chain, the focus has switched back to manufacturing for national resilience as well as job creation.

The budget includes a $A1.3 billion Modern Manufacturing plan to target six key industries, from food and beverage manufacturing to renewable energy and the space industry. 

Regional Australia

While much of the national focus has been on the pandemic, regional Australia is still suffering the economic impact of the drought and bushfires. 

The budget includes $A2 billion in concessional loans for farmers, and $A2 billion for water infrastructure projects across the country to expand the national water grid. 

$A350 million has been allocated to support regional tourism, while $A317 million is earmarked for exporters to continue to access global supply chains.  

The NDIS and mental health services 

The budget includes an additional $A3.9 billion for the National Disability Insurance Service, with the Treasurer assuring “every Australian” that the NDIS would “always be fully funded” under a coalition government. 

The budget also doubles the number of Medicare psychological services funded through the Better Access Initiative from 10 to 20. 

First home buyers 

As telegraphed before the budget, the government announced an additional 10,000 places for first home buyers of new homes under the First Home Loan Deposit Scheme. 

The budget also includes an additional $A1 billion in low cost finance for the construction of affordable housing, and $A150 million in the Indigenous Home Ownership Program for new homes in regional areas. 

Women in STEM and female entrepreneurs 

Recognising that women have made up the majority of those who lost their jobs during the pandemic, the Budget includes the government’s second Women’s Economic Security Statement, with $A240 million in programs and support. 

These focus on new cadetships and apprenticeships for women in science, technology, engineering and mathematics, job creation and entrepreneurialism. 

LOSERS

Long-term or older unemployed 

While these people received a $A550 fortnightly coronavirus supplement to their JobSeeker payments in March, this has been cut to $A250 and is scheduled to end by December 31. 

The budget makes no mention of whether this supplement will be continued or if JobSeeker will be increased on a permanent basis, and there are no targeted programs for unemployed people older than 35. 

Self-funded retirees 

Already struggling due to record low interest rates, which have crimped the returns from the term deposits many of them rely on, this group – who do not get the aged pension – receive nothing in the budget. 

New businesses 

While there are incentives for existing businesses, the instant asset write off is the main measure which new businesses can take advantage of. 

There are no specific incentives or programs to encourage start-ups and new businesses. 

“CPA Australia is disappointed that the budget does not include any specific assistance for those new to business. These entrepreneurs also need help to survive having already missed out on JobKeeper, the Cash Flow Boost and several state government grants,” says Ord. 

News on 1 Oct 2020

Due to the ongoing COVID-19 pandemic and the impact on Australian businesses, the Federal Government extended JobKeeper until March 2021 for qualifying businesses. The extension affects the way you need to process Jobkeeper in your software. Here’s a summary of the key changes:

Extension 1: 28 September 2020 to 3 January 2021

• Tier 1: Full time employees $1,200 per fortnight 
• Tier 2: Part time employees $750 per fortnight 

Extension 2: 4 January 2021 to 28 March 2021

• Tier 1: Full time employees $1,000 per fortnight 
• Tier 2: Part time employees $650 per fortnight 

Your employees will either be a JobKeeper Tier 1 employee or a JobKeeper Tier 2 employee. This is determined by how many hours they worked in the month before becoming eligible for JobKeeper. It is an employer’s responsibility to determine the JobKeeper tier.

News on 23 May 2020

Instant asset write-off for eligible businesses

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.

Changes from 12 March 2020

From 12 March 2020 until 30 June 2020 the instant asset write-off:

• threshold amount for each asset is $150,000 (up from $30,000)
• eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

For more information, you can visit https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/

News on 30 March 2020

Federal Stimulus Package – JobKeeper Payment

In case you haven’t heard, the federal government has announced a JobKeeper Subsidy Payment to assist businesses which are struggling to retain their employees due to the impacts of COVID-19.

To summarise:

• Details:
  • This is a temporary subsidy open to businesses impacted by COVID-19
  • The government will provide $1,500 per fortnight per employee for up to 6 months
• Eligible Businesses:
  • Business turnover less than $1 billion & business will experience more than 30% reduction compared to a year ago; or
  • Business turnover more than $1 billion & business will experience more than 50% reduction compared to a year ago.
  • Employee must have been employed as at 1 March 2020 & currently employed (incl. those stood down or re-hired)
• Timing:
  • First payments to be received in the first week of May

If you are interested in applying for this concession, please register your interest at: https://www.ato.gov.au/general/gen/JobKeeper-payment/ or alternatively please contact our office to register for your business.

News on 18 January 2020

Federal Stimulus Package Info

During these times, a few key areas that is likely to be applicable to you are:

1.      Increasing the instant asset write off to immediately deduct purchases of eligible assets costing less than $150k (including new and second hand assets purchased from 12 March 2020 to 30 June 2020).

2.      Business investment allowance which includes a 50% accelerated depreciation rate on new assets acquired after 12 March 2020 or installed by 30 June 2021.

3.      Boosting Cash Flow for Employers – Eligible businesses (aggregated turnover under $50m) that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. When you lodge the Mar 2020 BAS, ATO will credit the integrated client account to provide this benefit. This cash flow assistance is available for PAYG withholding lodgements for the months of March, April, May and June 2020.

News on 13 January 2020

Government announces coronavirus stimulus package
The government has announced a range of measures to support the economy, business and employment in the face of the coronavirus health crisis. The measures include the below.

Cash Flow Boost for employers – employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment of $2,000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a payment equal to 50 per cent of taxes withheld from employees’ salary and wages up to $25,000. 

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

The payment will be delivered as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Increasing the instant asset write off – the government is proposing to increase the threshold for the instant asset write off from $30,000 to $150,000 and expand access to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available from 12 March to 30 June 2020 for new or second-hand assets first used or installed ready for use by 30 June 2020.

Accelerated deprecation – the government is proposing an accelerated deprecation deduction for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50 per cent of the cost of the eligible asset on installation, with existing depreciation rules applying to the balance. Eligible businesses are those with an aggregated turnover below $500 million. Eligible assets are those that can depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is plant, equipment and specified intangible assets, such as patents), but does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Apprentice and trainee wage subsidy – the government will offer employers a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage from 1 January to 30 September 2020, capped at $7000 each quarter per each eligible apprentice or trainee. Businesses with less than 20 full-time staff will be eligible, however employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.

Direct payment to individuals – the government will make a one-off payment of $750 to around 6.5 million social security, veterans and other income support recipients and eligible concession card holders residing in Australia.

Should you need further details, you can visit Treasury website.

https://treasury.gov.au/coronavirus?utm_source=exacttarget&utm_medium=email&utm_term=All%20Subscribers&utm_content=https%3a%2f%2ftreasury.gov.au%2fcoronavirus&utm_campaign=CPA+Tax+News+ed+9+-+12+March+2020_12-March-2020

News on 8 December 2019

Wishing you a Merry Christmas and a Happy New Year!
Please be advised that our office will close on Wednesday 18 December 2019 and re-open on Monday 13 January 2020.
For urgent attention please contact Donny on his mobile 0430 500 227.

News on 1 July 2019

Single Touch Payroll (STP) is a new way for employers to report tax and super information to the ATO. It starts from 1 July 2019 for employers with 19 or less employees.
You’ll report the following information through an STP ready solution – such as payroll software:
	payments to employees such as salaries and wages pay as you go (PAYG) withholding super information.
The way you pay your employees won’t change, however you will be sending us this information each time you pay them.
Start reporting any time from 1 July to 30 September 2019. If you can’t start reporting by this time, you’ll need to apply for a later start date. An online tool to help you do this will be available on our website in April.
How to get started
	If you already use payroll software – check to see if it offers STP reporting by talking to your software provider or viewing their website. If you don’t use payroll software – you can choose an STP ready solution or talk to your tax professional for advice on the best solution for your business. If you use a registered tax or BAS agent – you can ask them to report through an STP ready payroll solution on your behalf. If you have 1-4 employees – you can choose a low-cost STP solution. Find out more at ato.gov.au/STPsolutions

News on 23 September 2016

Tax cuts – withholding amounts changed

16 September 2016

The Australian Government has increased the 32.5% tax threshold from $37,001 – $80,000 to $37,001 – $87,000.

What does this mean for employers?

The tax tables have changed for employees who earn over $80,000.

You need to download the updated tax tables from ato.gov.au/taxtables or contact your payroll software provider for the relevant update.

Do employers need to make any other adjustments?

The new tax tables are effective from 1 October 2016. You don’t need to make any other adjustments or refunds as we will refund any over-payment of tax when your employees (and payees) lodge their 2016-17 income tax return.

News on 02 June 2016

Give yourself an EOFY check-up

1. Consult your accountant – now

The first big mistake many businesses make is failing to truly engage with their accountant or financial advisor. This interaction should go beyond mere compliance and tax return submissions to include growth and cash-flow strategies, according to Peter Langham, chief executive officer of business finance specialist Scottish Pacific. He believes owners of small and medium-sized entities, in particular, often focus on their work in the business at the expense of working on the business strategy. “So they can miss opportunities,” Langham says.

2. Take advantage of a $20,000 asset write-off

Businesses with annual revenue of up to $2 million can take part in a generous government write-off scheme for plant and equipment purchases. Alex Duonis, ‎principal, tax consulting at business advisory firm Crowe Horwath Australia, says the accelerated depreciation measure applies to all asset purchases up to the value of $20,000 and can significantly reduce the amount of tax a business will pay. He warns, though, that it applies to acquisitions from May 2015 to June 30, 2017, after which the limit will revert to $1000. “So there’s quite an opportunity now to get that accelerated deduction,” Duonis says.

3. Maximise any other deductions

Aside from the write-off scheme, businesses should take advantage of other legitimate deductions. This may include bringing forward expenses such as office supplies, repairs and maintenance into the current year, or prepaying monthly costs such as rent, electricity, wages and utilities before 30 June.

4. Write off bad debts

Ensure you write off any bad debts and prepare minutes documenting the debts and all efforts you have made to recover them, otherwise they cannot be claimed as deductions. This action also enables adjustments for any GST charged on the invoice. Langham says the key is to act now rather than waiting a few months until you do your tax return. “Do it before 30 June and look at your sales ledger and any possible delinquent accounts and make sure you provide for them in this financial year,” he says.

5. Comply with your superannuation requirements

Getting organised on the superannuation front is a must. Duonis notes that super is not tax deductible until it has been paid, so it is important to ensure all super contributions for employees are completed by the end of the financial year. “This is a good way of reducing your income tax bill,” he says.Duonis says business owners should also consider making concessional contributions into their super fund to take advantage of tax benefits (contributions are taxed at just 15 per cent). The limit is $30,000; or $35,000 for those aged 49 and over. The June 30 deadline is also approaching for employers with 19 or fewer employees to be using Super Stream, a standardised format for transmitting superannuation data between employers, funds, service providers and the Australian Taxation Office. Larger employers should already be using Super Stream.

6. Understand how to manage cash flow

Langham urges business owners to start the new financial year in a healthy cash position. This means reviewing your cash-management processes and adopting the most appropriate funding solutions.

“It’s a good time of year to plan for the business’s future and make sure that all appropriate steps are taken in terms of managing cash flow,” he says.

A common error, Langham observes, is injecting too much cash into superannuation to take advantage of tax breaks while not appreciating the potential impact on the business’s cash flow. Then the business can feel the pinch on 1 July.

“We see a lot of businesses that do their planning, spend the money and then realise their cash flow doesn’t support their strategy,” Langham says.

7. Check your trust obligations

The use of trust structures has come under scrutiny from the ATO, so it is important to understand your obligations. There is a requirement for the trustee to sign off on the distribution of income to beneficiaries before 30 June. Duonis says this is normally done by way of a distribution minute that may specify distributions on a percentage basis without dollar amounts being specified. If a valid distribution does not occur before 30 June, there is a risk that the accumulated income will be taxed to the trustee at a penalty rate.

“So clients who have those sorts of entities ought to be talking to their accountants now about where income goes this year,” Duonis says.

8. Consider any capital gains tax benefits

If your business has made a capital gain in the current financial year, it makes sense to assess the presence of any other capital losses that may offset those gains. For example, you could include selling assets that have incurred a capital loss.

One change of which many business owners may not be aware stems from the Small Business Restructure Rollover Bill 2016. The change allows small businesses to alter their legal structure without incurring a CGT liability, with the bill applying to the transfer of assets occurring on or after 1 July, 2016.

Duonis warns that any changes have to be of a genuine business restructure, not a move simply to get tax benefits.

“The bill didn’t get a lot of publicity, but it provides more opportunities for businesses to change their structure without tax charges.”

Words by Cameron Cooper

The articles represent the views of the authors and not necessarily that of the Bank. They are only intended as a general guide and do not represent tax advice you should seek independent professional tax or financial advice before acting on any matters set out in the articles.

– See more at: https://businessfocus.westpacgroup.com.au/blog/2016/may/18/give-yourself-an-eofy-check-up/#sthash.t67trzER.dpuf

02 February 2016

What’s new for small business?

Instant asset write-off – simpler depreciation rules

Small businesses can immediately deduct the business portion of most assets if they cost less than $20,000 and were purchased between 7:30pm on 12 May 2015 and 30 June 2017.

This deduction can be used for each asset that costs less than $20,000, whether new or second-hand. The deduction is claimed through a tax return, in the year the asset was first used or installed ready for use.

From 1 July 2017, the threshold will return to $1,000.

Accelerated depreciation for primary producers

From 12 May 2015, primary producers can immediately deduct the costs of:

• fencing, which were previously deducted over a period up to 30 years
• water facilities, previously deducted over three years.

They can also deduct the cost of fodder storage assets over three years, instead of over a period up to 50 years.

Primary producers who are small businesses are also eligible to claim the instant asset write-off until 30 June 2017.

Deductions for professional expenses for start-ups

From 1 July 2015, small businesses are entitled to certain deductions when starting up a small business. The range of deductible start-up costs includes professional, legal and accounting advice and government fees and charges.

Small business restructure roll-over (capital gains tax roll-over relief)

In the 2015 Budget, the government announced that it will allow small businesses to change the legal structure of their business without attracting a capital gains tax (CGT) liability at that point.

The exposure draft legislation included a possible extension of the relief to transfers of trading stock, revenue assets and depreciating assets. If passed, these changes will apply to asset transfers that occur on or after 1 July 2016.

The proposed changes are not yet law.

Fringe benefits tax changes for work-related devices

From 1 April 2016, small businesses will not incur a fringe benefits tax (FBT) liability if they provide their employees multiple work-related portable electronic devices that have similar functions. These include devices that are primarily used for work, such as laptops, tablets, calculators, GPS navigation receivers and mobile phones.

This benefit may be in addition to or part of the employee’s salary or wages package.

Small business income tax offset

From the 2015–16 income year, an individual is entitled to a tax offset on the tax payable on the portion of their income that is from:

• net small business income from sole trading activities, and/or
• share of net small business income from a partnership or trust.

The income tax offset can reduce the tax payable that relates to the individual’s small business income by 5% up to $1,000 each year.

We will work out the offset based on the total net small business income reported in your income tax return.

Company tax cut for small businesses

For income years commencing on or after 1 July 2015, the small business company tax rate has been reduced from 30% to 28.5%.

The maximum franking credit that can be allocated to a frankable distribution is unchanged at 30%, even if a small business is eligible for the 28.5% tax rate.

23 December 2015

Wishing you a Merry Christmas and a Happy New Year.
Please be advised that our office will close Thursday 24 December 2015 at 12 noon and re-open Tuesday 5 January 2016 at 9 am.
For urgent attention please contact Donny on his mobile 0430 500 227.