News

One-Off Pandemic Leave Payment 4th August 2020

Prime Minister Scott Morrison has announced that employees who need to self-isolate in accordance with public health orders but have no sick leave available will be able to access a one-off pandemic leave disaster payment.

In a press conference today, Mr Morrison said those with no sick leave available to them will be eligible for a $1,500 payment for the fortnight they would be required to be in isolation.

He said that payment will be modelled on the exact same set of criteria that the Victorian government has put in place for it’s paid pandemic leave scheme.

“Those payments are principally made to those who are on short-term visas who otherwise wouldn’t have accessed Commonwealth payments,” Mr Morrison said.

“We will make sure that everyone else who finds themselves in this situation and they don’t have that leave available through their sick leave because it’s been exhausted will get a $1,500 payment for that fortnight”.

The announcement comes after both the Business Council of Australia and the Australian Council of Trade Unions united to lobby the government earlier today to implement a paid pandemic leave scheme as COVID-19 transmission in workplaces spikes in Victoria.

 

Should you have any queries, please do not hesitate to contact our office – (08) 8431 1644

It’s Tax Time Again – Receiving your Payment Summary 30th June 2020

For Employees

The way you receive your payment summary is changing

Many employers are now required to report your pay, tax and super information direct to the ATO each payday, so you can find all your information in one place when you need it. All employers will eventually report this way, and most are.

  • An employer who does report to the ATO this way will not have to give you a payment summary. Instead, you will get an end-of-year income statement in ATO online services through MyGov.
  • An employer who does not report to the ATO this way will still need to give you a payment summary at the end of the financial year (as they have previously).

Your payment summary information will be available in the following ways:

  • ATO Online Services via MyGov
  • Your Employer
  • Via your Tax Agent.

If you have not as yet set up a MyGov account, please follow this link:

MyGov – Create New Account

 

For Employers

If you are enrolled in STPR, the way you finalise your payroll has changed. The links for the new process in both Xero and MYOB are provided below:

Xero – Single Touch Payroll

MYOB – Single Touch Payroll

 

If you have any queries regarding end of year payroll processing, please contact our office – (08) 8431 1644.

June BAS Cash Flow Boost 24th June 2020

The ATO is due to disburse the much-anticipated additional cash-flow boosts to eligible employers via their BAS lodgements from 1 July 2020, and has issued some guidelines to help businesses understand the process.

Employers that have received the initial cash-flow boost, delivered as credits in the activity statement system (in either their March 20 quarterly BAS and/or April 20 & May 20 IAS), are eligible for the second round when they lodge their activity statements for each monthly or quarterly period from June to September 2020.

In a new notice published this week, the ATO has explained that the additional amount will be equal to the total initial cash-flow boost received by businesses and will be split evenly over the lodgements for the periods June to September.

This means that businesses lodging quarterly will receive 50 per cent of their total initial cash-flow boost for each activity statement, while those lodging monthly will receive 25 per cent per statement.

An example provided by the Tax Office shows that if an employer, lodging quarterly, received an initial cash-flow boost of $10,000 (the minimum credit), they will receive two additional boosts of $5,000 each when they lodge their June and September activity statements (BAS).

Similarly, a business lodging monthly that initially received a total of $50,000 (the maximum credit) will receive four payments of $12,500 when they lodge their June to September activity statements (BAS & IAS).

The ATO has cautioned businesses that may have revised their activity statements after lodgement that this may affect the amount of cash-flow boost they were due to receive.

 

If you would like more information on what Cash Flow Boost you could be expecting in your upcoming BAS, or if you want to ensure you are utilising the full potential of the Cash Flow Boost please contact us as soon as possible to ensure you do not miss out – (08) 8431 1644.

Instant Asset Write-Off Extension 12th June 2020

It was announced on Tuesday, the Government will extend the $150,000 instant asset write-off until 31 December 2020.

Prior to this announcement, the Instant Asset Write-Off threshold was set to reduce to $1,000 from 1 July 2020.

If you’ve purchased or are planning to purchase assets for your business, you may be eligible to claim an immediate deduction for assets less than $150,000.

The following tips can ensure you get your claim right:

  • check if you’re an eligible business
  • both new and second-hand assets can be claimed, provided each asset costs less than $150,000
  • assets must be first used or installed ready for use between 12 March and 31 December 2020 (Before 30 June 2020 in order to claim in 2020 Financial Year)
  • a car limit applies to passenger vehicles. The limit is $57,581 for the 2019–20 income tax year
  • if your asset is for business and private use, you can only claim the business portion
  • different eligibility criteria and thresholds apply to assets first used, or installed ready for use, prior to 12 March 2020.

If you require any assistance or further information, please do not hesitate to contact our office. We are more than happy to help!

EOFY Tax Planning Strategies 11th June 2020

All taxpayers are allowed to arrange their affairs in a manner that remains legal but which minimises their taxation liabilities.

Income tax is one of the largest expenses for most businesses and individuals, so it requires careful planning, budgeting and monitoring.

It is possible to manage your taxes and gain control over their effect on your finances through Tax Planning Strategies, such as the following: 

Purchase of Assets:
Purchase of assets costing $150,000 or less can be claimed 100% as a tax deduction.
This threshold is for EACH asset purchased, there is no limit to the number of assets you can buy and includes second hand assets.
If a commercial car is purchased this can be claimed 100%.
If a non-commercial car is purchased, you can claim a % up to the tax deductible limit of $52,346 ex GST for business use.

Prepayment Strategies:
Small Business Entity taxpayers making prepayments before 1 July 2020 can choose to claim a full deduction in the year of payment where they cover a period of no more than 12 months (ending before 1 July 2020).

Superannuation:
Contributions up to $25,000 to a complying superannuation fund can be tax deductable, to the extent contributions are actually made (i.e., they cannot be accrued but must be paid by 30 June).

If you would like to discuss any of the above or other tax planning strategies, please contact our office.

HomeBuilder Scheme Announced – $25K to build or renovate 4th June 2020

The government has announced the HomeBuilder scheme, which will see eligible owner-occupiers who are either building or undertaking a substantial renovation given $25,000 for doing so. But who will actually benefit from the stimulus?

HomeBuilder will provide eligible owner-occupiers, inclusive of first home buyers, a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020.

Construction works on the home must commence within three months of the contract being signed.

Who is eligible for HomeBuilder?

To access HomeBuilder, property purchasers and renovators must be an owner-occupier of the property.

They must also:

  • Be a natural person (not a company or a trust)
  • Be aged 18 years or older
  • Be an Australian citizen

Eligibility will also require having an income below one of the following income caps:

  • $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
  • $200,000 per annum for a couple based on both 2018-19 tax returns or later

The building contract must be entered into between 4 June 2020 and 31 December 2020 and must fall into either of the following categories:

  • The construction of a new home must be for the purpose of being a principal place of residence, where the property value (of the house and land) does not exceed $750,000; or
  • Substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million.

Construction must be commenced within three months of the contract details.

According to the Treasury, HomeBuilder will complement all existing state and territory First Home Owner Grant programs, stamp duty concessions and other grant schemes.

It will also complement the Commonwealth government’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Who is not eligible for HomeBuilder?

  • Owner-builders and anyone who is seeking to build a new home to be used as an investment property will not be eligible for HomeBuilder.
  • Investors seeking to renovate an existing home in use as an investment property will also not be eligible for the scheme.
Instant Asset Write-Off 28th May 2020

The time to act is NOW!

This is just a reminder that businesses have the opportunity for “Instant Asset Write-Off” this financial year. This means you can claim an immediate deduction for the cost of the asset in the year it is first used, or installed ready for use.

The changes implemented on 12 March 2020 increased the amount for each asset from $30,000 to $150,000 for all business with a turnover of less than $500 million.

If you are considering the purchase of any equipment or motor vehicles for business use, the time to do that is NOW – to ensure you receive the maximum tax benefit this financial year.

Please contact our office to confirm and discuss the eligibility of your proposed purchase – (08) 8431 1644. As always, we are here to help.

Read More: https://ato.gov.au/instant-asset-write-off/

Federal Court Reaffirmed – Casual Employees are entitled to be paid Annual Leave 25th May 2020

Businesses could face up to $8 billion in backpay after the Federal Court reaffirmed an earlier controversial decision, ruling that a casual employee on regular shifts is entitled to be paid annual leave.

This clearly indicates to me how out of touch the courts and judges are with small business in Australia.

It has been my experience that small business people always try to do the right thing. Sometimes they get it wrong, but never deliberately, generally errors occur due to misunderstanding the requirements of the complex labour legislation and numerous and complex Awards.

Often these business, are young couples with a young family starting a business. The flexibility of casual labour enables them to build their business and have flexibility with changing work flows.

From the employees prospective, this decision can only decrease the prospects of casual employees who ultimately become permanent employees. Also, again as industries continue to outsource employment overseas, I can only see this worsening as a result of this decision.

As we recover from Covid-19 we need to grow our economy and a flexible labour force is essential.

Peter Switzer “What were the judges in the Federal Court smoking? Their decision to give permanent employee entitlements to casual workers could ruin small businesses suffering under COVID-19 or kill casual jobs.”

Please Note: The Federal Government is considering whether it should change the law and could back any appeal to the decision to prevent what some people are calling “double-dipping” of entitlements.

 

In a ruling celebrated by the unions, the Full Federal Court reconfirmed on Wednesday that casual employees working regular and systematic hours with “predictable periods of working time” are entitled to personal leave, compassionate leave and public holiday payments.

The court ruled that regardless of what their contract says and regardless of the payment of a casual loading, casuals are likely to be considered permanent employees based on their nature of work.

Conventional wisdom has been that casuals do not accrue annual leave entitlements, because the casual loading sees them effectively paid a higher hourly rate in lieu of such accrued entitlements.
However, on Wednesday, the Federal Court upheld the precedent WorkPac v Skene ruling in 2018, when it decided that a casual mine worker who had regular and predictable shifts was entitled to the same benefits as a permanent member of staff, including accrued annual leave pay.

The labour hire firm, WorkPac, decided not to appeal the ruling in the High Court, instead deciding to challenge the Skene decision’s definition of casuals before a new full bench and with a different employee, Robert Rossato.

However, in a long-awaited judgment, the court on Wednesday made a similar decision, ordering WorkPac to pay Mr Rossato unpaid annual leave, personal leave, compassionate leave and public holiday payments which are owing on the basis that he was a permanent employee.

Mr Rossato was engaged by WorkPac under six separate casual contracts of employment over the course of three years, and casual loading was, according to the firm, incorporated into his flat rate of pay.

The labour hire firm claimed that one of Mr Rossato’s contracts expressly spelt out each proportion of the 25 per cent casual loading that was paid in lieu of leave, notice and redundancy entitlements. In addition, Mr Rossato was covered by an enterprise agreement which provided for the engagement of casual employees and the payment of a 25 per cent casual loading in lieu of leave entitlements.

However, despite arguments from WorkPac that Mr Rossato was a casual because of the lack of “firm advance commitment” as to his days and hours, the full bench ruled unanimously that the party’s description of the engagement as casual in a written contract is not determinative.

Leadership Through Challenging Times 21st May 2020

 

Leadership is never easy, there will inevitably be the occasional crisis, presenting leaders with new challenges that they need to address.

 

Sometimes these challenges will be unprecedented, such as the impact of the coronavirus pandemic while others may not be of this scale. As every situation is different, there is often no one ‘best’ way to respond.

While there is no magic recipe, we provide below 4 strategies that you as a leader should adopt, which will assist your leadership to be the strong, decisive & capable. Particularly during times of fear and uncertainty. The people around you will needs your leadership.

 

Be adaptive.

Stephen Hawking once said, “Intelligence is the ability to adapt to change”. A strong leader is intelligent and resilient and adapts their plans to fit the circumstances.

Knowledge may be power, but it’s wasted if you’re not able to adapt to changes in your industry and the job market. This is very timely, as Hawking suggests, intelligent leaders are able to see the changes coming, and adapt accordingly.

Be flexible and adaptive with your decision making, appreciate your existing plans and strategy may need to change or alternatively, you might need a completely new plan. Consider the changing needs of the market and your clients as you adapt existing plans or develop new frameworks.

Start thinking about your business in the future, how will it look, how do you get your business back on track? Develop a business recovery plan.

 

Tune out to the endless media hype regarding the Covid-19

We have spent the last 8 weeks going to work, helping clients survive during this extremely difficult time and arrive home each night to endless media speculation about the pandemic. After a while it becomes very disheartening. Do yourself a favour don’t watch the news everyday, have a glass of wine and do something that relaxes you and removes you for a couple of hours. This will help refresh you for the tasks ahead.

It’s important to focus your attention on what is important to you and your business. How can you support your team and create a resilient business? Working on a plan for your business will help you feel more in control of the future and focused on what you can do during this time. Set clear expectations for your team and objectives to assist them to navigate the uncertainty with a degree of clarity.

 

Empower your team

Communication is key to maintaining team cohesion and morale. Through times of change and uncertainty, communication is even more important to ensure an understanding of what is happening at both an organisational and individual level and to manage expectations. Whether it’s through regular check-ins to see how people are doing or collaborating on ideas for the future, you can empower your team to feel positive about the business, despite the challenges ahead. This is so important for the people you work with and customers, call them, show them you care.

 

Look after yourself

When we board an aeroplane, we receive instructions from the airhostess, their advice is to put your own oxygen mask on first in order to help others. In order to take care of others you need to take care of yourself first.
Take time to relax, spend time with your family and keep fit and healthy.

 

Tempestuous times can make good leaders great. As you rise to the challenge, provide a calm and composed direction into the future.

Commercial Leasing – Important Information 20th May 2020

Important Information on Commercial Leasing (COVID-19)

Many lessees and lessors are facing significant financial difficulty as a result of enforced closure of their businesses or a dramatic downturn in customers due to social distancing and work from home requirements.

On Tuesday 12th May 2020, the SA Government announced that changes would be made to the Covid-19 Emergency Response Act 2020 (COVID Act) in relation to matters involving commercial leases.

The Act and Regulations make various temporary modifications to the law of the State in relation to commercial leases in response to the COVID-19 pandemic including stopping evictions.

Under the amended COVID Act, the Government has increased powers to make regulations, if necessary, for the purposes of mitigating the adverse impacts on a party to, or any other person with an interest in, a commercial lease resulting from the COVID-19 pandemic.

New Regulations have commenced operation on 15 May 2020 to guide the negotiation, mediation and ultimately a Magistrates Court determination process.

The Regulations impose an obligation on lessees and lessors.

The specific wording of the Regulations Part 2 (6) provides:

The parties to a commercial lease and any guarantor or other person with an interest in the lease must make a genuine attempt to negotiate in good faith the rent payable under, and other terms of, the commercial lease during the prescribed period, having regard to:

(a) the economic impacts of the COVID-19 pandemic on the parties to the lease; and

(b) the provisions of the Act and these regulations; and

(c) the provisions of the National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 published on 7 April 2020.

A copy of the National Cabinet Mandatory Code of Conduct—SME Commercial Leasing Principles During COVID-19 published on 7 April 2020 can be found here.

 

Where a lessee is an affected lessee:

If a lessee is an affected lessee, a lessor cannot take any prescribed action against the lessee on grounds of a breach of a lease during the prescribed period consisting of:

  • a failure to pay rent; or
  • a failure to pay outgoings; or
  • the business operating under the lease not being open for business during the hours specified in the lease.

A lessee is an affected lessee if:

(a) the lessee is suffering financial hardship as a result of the COVID-19 pandemic; and

(b) the following turnover in a relevant year was less than $50 million:

(i) if the lessee is a franchisee—the turnover of the business conducted at the premises the subject of the commercial lease;

(ii) if the lessee is a corporation that is a member of a group—the turnover of the group;

(iii) in any other case—the turnover of the business conducted by the lessee at the premises the subject of the commercial lease.

Prescribed action means taking action under the provisions of a commercial lease or seeking orders or issuing proceedings in a court for any of the following:

  • eviction of the lessee from premises that is subject to a commercial lease;
  • exercising right of re-entry to premises that is subject to a commercial lease;
  • recovery of land;
  • distraint of goods;
  • forfeiture;
  • damages;
  • requiring a payment of an interest on unpaid rent otherwise payable by a lessee;
  • recovery of the whole or part of a security bond under the commercial lease;
  • performance of obligations by the lessee or any other person pursuant to a guarantee under the commercial lease;
  • possession;
  • termination of the commercial lease;
  • any other remedy available to a lessor against a lessee at common law or under South Australian law.

Prescribed period means the period beginning on 30th March 2020 and ending on 30th September 2020.

Unless otherwise agreed between the lessor and lessee, rent must not be increased during the prescribed period if the lessee is an affected lessee. Rent determined by turnover is excluded from this provision in the Regulations.

A lessor must not require an affected lessee to pay land tax or reimburse land tax if the lessee is suffering financial hardship as a result of the COVID-19 pandemic.

It Is important to note that leases entered into after 30 March 2020 are outside the Regulations, except for renewals or options to renew or extend an existing lease on the same or substantially similar terms.

The Regulations also provide for the situation that if the parties have agreed a variation or modification to the operation of the lease between 30 March 2020 and 15 May 2020, the Magistrates Court cannot make an order to vary the agreement during that period of time, but they can change the agreement going forward.

 

Negotiation and agreement is encouraged

As a first step, lessees and lessors are encouraged to commence discussions on any matters relating to leases including deferral and/or waiting of rent, rent free periods or any other modifications to leases which will help both parties through this difficult time.

The Small Business Commissioner has produced a guidance note for parties to a lease in relation to the provision of financial information to assist in negotiations. Download the Covid-19 Guidance Note – Commercial Information “requests” by Commercial Lessors Factsheet.

If agreement is reached, that agreement and any changes to the lease should be documented and executed by all parties.

If signing is not possible, parties should consider exchanging agreements electronically.

Parties are strongly advised to obtain their own independent expert advice – be that financial and/or legal – BEFORE committing to any changes in their lease arrangements.

 

What if you can’t agree – the Office of the Small Business Commissioner (OSBC) may be able to help

If parties to a commercial lease are unable to resolve their dispute, a lessor or an affected lessee may lodge a dispute on the Office of the Small Business Commissioner (OSBC) website.

An OSBC officer will contact the parties and, if appropriate, arrange for mediation. The Small Business Commissioner will allocate a mediator from his panel for this purpose.

There will be no cost to the parties for mediation. It is expected that parties will negotiate in good faith.

The mediation may be conducted in person, by video conference or teleconference or a mix thereof and parties should ensure they have access to a computer/mobile device for the mediation, if necessary.

Parties will be required to execute a mediation agreement prior to the mediation commencing and ultimately, if the mediation is successful, a legally binding settlement agreement will be made by the parties.

If the mediation process:

  • fails to achieve agreement or is unlikely to resolve the dispute; or
  • mediation would not be reasonable in the circumstances; or
  • a party refuses to participate or did not participate in good faith.

The Small Business Commissioner will issue a Mediation Certificate to both parties which is required BEFORE any action to resolve the matter can be commenced in the Magistrates Court.

Enquiries can be made to the Office of the Small Business Commissioner via email sasbc@sa.gov.au

For information on residential tenancies, contact Consumer and Business Services