Jobkeeper Payment Cycles

Jobkeeper Payment Cycles

Jobkeeper 1.0 and 2.1 run over 26 fortnights from 30 March 2020 to 28 March 2021. That is 26 Jobkeeper payment cycles. Here are the relevant dates.

Jobkeeper Payment Cycles

The first round of Jobkeeper – Jobkeeper 1.0 – covers two quarters: June and September 2020. Its modified extension – Jobkeeper 2.1 – covers two more quarters: December 2020 and March 2021.

Jobkeeper 1.0

Jobkeeper 1.0 started on 30 March 2020 and ran over 13 fortnightly payment cycles to 27 September 2020, paying $1,500 per fortnight per eligible employee.

1 – 30 March to 12 April 2020

2 – 13 April to 26 April 2020

3 – 27 April to 10 May 2020

4 – 11 May to 24 May 2020

5 – 25 May to 7 June 2020

6 – 8 June to 21 June 2020

7 – 22 June to 5 July 2020

8 – 6 July to 19 July 2020

9 – 20 July to 2 August 2020

10 – 3 August to 16 August 2020

11 – 17 August to 30 August 2020

12 – 31 August to 13 September 2020

13 – 14 September to 27 September 2020

So all up you should have received 13 payments of $1,500 per employee, so all up $19,500 per eligible employee.

Jobkeeper 2.1

Jobkeeper 2.1 started on 28 September 2020 and runs until 28 March 2021, but rates have dropped and will change halfway through again.

To be eligible as an employer from 28 September onwards you must have had an actual turnover drop of at least 30% in the September 2020 quarter. So no more projected turnovers. It is all based on actual turnovers now.

December Quarter

From 28 September 2020 to 3 January 2021 Jobkeeper has dropped to $1,200 per fortnight per eligible full-time employee and $850 per part-time employee.

14 – 28 September 2020 to 11 October 2020

15 – 12 October 2020 to 25 October 2020

16 – 26 October 2020 to 8 November 2020

17 – 9 November 2020 to 22 November 2020

18 – 23 November 2020 to 6 December 2020

19 – 7 December 2020 to 20 December 2020

20 – 21 December 2020 to 3 January 2021

March Quarter

From 4 January to 28 March 2021 Jobkeeper drops down to $1,000 and $600 per full-time and part-time employee respectively.

21 – 4 January to 17 January 2021

22 – 18 January to 31 January 2021

23 – 1 February to 14 February 2021

24 – 15 February to 28 February 2021

25 – 1 March to 14 March 2021

26 – 15 March to 28 March 2021

So these are the 26 Jobkeeper payment cycles.

 

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Jobkeeper 2.1

Take Cash Out Of Company

COVID-19 Help for Business

 

Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

How To Take Cash Out of Your Company

Take Cash Out Of Your Company

How to take cash out of your company without getting hit with a massive tax bill?

How To Take Cash Out of Your Company

Being a sole trader or partnership, one thing is really simple: taking cash out. No strings attached. Your business bank account is all yours. As a company, it it isn’t. 

Sole Trader and Partnership

As a sole trader or partnership, your business and you are one. Your business is not a separate legal entity, but part of you. So your business cash is your cash. 

How much you take doesn’t affect your tax position. You already paid tax on the business profits at your marginal tax rate.

Company

But all this changes in a company. Now you and your business are no longer one, but two. You are a legal entity. And your company is another. The company’s cash is no longer your cash.

So how do you take money out of your company? There are 5 ways and just those 5 – there is no other way.

1 – Wages

The company pays you a wage. Any PAYG withholding you receive back as a tax offset when you do your individual tax return.

Wages are included in your assessable income. So you pay tax on any wages you receive.

2 – Dividends

The company declares and pays you a dividend, hopefully with franking credits attached. Franking credits give you a refundable tax offset and hence are like cash. They are a refund of the tax the company already paid.

Dividends are included in your assessable income. So you pay tax on any dividends you receive, but with a tax offset for any franking credits.

3 – Shareholder Loan

You just take money out of the company and book it against shareholder or director loan. Or you pay private expenses from your company’s bank account. Nobody says that you can’t do that. You can.

But the crux is that unless you pay this back by the time your tax return is due, this loan will be treated as a dividend. So it gets included in your taxable income and you pay tax on it. Unless….you make it a Div 7A loan.

4 – Div 7A Loan

This is a common way to take money out of a company – for up to 7 or 15 years – without it hitting your individual tax return as income. You need a formal loan agreement and minimum yearly repayments of interest and principal.

But a Div 7A loan is only a temporary solution. In the end you have to pay it all back. And then your money is back in the company – looking for a new way out.

5 – Capital Distribution

Amounts sitting in your capital profits reserve, for example pre-CGT capital gains, are distributed as capital upon liquidation of your company.

Capital distributions receive generous tax concessions (50% CGT discount, small business CGT concessions), so you pay a lot less tax than if you had received this money as wages or dividends.

So that’s all you have. Those 5 ways. Does all this make sense? Just give me a call, if you get stuck.

 

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Jobkeeper 2.1

Help is Coming

COVID-19 Help for Business

 

Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Jobkeeper 2.0

Jobkeeper 2.1

The original Jobkeeper started on 30 March 2020 and will end on 27 September 2020. After that it will be Jobkeeper 2.1.

Jobkeeper 2.1

All is not lost. Jobkeeper 2.1 is coming, starting on 28 September 2020. But it will be harder to qualify for this one, since there are five changes.

1 – Split Between Full-Time and Part-Time

For Jobkeeper 1.0 all employees were treated the same. All received $1,500 per fortnight. 

This is changing for Jobkeeper 2.1. It will now distinguish between full-time and part-time employees.

Anybody who worked 20 hours or more per week in February 2020 counts as full-time. Everybody else is part-time.

So when you apply for the next round, you indicate which employees are full-time and which are part-time.

2 – Drop of Fortnightly Rate

During Jobkeeper 1.0 the fortnightly rate was $1,500 per eligible employee.

For full-time employees on Jobkeeper 2.1 this decreases to $1,200 for October to December 2020 and then to $1,000 from January to March 2021. For part-time employees Jobkeeper drops from $1,500 to $750 and then $650 per fortnight.

3 – Actual Past Turnover

The turnover test for Jobkeeper 1.0 was based on your projected turnover. You just gave it the best estimate you could. And if you got it wrong, that was ok. 

For Jobkeeper 2.1 there is no more guess work. Just actual numbers of what happened so far. After 27 September it no longer matters what you project. All depends on your actual quarterly turnover in the September 2020 quarter.

If the September 2020 quarter (and the December 202 quarter later on) had a drop of least 30%, you continue to qualify. 

4 – Continuous Test

For Jobkeeper 1.0 you just had to pass the turnover test once. It was like a door – once you got in, you were in.

For Jobkeeper 2.1 this changes to a continuous test per quarter. For each quarter, you have to show that the past 1 (later 2) quarters had suffered at least a 30% drop in turnover.

5 – New Employees

Everything we spoke about so far made things tougher for you. But this one is actually good news. This one means more money for you.

You can add any employees who were working for you as of 1 July to the Jobkeeper scheme and you can do this from 3 August 2020, so for the tail end of the first round of Jobkeeper.

For Jobkeeper 1.0 you could only offer Jobkeeper to employees who had been employees as of 12 March 2o20. So this date will change to 1 July for Jobkeeper from 3 August onwares.

———

So these are the five changes that come with Jobkeeper 2.1.

And just in case you are wondering, Jobkeeper 2.0 was announced on 21 July 2020 with further changes on 7 August, making it Jobkeeper 2.1.

Does all this make sense? Just give me a call if you get stuck.

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Tax on Cash Flow Boost and JobKeeper

Tax on Cash Flow Boost and JobKeeper

Do you need to pay any tax on the Cash Flow Boost and Jobkeeper payments your business receives?

Tax on Cash Flow Boost and JobKeeper

The short answer is No and Yes.

Cash Flow Boost

The cash flow boost is NANE. You include it in your tax return but under non-assessable non-exempt income. So you declare it but you don’t pay tax on it.

JobKeeper

The JobKeeper payment is assessable income for you as employer. But it is also a normal wage expense when you pass the payment on to your employees. So it basically just comes in and goes out, offsetting each other.

For your employees the JobKeeper payment is assessable income. And so you need to do PAYG withholding on these payments. You can’t withhold any admin fees or other charges on their payment, but you must withhold tax as required. 

ATO

The ATO knows exactly how much they paid you and so best to get this right. Otherwise they might start wondering what else you are not telling them.

Please call me if you get stuck. 

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

COVID-19 Help For Business

COVID-19 Help For Business

COVID-19 help for business – there are 16 measures to help you.

COVID-19 Help for Business

It is difficult to say which of the 16 measures will help you most. Probably the cash flow boost, Jobkeeper payment and the rent reduction under the Commercial Tenancies Code. But maybe all.

1 – Cash Flow Boost

The tax-free cash flow boost ranges from $20,000 to $100,000. It depends on the PAYG withholding you did in the March and June 2020 quarters. You need to be registered for PAYG withholding to qualify for this one. The size of your cash flow boost might depend on timing. 

2 – JobKeeper Payments

There are two groups who qualify – employers and business participants. Sole traders, company directors, partners and trust beneficiaries fall into the second group if they don’t pay themselves a wage. Jobkeeper 1.0 will change to Jobkeeper 2.1 from 28 September 2020.

3 – Commercial Tenancies Code

Under this Code of Conduct landlords can’t evict your business for failure to pay your lease. And they need to give you a rent reduction similar to your drop in turnover since the start of the crisis – half of which needs to be waived. So if your turnover dropped by 40%, they need to waive at least 20% and defer the rest interest-free.

4 – ATO Measures

There are 5 ATO measures to help you when your cashflow is tight due to the crisis:

1 – The due date for paying your BAS, PAYG I, income tax assessments and FBT as well as excise have been deferred by 4 months.

2 – If you expect a GST refund, you can swap to monthly BAS to get this refund much quicker into your pockets.

3 – You can vary your PAYG instalments to zero for this March quarter. And you can request a refund of the last two instalments you paid for the September and December quarters last year

4 – The ATO will remit any interest and penalties incurred after 23 January this year.

5 – And you can enter into a low-interest payment plan for existing tax liabilities.

5 – Easier Access to Bank Loans

It should get easier to get a loan thanks to a new $90b funding facility to banks – as in Approved Deposit Institutions (ADIs). ADIs can access this three-year fixed facility at a base rate of 0.25%, so compare that to the interest rate they want to charge you.  

6 – Easier Access to Loans from Non-Bank Lenders

You should also find it easier to get finance from non-bank lenders thanks to a $15 billion facility available to smaller ADIs and non-ADI lenders. This facility is managed by the Australian Office of Financial Management (AOFM).

7 – Six Month Deferral of Loan Repayment and Interest

If you find it hard to make repayments on your business loan, you can defer repayments and interest for six months between 1 April and 31 October 2020, provided you are a small business. 

8 – Government Guarantee of your Loan

The government guarantees 50% of new loans to small business of up to $250,000 for up to three years. This is called the SME Guarantee Scheme and is limited to loan amounts of up to $250,000. A bank needs to actively join this scheme and SMEs, including sole traders, only qualify if they have a turnover of up to $50m. The loans come with an initial six month repayment holiday.

9 – $150,000 Instant Asset Write-Off

The instant asset write-off is changing to $150,000 until the 30th of June 2020 for businesses with a turnover of less than $500m.

10 – Investment Incentive

The investment incentive, uncapped, until the 30 June 2021, allows a 50% depreciation in the first year for businesses with a turnover of less than $500m.

11 – 50% Wage Subsidy for Apprentices and Trainees

Employers of apprentices and trainees receive a 50% wage subsidy of their apprentice and trainee wages until 30 September 2020, of up to $21,000 per apprentice.

12 – Payroll Tax

All states and territories have introduced payroll tax relief to help you cope with the pandemic crisis. Here is what happened in NSW.

You receive a 25% discount on your annual tax liability for 2019/20. You can defer your payroll tax payments for up to 3 or 6 months depending on your total grouped Australian wages. And from 1 July 2020 your annual treshold increases to $1m.

13 – Small Business Support Grant

The states and territories have all issued support schemes for small business. In NSW small business who don’t pay payroll tax are to receive a $10,000 grant if they meet certain conditions. This scheme is not law yet.

14 – Increased Threshold for Creditor Action

The threshold at which creditors can issue a statutory demand on a company has temporarily been increased. And companies currently have longer to respond to such statutory demands they receive. The Corporations Act 2001 will be amended accordingly.

15 – Waiver of Director’s Liability

There is temporary relief for directors from any personal liability for trading while insolvent.

16 – Expansion of JobSeeker and Youth Allowance

Sole traders may now be eligible for JobSeeker Payment and Youth Allowance. Please see COVID-19 Help for Individuals for more details.

Please call me on 0407 909 779 or email if you get stuck.

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Instalment Activity Statement

Instalment Activity Statement

IAS stands for Instalment Activity Statement. Think of it as a gap filler when you don’t have to lodge a BAS for a certain period.

Instalment Activity Statement

The Instalment Activity Statement (IAS) covers PAYG instalments, PAYG withholding and ABN withholding. These three – nothing else. So no GST.

Your IAS comes in, when a particular period is not covered by your BAS. For example, when you report PAYG W on a monthly basis but your GST on a quarterly basis.

PAYG Instalments

The ATO will tell you whether, when and how much you need to pay in PAYG instalments on your so-called instalment income.

Your instalment income includes dividends, interest, profits you made as a sole trader or through a partnership and other income that is not subject to any other withholding, but excluding capital gains. 

PAYG Withholding

For PAYG withholding you are either a small, medium or large withholder depending on your PAYG withholding. 

As a small withholder (less than $25,000 of PAYG W) you report and pay quarterly – through your BAS if you report GST quarterly, otherwise your IAS.

As a medium withholder ($25k to $1m of PAYG W) you report and pay monthly – whether through your BAS or IAS depends on what you do for GST.

Large withholders (more tha $1m) are complicated, so let’s put those aside.

ABN Withholding

If a supplier does not provide an ABN to you for goods and services of more than $75 (excluding GST), you need to withhold the top rate of tax from the payment and report this through your IAS or BAS.

IAS v BAS

If you are not registered for GST, you don’t have any Business Activity Statements (BAS) to worry about. All your reporting is done through an IAS – either monthly, quarterly or annually.

But if you are registered for GST, then it gets more complicated, especially if your GST and PAYG instalments or withholding are on different reporting cycles.

You might do your BAS quarterly but might be a medium withholder for PAYG Withholding and hence need to report PAYG W on a monthly basis. In that case you do both. You lodge your BAS quarterly, but then lodge an IAS for the months in between.

Does this make sense so far? Just call me if you get stuck. My number is 0407 909 779. I am Heide.

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Common Tax and Accounting Muck Ups

Accounting Tips for Your Business

Avoid some common mistakes with these 15 accounting tips for your business. 

15 Accounting Tips For Your Business

When you start a new business, the last thing on your mind is accounting and tax. And you are right. Your focus needs to be on the road ahead.

But your numbers are still important. You lose control without them. The good news is that this is not as hard as it sounds.

Here are 15 tips to help you get and keep what is yours. And avoid a few potholes along the way.

1 – Put a Value on Your Time

You only got 24 hours. And what you don’t do is as important as what you do. So delegate the parts that are not worth your time. 

2 – Get Xero

There are various accounting softwares around, but just go with the flow and get Xero. You will be glad you did.

3 – Collect Receipts

Missing receipts can cost you a lot of money later on. So best to stay on top. Just download Hubdoc – a receipt app that comes free with Xero.

4 – Get a Bank Feed

A bank feed will save you time and give you up-to-date numbers. Allowing you to focus on more important things.

5 – Get a Business Bank Account

Using just one bank account for both business and private turns messy very quickly. So get a free business bank account – for example with NAB.

6 – Register for GST on time

Register for GST when your forecasted turnover exceeds $75,000. The good news is that you get to claim the GST you pay.

7 – Treat Employees as Employees

Treat your employees as employees. It is tempting to treat them as contractors, but not worth the penalties and headaches.

8 – Pay SG and Wages On Time

The ATO is really tough around your employees’ super. So pay their super and wages first when cash flow is tight.

9 – Get Workers Insurance

Easy to miss but make sure your employees are ensured while working for you. So get the right policy from icare – might save you tons later.

10 – Lodge And Defer

Lodge your tax returns on time, even if your cash flow is tight. And then let’s talk to the ATO about a payment plan and remission of interest.

11 – Safeguard Your Losses

Your business’ tax losses might safe you tax later on, but are also easily lost. Please call me before you change your business structure.

12 – Weigh Up ATO v Bank

The ATO charges higher interest rates than banks. But is also more likely to forgive this interest for the right reasons. So let’s talk this through.

13 – Mind the PSI Rules

If your business depends on your personal skills and efforts, let’s discuss the personal services income (PSI) rules to avoid any potholes.

14 – Claim Car and Travel Expenses

When you use a car or travel for business or work, make sure you claim what is yours. Easy to leave money on the table with this one.

15 – Get and Keep What is Yours

There are many ways to save tax and make you better off. From discounts and conscessions over deductions and write offs to grants and structures. Make sure you get and keep what is yours.

This is just a short overview. Please call me to talk this through.

 

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Disclaimer: numba does not provide specific financial, legal or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax or legal advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Small Business CGT Concessions

This overview of small business CGT concessions will give you a rough road map of the most generous concession for small business in Australia. 

Small Business CGT Concessions

Imagine the small business CGT concessions didn’t exist. Let’s say you have a small business. And your business is your life. Started from scratch 30 years ago. Risked the family home during the GFC for it. Risked everything. Gave dozens of people good steady jobs. Was part of the engine that drives Australia.

Now you get an offer to sell with a $1m capital gain. How much do you get to keep? 53% – the ATO will take the other 47%, assuming that you have other income and the capital gain fully hits the top marginal tax rate.

Doesn’t feel right. So can you see why we need the small business CGT concessions? To make sure your life’s work doesn’t evaporate in tax. If you qualify, you will pay little or no tax. It can change your life.

Do You Qualify In Principle?

The small business CGT concessions are very generous. But to qualify you have to pass three hurdles. 

Hurdle # 1   Basic Conditions

The basic conditions are your first hurdle. To pass these basic conditions, you need to meet one of 4 conditions – A, B, C or D. It is an either-or proposition. If you fail one, you can still get through with another.

A – Turnover 

You need to carry on a business and have a turnover of less than $2m. This is called the small business turnover test. If you don’t pass it, just keep going. Maybe you pass the net asset value test.

B – Net Asset Value 

You pass the maximum net asset value test, if you have net assets of $6m or less. Your net assets include your interest in the business you sell as well as certain assets of your affiliates and connected entities. But your net assets don’t include your main residence, personal use assets and superannuation for this test.

C – Partnership

If the asset you sell is a partnership asset, then the partnership as a whole must carry on a business and meet the turnover test. If that fails, then the your proportionate share of the partnership will go into your net asset value test under B.

D – Passively Held

If the asset is passively held and used by an associate or connected entity in a small business entity, you pass.

You only need to pass one of these four. Take a capital intensive business like a farm as an example. It might hold land worth more than $6m, but have a turnover of less than $2m, and hence qualify.

Hurdle # 2     Active Asset Test

The active asset test is your second hurdle. You need to always pass this test. This means that the asset must have been part of your business. ‘Used or held ready for use’ is the term they use.

Hurdle # 3      Shares or Units

And the third hurdle only applies if shares or units are involved. If they are not, skip this one. You are done.

If your set up includes shares or units, then this turns into a different ball game. It will get a lot more complicated. How this all works is a long story that we will cover later.  So for now let’s just assume that no shares or units are involved. That you are a sole trader selling your business. 

Do You Qualify For a Specific Exemption?

So you qualified in principle. But what do you actually get? It depends which specific concession you qualify for.

 There are 4 small business CGT concessions. Each of these four is unique with its own set of rules and requirements. Would be boring otherwise. And how you combine these four is important as well and might result in different tax outcomes.

Subdiv 152-B    15-Year Exemption

The first and most generous exemption is the 15-year exemption. It is unique in that it exempts the entire capital gain without any cap. Think about that. The entire capital gain: Tax-free.

This exemption takes priority over the other three exemptions. And it applies before any capital loss offset. So you can keep your capital losses and still get the entire capital gain tax-free.

But to pass you must have owned the asset for at least 15 years and be at least 55 years old. 

And the CGT event must happen in connection with your retirement or permanent incapacitation. What is or isn’t “in connection with your retirement” is often a point of contention though.

If you qualify for the 15-year exemption, you can stop reading here. Anything that comes after this won’t affect you anymore since your entire capital gain is disregarded. This exemption has priority. If you qualify, it applies whether you like it or not. But we have never met a living soul who doesn’t like this one.

Subdiv 152-C   50% Reduction 

This one is easy. The moment you pass the basic conditions, you have this one in your pocket. You don’t have to apply it but you can.

The 50% reduction allows you to reduce a capital gain by a further 50%. Why further? Because you probably already got the 50% CGT discount if you held the asset for at least 12 months.

So now in addition you get the 50% small business reduction when you pass the basic condition. And after that you can still apply the other two exemption, hopefully reducing your capital gain to zero.

Subdiv 152-D    Retirement Exemption

This one is also easy even though it comes with slightly more fineprint. You can claim a capital gain of up to $500,00 as exempt. But not more – ever. That is the lifetime cap.

And there is one more catch. If you are under 55, you have to pay the exempted amount into super. Some people don’t like that. And so they skip this one or park it. The secret word is J5. Sounds confusing – I know.

Here is an example how this works out in conjunction with the 50% reduction.  Let’s say the capital gain is $4m. The 50% CGT discount brings it down to $2m. The 50% reduction brings it down to $1m. And then you and your spouse claim $500,000 retirement exemption each. And voila. You walk away with $4m tax-free in your pocket. Not bad.

Subdiv 152-E  Rollover 

This one will buy you time. Your capital gain is not disregarded just yet, but you defer paying tax on it.

This rollover relief allows you to defer the capital gain for at least two years or beyond two years if you acquire a replacement active asset or incur capital expenditure on active assets. You can choose to rollover the entire capital gain or just a portion after the 50% reduction and retirement exemption. The decision is yours.

If you don’t acquire a replacement asset withing the 2 years, you trigger CGT event J5. But guess what? That might be exactly what you had inteded.

By now you might be 55 and no longer have to put the retirement exemption into super. So now you apply the retirement exemption and walk away with the cash tax-free. 

So that was a quick small business CGT concession overview to give you a rough idea. To show you what is possible.

But don’t give up if this sounds too confusing. Just ask your accountant or ask us. My number is 0407 909 779 – just call me. I am Heide Robson.

 

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Disclaimer: numba does not provide specific financial, legal or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax or legal advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Help is Coming

Help is coming. Not a lot. But hopefully enough.

Help Is Coming

The federal and state governments, ATO and Reserve Bank are all implementing measures to help your business cope with COVID-19. Here is what should be coming your way – current as of 14 April 2020.

Federal

Here is what is on the table:

1 Job Keeper Payment

$1,500 per fortnight for each full-time, part-time and long-term casual employee.

2 – 50% Cash Flow Boost

Cash flow boost of at least $20,000 up to $100,000 depending on your PAYG withholding from Jan to June 2020;

3 –  Instant Asset Write-Off

An instant asset write-off of $150,000 until 30 June 2020;

4 – Investment Incentive

50% deduction for any asset purchased by 30 June 2021;

5  – Apprentice and Trainee Wage Subsidy

50% wage subsidy for apprentice and trainee wages til 30 Sep 2020

NSW

All Australian states and territories have announced COVID-19 stimulus packages. Here is what NSW offers:

6 – Waiver of payroll tax

No payroll tax from 1 April to 30 June 2020;

7 – Raise of payroll threshold

The payroll tax threshold increases to $1m from 1 July 2020.

8 – Small Business Support Grant

Up to $10,000 for businesses that are not subject to payroll tax.

ATO

The ATO has announced that you can request a:

9 – Reduction of PAYG instalment for the March quarter to nil

10 – Refund of PAYG instalments already paid for this financial year.

11 – 4-months deferral of BAS, PAYG I, FBT and excise payments

Reserve Bank

And the Reserve Bank of Australia (RBA) is trying to get you the finance you need at an affordable interest rate, so that you can receive:

12 – Rate cut via your bank due to a cut of the RBA rate

13 – Extra funding through your bank from a $90b funding facility

14 – Extra funding from non-bank lenders from a $15bn funding facility

Australian Banking Association

15 – Banks are not to push for repayment of $100bn in business loans. 

The above is only a short summary, but a lot of the if and when won’t affect you, for example the $500m turnover threshold.

Just call me on 0407 909 779 if you want to talk this through.

 

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Cloud Accounting Software

Cloud Accounting Software

Moving to a cloud accounting software won’t be the most important decision you will ever make for your business. But it will set the tone.

Cloud Accounting Software

“The Cloud” sounds complicated and high up in the sky. How can software ‘live’ up there? 

The Cloud is Just Somebody Else’s Server

It doesn’t. Cloud is just another word for somebody else’s server. It just means that the software is no longer stored on your but their server. 

Think of online banking. When you log into your bank account, you really log into the bank’s server. And the same is true for your cloud accounting software: When you log into your account with Xero, you log into Xero’s server (or server space Xero rents). 

Is it safe? It is as safe as online banking. So for most of us that is safe enough.

Which Software

In Australia Xero is currently the market leader. Not because it is perfect. But because right now it is the best solution for many with the largest range of integrated apps.

A lot of established Australian businesses use MYOB because that used to be the most popular accounting software in Australia – when software still lived on your desktop or server – and so they stayed with MYOB – for now.

Then there is Quickbooks, Sage, Handisoft, Reckon and a few more. All these charge a fee.

But there are also some free softwares out there. The most popular one is Wave. Not ideal, but definitely better than an Excel Spreadsheet.

Why the Cloud

Why not just stick to the software you have on your desktop? Why move into the cloud?  Here are 12 reasons why.

1 – Bank Feed

Bank feeds are easy in the cloud. You will never ever have to key or manually upload your bank transactions again. It is all there.

2 – Bank Rules

You set a rule how you want a certain transaction to be booked. And then the software does this for you. Will save you time.

3 – Software Updates

In the cloud, you no longer need to load new software onto your computer or deal with different versions. It all happens seamlessly behind the scene.

4 – Monthly Fee

You no longer pay upfront to get your software package. You just pay a monthly fee – much easier on your cash flow.

5 – No Lock In

You can switch from one software to another. It may be tedious, but you are no longer locked into a contract.

6 – Access from Anywhere

You don’t need to be at your computer to see what is happening in your business. You can check your data from anywhere in the world.

7 – Team Work

Others can work on your accounts without you having to send files backwards and forwards. It all sits in the cloud.

8 – Invoicing

If your supplier or clients are on Xero, you can send and receive invoices straight from one accounts receivable and payable to the other.

9 – Payment

With the right set up, your customers and clients can pay your invoice directly through the click of a button on your invoice.

10 – Payroll

If you have employees, you need to transfer to Single Touch Payroll (STP) and that really only works in the cloud.

11 – Backups

In the cloud you don’t worry about backups. Your software provider does.

12 – Customisation

You can tailor the apps around your accounting software to the exact solution you need.  Like building a house with lego blocks. 

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So this is our homage to the cloud. A huge step forward. Got stuck? Just call me on 0407 909 779. I am Heide.

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Disclaimer: numba does not provide specific financial, legal or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax or legal advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.