By Chris Smith
For businesses to maximise their cash position, they should consider the following tax planning opportunities before 30 June.
By Chris Smith
For businesses to maximise their cash position, they should consider the following tax planning opportunities before 30 June.
By Chris Mandzufas
A realistic and detailed budget is crucial for guiding your business to tackle unexpected challenges and to ensure you stay on track to grow.
It may seem obvious that business growth can only occur when there is money available for reinvestment, but it is surprising how many businesses do not budget and do not track their performance against a budget.
In the current environment, a realistic and detailed budget is a very important tool for providing valuable information, guiding your business to tackle unexpected challenges and most importantly to ensure you stay on track to grow.
By Tony Monisse
Learn why it is important to forecast the profit & loss, cashflow and balance sheet.
As I see it, a budget is merely a forecast prepared at a point in time. This point in time is usually tied to the end of the financial year and the business’ planning cycle.
In contrast, a forecast is frequently updated based on the changes in the operating environment e.g. winning a new contract, losing a key customer or a change in the staffing situation.
From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of May to claim JobKeeper payments for April. Payments will start being made to businesses in May.
Summary of important updates to this article as of 29 April to the below since originally published on 20 April:
The steps below outline the process involved so that you do not miss out.
If you have not already registered for the Business Portal, this will be required in order to lodge monthly reports with the ATO and claim the JobKeeper payments.
If you have not registered, please advise your accountant who the authorised contact person(s) should be for your business.
If you use the ATO Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). To set up the Business Portal for your business, you can find detailed steps on how to set this up here.
Your registered tax agent can also enrol on your behalf (further information below).
Check that you meet the eligibility requirements for JobKeeper, essentially:
More information on qualifying as an eligible business can be found here.
The turnover test requires a self-assessment of the eligibility requirements. These rules are complex and we recommend obtaining advice if there is any uncertainty.
To work out your decline in turnover to be eligible for JobKeeper for the first fortnight starting 30 March 2020, under the rules outlined as the “Basic Test” you can compare either:
You can choose to test your decline in turnover on either a monthly or quarterly basis, regardless of how you report for your Business Activity Statement purposes.
To qualify at a later time you can rely on the turnover test for the months of May, June, July, August, and September, or the July to September quarter. Note that in relying on this future date, eligibility will be deferred until the start of that period.
If you work out that you qualify for the JobKeeper payments for the first fortnight because your turnover has declined by the relevant amount, you remain eligible and do not need to keep testing turnover for following months.
There may be situations where the turnover in the corresponding period in 2019 does not provide an appropriate relevant comparison. In these situations, you will need to consider the alternative test, which has recently been released by the ATO.
The Alternative Test can apply in some of the following circumstances:
We are awaiting further updates from the ATO with respect to Service Entities and the alternative test that can be relied on to access the JobKeeper payment.
You need to determine:
In some circumstances the definition of GST turnover can be complex. More information can be found here.
If your eligibility requires a forecast of your projected GST turnover, we recommend this forecast is backed up with appropriate documentation that should be held for a period of 5 years.
You can use accrual basis of accounting to calculate the current GST turnover and projected GST turnover.
If you prepare your BAS on a cash basis, you can also rely on the cash basis. Recently updated ATO rules appear to show that the Cash Basis can now be relied on by all businesses. You must apply the same basis to the current GST turnover and the projected GST turnover.
More information on the Basic Test for turnover test can be found here.
Your employee is eligible if they:
You cannot claim for any employees who:
More information can be found here.
Before you enrol to receive JobKeeper payments, you need to notify each eligible employee that you intend to nominate them as employees under the JobKeeper scheme.
You must tell those employees that you have nominated them as an eligible employee to claim the JobKeeper payment.
They must agree to be nominated by you by completing the JobKeeper employee nomination notice and returning it to you for your records.
This must be received, signed back from your employees by the end of May for the payments to apply from 30 March.
The nomination form does not need to be provided to the ATO however employers are required to keep a copy of the completed form as part of their record-keeping obligations under the law.
If an employee is currently receiving an income support payment, they must notify Services Australia (Centrelink) of their new income to avoid incurring a debt they will have to repay.
All eligible employees must be nominated for the business to be eligible for the JobKeeper. This includes any employees who have been stood down. You must not pick and choose which employees you would like to receive the JobKeeper as this will exclude the business from being eligible.
You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 per fortnight.
You should pay your employees for each JobKeeper fortnight you plan to claim for (this period depends on the above eligibility timing).
The first fortnight is from 30 March – 12 April and each JobKeeper fortnight follows after that.
For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you before 8 May.
This means that you can make a combined payment of at least $3,000 per employee before 8 May.
If your eligible employees earn more than $1,500 per fortnight, you should continue to pay them their regular salary or wages. However, you will only receive $1,500 for each eligible employee.
Any amount you pay above $1,500 per fortnight is not subsidised by the JobKeeper payment.
For further information, a guide from the ATO for Paying Employees.
You only need to complete this step once.
You or your registered tax or BAS agent can:
You can identify your eligible employees in one of the following ways:
Each month, you must reconfirm the eligibility of your business and your reported eligible employees.
You must also provide information as to your current and projected GST turnover.
This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.
You or your registered tax or BAS agent can make the business monthly declaration.
Each month you must:
More information can be found relating to steps 7 – 9, here.
For business owners who are not receiving a salary, however are remunerated via share of profits, distributions or dividends, then the JobKeeper payment may apply to one individual who is considered to be an eligible business participant.
There are some complexities on how this rule applies, particularly for Unit Trusts and Discretionary Trusts, and we recommend obtaining advice specific to your circumstances.
The rules regarding the JobKeeper payment are regularly being updated and there are some time critical deadlines to be met.
We will continue to keep this article updated.
The ATO is posting regular updates at this website.
Should you have any questions regarding this stimulus package, eligibility requirements or any other questions, please do not hesitate to contact us on (08) 6212 7200 to discuss.
Updated 29 April 2020.
On 31 March 2020, the WA State Government announced economic relief measures for West Australians.
Key details of the package are:
Small and medium businesses:
Should you have any questions regarding this relief package, please do not hesitate to contact this office on (08) 6212 7200 to discuss.
On 22 March 2020, the Federal Government announced further economic stimulus measures for individuals, businesses and the banking sector, to support Australia through the unprecedented impact of COVID-19.
This economic plan will provide significant benefits to small and medium-sized businesses and households in addition to the stimulus package announced on 12 March.
The key announcements relate to:
More details below:
The Federal Government last week unveiled their $17.6 billion stimulus package — which includes grants of up to $25,000 for small business, support for those employing apprentices and accelerated depreciation amongst other measures.
On 2 April, the Government released the Federal Budget for 19/20.
Below are the key takeaways that may be relevant to you and your group:
Focus on Your Cashflow in the Lead up to the Christmas & New Year Holiday
Brentnalls Affiliation National Conference 2018
My Learnings from China – What Makes a Success Business & Do You Measure Your Competitive Advantage?
Proposed Changes to Division 7A
Practical Advice on Agile Leadership
Brentnalls Affiliation in the Top 100 Accounting Firms for 2018
Every Bit Counts
Did You Know We’re on LinkedIn?
The release of this paper is significant as it is the first detail provided by the Government on how the new proposed rules are intended to apply.
Prior to today’s release, the Board of Taxation’s report outlining recommendations to Government (finalised in 2014) was all we had available as a guide on how the new rules may be applied. Treasury has made substantial changes from those original recommendations.
The notable points that may affect your group are:
We will continue to keep you informed of the changes as further updates come to hand.
The latest edition of our Newsletter is on its way to your Inboxes! In it, you will find our Director’s reflection on the current financial market situation, Levi’s take on the importance of understanding the numbers, GrowthCon update & more.
Follow the link to access the Newsletter Download PDF of our August newsletter.
Business owners/farmers should recognise that the need for a fully discussed succession plan is paramount in any business/farming situation. A natural progression from one generation to the next (or in case of unexpected or premature death) through the deceased’s Will. Poor succession planning is the cause of much “hurt in business/rural Australia.” Read more
A Self Managed Superannuation Fund (SMSF) is a type of super fund set up for those who wish to manage their own superannuation assets privately, rather than be a part of a larger fund where members pool their super funds and these are managed by professional fund managers. It gives the members much greater control over the investment decisions, but also require far greater input by the members of the fund. All super funds are required to comply with their relevant regulatory bodies and with SMSF‘s, trustees are required to oversee these compliance requirements. Read more
The key areas of any Business that require ongoing maintenance to ensure the Health and Wealth of your business are: Read more
It has often been said that an average strategy well executed will always outperform a superior business strategy which is poorly executed. In fact in terms of effort, the development of thebusiness strategy is 10% of the effort and the execution of the business strategy is 90% of the effort. Read more
There are many ways to value a business, however the most commonly used valuation methodology for a profitable trading business is the Capitalisation of Profits Methodology.
This methodology is based on the average earnings of the business (before interest and tax – EBIT) multiplied by a capitalisation rate.
Therefore to increase the value of your business, a business owner should focus on: Read more
• You need to go yearly but you delay it for as long as you can
• Your past sins are obvious as soon as you open your mouth. They can be even worse when the dentist digs a little deeper and does an x-ray!
• The feeling of an unknown outcome – will you get the all clear?
• Feeling like you can’t get your point of view across even when they ask you questions
• The expensive bill at the end of the visit
• The ongoing maintenance and review so you don’t lose all of your teeth. Read more
The 2011 Federal budget signaled significant changes to the way Fringe Benefits Tax will be calculated on the use of motor vehicles. Traditionally, motor vehicles have formed an essential part of many remuneration packages and it was initially feared that the changes to the legislation would make it prohibitive for employers to use this carrot to entice and retain employees. However, closer analysis suggests that there continues to be scope to tax effectively package motor vehicles into employee’s salary under the new regime. Read more
Many exceptional companies have bonus plans to reward employees.
Why Consider the Contractor issue now?
The contractor issue is not at all new, nor has it been subject to any dramatic recent change. However there are a number of diverse factors that have brought this issue back to the spotlight.
Companies with a turnover in excess of $20 million per annum will be required to make PAYG Income Tax instalments on a monthly basis.
Under the current legislation, the taxable value of an in-house fringe benefit under a salary sacrifice arrangement would be reduced to 75% of the lowest price at which an identical benefit would be sold to the public or under an arm’s length transaction. This taxable value would then be eligible for a further $1,000 reduction in determining the FBT payable. Read more
For employers with LAFHA arrangements entered into after 8 May 2012, the new rules will apply from 1 October 2012.
The new rules require the following from the employers and/or employees: Read more
From the 2011-2012 year, there is a once-only opportunity to have excess concessional contributions refunded. Read more