$250k loans – Qld Government

Applications are now open for the Queensland State Government’s COVID-19 Jobs Support Loans.

Loan features

The loan features are as follows:

  • $500 million loan scheme
  • Maximum loan amount for these loans is 50% of your operation’s annual wage expense (to a maximum of $250,000)
  • No repayments or interest charged for the first year
  • Plus two years interest only (so principal and interest repayments will start in the third year)
  • 2.5% fixed interest rate
  • 10-year term of loan
  • Unsecured up to $100,000. Loans over $100,000 will need a General Security Agreement (which is a general charge over business assets)
  • You can apply more than once but in total you cannot borrow more than the maximum loan amount
  • Business owners without employees may also be eligible (provided they work hours in the business equal to at least one full time equivalent employee (35 hours per week))
  • Open until 25 September 2020 or until funding is fully committed

Eligibility

To be eligible loan applicants must:

  • Be an eligible business which holds an ABN and is registered for GST
  • Have one or more equivalent full-time employees in Queensland
  • Have operated the business since 1 July 2017
  • Have suffered a loss as a result of COVID-19
  • Be viable under normal business conditions
  • Be able to service the loan under normal business conditions
  • Intend to continue operations after receiving the loan
  • Intend to use any surplus liquid reserves or normal credit sources up to normal credit limits, in conjunction with the loan to continue operations.

Application information

 
You will need to provide the following information when applying for the loan:

  • Business financial statements for the 2017-18 and 2018-19 financial years
  • Personal taxation returns for 2017-18 and 2018-19
  • Bank account information
  • Australian Taxation Office Integrated Client Account Statements
  • Aged list of debtors and creditors at time of application
  • Applicant information
  • Organisation Constitution or Rules of Association and Certificate of Incorporation (if applying as a non-profit organisation)
  • Trust deed (if applying as a trust)

How loan may be used

The loans may be used to meet working capital expenses, for example:

  • Paying employee wages
  • Paying creditors and existing business loan and equipment finance payments
  • Paying rent and rates
  • Buying goods (including fuel) for the purposes of carrying on the business.

The loan cannot be used for:

  • refinancing existing business loans or equipment finance;
  • purchasing new equipment or other assets.

Where to apply?

You can apply now via QRIDA: http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme

DISCLAIMER: The information in this article is general in nature and is
not a substitute for professional advice.  Accordingly, neither TJN
Accountants nor any member or employee of TJN Accountants accepts any
responsibility for any loss, however caused, as a result of reliance on
this general information.  We recommend that our formal advice be sought
before acting in any of the areas.  The article is issued as a helpful
guide to clients and for their private information.  Therefore it should
be regarded as confidential and not be made available to any person
without our consent.

Qld Government – COVID-19 economic relief package

The Queensland government have released a more comprehensive economic relief package for COVID-19.

This is in additional to their initial release on 17 March 2020: https://www.tjnaccountants.com.au/qld-government-coronavirus-industry-recover-package/

Payroll tax relief

Small and medium businesses

Small and medium businesses (payroll up to $6.5 million) in Queensland will be eligible for:

  • A two-month refund of payroll tax (November and December 2019 payroll tax returns);
  • A three-month payroll tax holiday (January, February and March 2020).

All payroll tax payments can be deferred for the rest of 2020

Large businesses

Large businesses (payroll over $6.5 million) will be eligible for the two-month payroll tax refund (January and February 2020) and have their deferral extended for all of 2020.

How to apply for the payroll tax refund

You can apply for a refund of the payroll tax via the online portal at www.business.qld.gov.au.

The refund will be paid within 48 hours of you completing all the required steps. Applications must be made before 31 May 2020

Other support for business

Other support announced for business includes:

  • Relief for businesses renting government premises;
  • $500 rebate on electricity bills for all Queensland small and medium sized businesses that consume less than 100,000 kilowatt hours (this will be automatically applied to bills)
  • Liquor licensing fees waived for business impacted by enforced safety industry shutdowns.

Household support

Households will be eligible for a $200 rebate to offset the cost of water and electricity bills. This will automatically be applied through household electricity bills.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

COVID-19 – Additional Economic Stimulus package

Today the Federal Government announced further economic stimulus measures in an attempt to help small businesses survive the economic impact of COVID-19. Below are details of these additional measures.

Our earlier articles in relation to the stimulus measures can be accessed here:

Big 4 Banks response to COVID-19 (20/3/20)

Queensland Government – COVID-19 response (17/3/20)

Federal Government – Initial Stimulus package (13/3/20)

Tax-free cash payments – up to $100,000

Today the Government expanded the previously announced PAYG withholding measures. Eligible businesses will be entitled to a rebate of 100% of the taxes withheld on employees’ salary and wages. The minimum rebate entitlement will be $10,000 up to a maximum of $100,000.

Eligibility

To be eligible for the PAYG withholding rebate, a business must:

  • Have turnover under $50 million (generally based on prior year turnover);
  • Be an active employer established prior to 12 March 2020.

Boosting Cash Flow for Employer Payments

100% of the tax withheld on salary and wages will be rebated up to a maximum of $50,000 for the period from January to June 2020. The minimum rebate for this period will be $10,000. This rebate is a tax free payment and is automatically calculated by the ATO.

Additional payment

An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the Boosting Cash Flow for Employers payment they have received in the January to June 2020 period (outlined above).

Summary

Overall, eligible businesses may receive tax free payments of between $10,000 and $100,000 over the period January to September 2020.

Bank loan guarantee scheme

The Federal Government will guarantee half of a bank loan to small and medium business. Businesses with a turnover under $50 million will be eligible for the guarantee and it will apply to loans granted within six months, starting 1 April 2020.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • Maximum total loan of $250,000 per borrower;
  • The loan is up to 3 years, with an initial 6 month repayment holiday;
  • The loan is in the form of unsecured finance, meaning borrowers will not have to provide an asset as security for the loan.

Insolvency and bankruptcy flexibility

The Government announced greater flexibility in the insolvency and bankruptcy requirements, including:

  • Temporarily increasing the threshold at which creditors can issue a statutory demand on a company (from $2,000 to $20,000) and the time companies have to respond to statutory demands (from 21 days to 6 months);
  • Temporarily increasing the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings (from $5,000 to $20,000);
  • Temporarily increasing the time a debtor has to respond to a bankruptcy notice (from 21 days to 6 months);
  • Temporary relief from directors’ personal liability for trading while insolvent (though egregious cases of dishonesty and fraud will still be subject to criminal penalties). Any debts incurred by the company will still be payable by the company;

Relief for individuals

The Government also announced additional relief for individuals.

Coronavirus Supplement

A new time-limited Coronavirus supplement is to be paid at a rate of $550 per fortnight (paid to existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit).

Househouse Support

The Government will be providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders.

Temporary Early Release of Superannuation

Individuals affected by Coronavirus will be allowed to access up to $10,000 of their superannuation in 2019-20 and a futher $10,000 in 2020-21. These payments will be tax-free and will not affect Centrelink or Veterans’ Affairs payments.

Temporary Reduction to Superannuation Minimum Drawdowns

The minimum pension drawdowns for superannuation will be reduced by 50% for the 2019-20 and 2020-21 financial years.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Big 4 Banks – response to COVID-19

Today the banking industry announced their response to help small businesses affected by COVID-19 (and they indicated that more relief will be coming for residential mortgages).

We note that NAB have also announced measures for personal customers.

Below we have summarised the initiatives announced by the Big 4 banks.  Other lenders will also be providing support packages.  Please contact your bank immediately if you need financial assistance for your business.

As always, please feel free to contact us if you want to discuss the impact of COVID-19 on your business.

Westpac

The COVID-19 support measures announced on the Westpac website include:

* Fee free redraws;
* Business loan deferred repayments up to 3 months;
* Option to extend business loan terms by up to 3 months;
* Restructuring and consolidating loans;
* Access to term deposit funds without reduction in interest rate;
* Deferred payments for business credit cards;
* Business financial counselling access;
* Merchant terminal rental fee waivers for up to 3 months;
* $0 establishment fee for equipment finance loans.

Westpac has indicated that Westpac Assist may be able to help any customer experiencing financial hardship at any time.

To find out more information, please speak with your Westpac Relationship Manager or call Westpac on 1800 067 497.

Commonwealth Bank

The Commonwealth’s bank response includes:

* Reducing rates on Better Business Loans, Business Overdrafts and other products by 25 basis points, effective as at 24 March 2020;
* Deferring repayments on business loan and overdraft products, for 90 days;
* Waiving merchant terminal fees for impacted customers with CommBank merchant terminals, for 90 days;
* Waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts);
* Waiving establishment fees and excess interest on Temporary Excess products;
* Deferring repayments on vehicle and equipment finance loans, and providing tailored restructuring options that meet individual customer needs.

If you have a Relationship Manager, they will be able to assist you at this time.  Otherwise you can contact a dedicated Business Financial Assistance team member on 13 26 07 (open 24 hours 7 days a week).

National Australia Bank

NAB business customers experiencing financial difficulty are able to:

 * Defer principal and interest for up to six months on a range of business loans, including floating and variable rates and equipment finance loans;
* Receive an interest rate cut on QuickBiz loans and overdrafts, effective March 30;
* Receive an interest rate cut on variable rates for small business loans, effective March 30;
* Access up to $65 billion of additional secured limits to pre-assessed customers, with $7 billion currently available for fast assessment process;
* Access up to $9 billion in additional limits for unsecured lending for existing customers via QuickBiz;
* Defer business credit cards repayments.

Business customers should contact their relationship banker or call the Business Banking support team on 13 10 12 for further assistance.

NAB personal customers experiencing financial difficulty are able to:

* Pause home loan repayments for up to six months, including a three-month checkpoint (for a customer with a typical home loan of $400,000, this will mean access to an additional $11,006 over six months, or $1,834 per month);
* Access fixed home loan rates of 2.39% p.a. for 1-year, 2.29% p.a. for 2- and 3-years, and 2.79% p.a. for 5-year (owner-occupied, P&I), effective March 30.  First home buyers will have access to a rate of 2.19% p.a., fixed for two years.
* Access funds in loan redraw accounts and offset accounts;
* Reduce repyaments on variable rate loans;
* Access a 10-month term deposit rate of 1.70% pa for 10 months, effective March 24.  This is for personal customers only, with deposits of $5,000 to $2 million.

Personal customers can submit a request for online support or can call 1300 683 106 if they require further assistance.

ANZ

Financial support for ANZ customers includes:

* Suspending interest repayments;
* Early access to term deposits without incurring break fees;
* Access to additional credit subject to approval.

Please contact ANZ or your relationship manager if you have been affected by the financial impacts of COVID-19.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Qld Government – Coronavirus Industry Recovery Package

$500 million loan facility

On 17 March 2020, the Palaszczuk Government announced they would create a $500 million loan facility, interest free for the first 12 months, to support small businesses to keep Queenslanders in work.

Deputy Premier and Treasurer Jackie Trad said the $500 million concessional loan facility would comprise loans of up to $250,000 with an initial 12-month interest free period for businesses to retain staff.

See our separate article regarding the loan facility.

Payroll tax

Queensland payroll tax returns are not due for lodgement or payment before 31 July 2020.

Return period Normal due date Deferred due date
February 9 March 2020 3 August 2020
March 7 April 2020 3 August 2020
Jan- Mar quarter 7 April 2020 3 August 2020
April 7 April 2020 3 August 2020
May 8 June 2020 3 August 2020
2019-20 annual 21 July 2020 3 August 2020

During this time if you want, you can lodge your returns but not pay them – this may help you keep track of your liabilities. You can also choose to continue lodging and paying as usual.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Coronavirus economic stimulus package

Economicstimulus

Yesterday the Federal Government announced an economic stimulus package designed to protect our economy from the impact of the
Coronavirus by maintaining confidence, supporting investment and keeping people in jobs.

Please find below a summary of these measures and how they may apply to you and your business.  Please call us to discuss how
these specific measures may impact on you.

We also urge you to contact us immediately if you are experiencing financial hardship.  We will help to address your concerns, assess
the situation and put in place an action plan to mitigate further loss.

Instant asset write-off

Immediate deduction for assets costing < $150,000
(Applies: 12 March 2020 to 30 June 2020)

Currently, eligible businesses can claim an immediate tax deduction for the purchase of assets up to $30,000.  Under the stimulus
package, this threshold will be immediately increased to $150,000 until 30 June 2020. This applies to the acquisition of new or
second-hand assets.

50% upfront deduction for new assets
(Applies: 12 March 2020 to 30 June 2021)

Where eligible businesses can’t claim an immediate deduction for an asset (either it cost more than $150,000 or it was purchased after 30 June 2020), they may be eligible for an upfront deduction of 50% of the cost of the asset (with existing depreciation rules applying
to the balance).  This measure only applies to the acquisition of new assets and does not apply to second-hand assets or buildings.

Who will benefit?

Businesses that are looking to buy plant and equipment within the next 15 months.

Effect of measure

It will bring forward a tax deduction for the cost of the asset (or part of the cost of the asset).For most companies, this will bring
forward tax relief equal to 27.5% of the cost.   

Example

On 1 May 2020, a company buys a second-hand tractor for $140,000 (excluding GST) for use in its business.

Under the existing rules, in the 2019/20 financial year the company could claim a tax deduction of $3,899 (assuming the tractor had a
12 year life and the business used the diminishing value method of depreciation).  This is a tax benefit of $1,072 in the 2019/20
financial year (assuming a tax rate of 27.5%).

Under the stimulus package, in the current financial year the company could immediately claim the full $140,000 as a tax deduction. 
This is a tax benefit of $38,500 in the 2019/20 financial year.

Consequently, the company will pay $37,428 less tax in the 2019/20 financial year.

PAYG Withholding – Cash Back

Businesses that withhold tax on employees’ salary and wages will receive a payment equal to 50 per cent of the tax withheld on wages up to a maximum payment of $25,000.  The minimum payment an employer will receive is $2,000 (even if they are not required to
withhold tax on employee wages).

The “payment” from the Government will be recorded initially as a credit to the business upon lodgement of their activity statement.  If
this places the business in a refund position, the ATO will deliver the refund within 14 days.

Quarterly BAS lodger – example

If you lodge your BAS quarterly, and you employ staff, you will be eligible for a credit against your March 2020 and June 2020 BAS
equal to half of your PAYG withholding obligations (up to a total of $25,000).

For example, if you reported PAYG withholding of $4,570 in your March 2020 BAS and $5,000 in your June 2020 BAS, you will receive a credit of $2,285 against your March 2020 BAS (50% x $4,570) and $2,500 against your June 2020 BAS (50% x $5,000).

Alternatively, if you reported PAYG withholding of $57,000 in your March 2020 BAS and $55,000 in your June 2020 BAS, you will
receive a credit of $25,000 against your March 2020 BAS (although 50% of your PAYG withholding for the March quarter is $28,500
you can only claim a maximum credit of $25,000).  In the June 2020 BAS you will not be entitled to any credit as you reached the
$25,000 cap in the March 2020 quarter.

Monthly BAS lodger – example

If you lodge your BAS monthly, and you employ staff, you will be eligible for a credit against your March 2020, April 2020, May 2020
and June 2020 BAS.  To ensure monthly lodgers receive the same benefit as the quarterly lodgers, the March 2020 BAS will be
multiplied by 3 and then half of this will be credited.

For example, if you withhold $5,000 per month for your employees, in March, you will be eligible for a credit of $7,500 ($5,000 per
month x 3 months x 50%).  In April, May and June, you will be eligible for a credit of $2,500 per month.

Employers without PAYG withholding

Some employers do not need to withhold tax for their employees as they are below the tax-free threshold.  That is, the employer is
required to lodge a BAS and report their gross wages but do not have any PAYG withholding.  In this situation, the employer will still
receive a minimum payment from the Government of $2,000. 

Subsidies for apprentices and trainees

Eligible employers can apply for a wage subsidy of 50% of an apprentice’s or trainee’s wage paid between 1 January 2020 and 30
September 2020 (up to a maximum of $21,000 per eligible apprentice or trainee – that is, $7,000 per quarter).

Eligibility

The subsidy will only apply where the following conditions are met:

  • the small business employs fewer than 20 full-time employees
  • the small business has apprentices or trainees
  • the apprentice or trainee must have been in training with a small business as at 1 March 2020.
 Timing
 
Employers can register for the subsidy from early April 2020 with final claims to be lodged by 31 December 2020.

Household stimulus payments

A one-off $750 payment will be made to around 6.5 million eligible recipients.  The payment will be exempt from tax and will not count as income for social security purposes. The one-off payment will be made automatically from 31 March 2020. Over 90 per cent of the
payments will be made by mid-April 2020.

Eligibility

To be eligible, you must be residing in Australia and be receiving one of the following payments or hold one of the following concession
cards as at 12 March 2020:

  • Age Pension
  • Disability Support Pension
  • Carer Payment
  • Parenting Payment
  • Wife Pension
  • Widow B Pension
  • ABSTUDY (Living Allowance)
  • Austudy
  • Bereavement Allowance
  • Newstart Allowance
  • Youth Allowance
  • Partner Allowance
  • Sickness Allowance
  • Special Benefit
  • Widow Allowance
  • Family Tax Benefit, including Double Orphan Pension
  • Carer Allowance
  • Pensioner Concession Card holders
  • Commonwealth Seniors Health Card holders
  • Veteran Service Pension; Veteran Income Support Supplement; Veteran Compensation payments; War Widow(er) Pension; and Veteran Payment
  • Veteran Gold Card holders
  • Farm Household Allowance

Assistance for severely affected regions

The Federal Government has set aside an initial $1 billion to support the regions and communities that have been disproportionately
affected by the economic impacts of Coronavirus. In particular, it will include those areas heavily reliant on tourism, agriculture and
education.

Some of these initial measures include:

  • Waiver of fees for tourism businesses to operate in national parks and marine parks;
  • Administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak (assessed on a case-by-case basis).

Other measures

The ATO will also be implementing a number of administrative measures to assist taxpayers facing financial difficulty as a result of
Coronavirus.  Available options include:

  • deferring by up to four months the payment date of amounts due through the business activity statement, income tax assessments, FBT assessments and excise
  • allowing businesses on a quarterly reporting cycle to opt for monthly reporting to get quicker access to GST refunds
  • allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter (and claiming a refund for the instalments made for the September 2019 and December 2019 quarter)
  • remitting any penalties and interest, incurred on or after 23 January 2020, that have been applied to tax liabilities
  • working with businesses to help them pay their existing and ongoing tax liabilities.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN
Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of
reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is
issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made
available to any person without our consent.

Queensland State Budget 2019-20

The Queensland State Budget was handed down on 11 June 2019. 

We have outlined below some of the changes that will affect Queensland businesses.

Payroll tax

 

The following changes are proposed for payroll tax:

 

  • The payroll tax tax-free threshold will increase from $1.1 million to $1.3 million.  This means that approximately 1,500 businesses will no longer have to pay payroll tax.

 

  • The payroll tax rate for businesses with payroll up to $6.5 million will remain at 4.75%.

 

  • The payroll tax rate for businesses with payroll above $6.5 million will increase to 4.95% (up 0.2%).

 

  • There is a payroll tax discount of 1% for regional businesses (that is, businesses with a registered business address in a regional area and where 85% of taxable wages are paid to employees who reside in regional Queensland).

 

  • A rebate of payroll tax of up to $20,000 is also available to employers who have a net growth in full-time employees over a year.

 

  • The budget also provided two more years of the Apprentice and Trainee payroll tax rebate (which is paid at 50% of the apprentice and trainee wages).

 

Land tax

 

From 30 June 2019, land tax rates will increase as follows:

 

  • for companies and trusts with landholdings of more than $5 million but less than $10 million – the rate increases to 2.25%

 

  • for companies and trusts with landholdings of more than $10 million – the rate increases to 2.75%.

 

Australian citizens and permanent residents living overseas will now be assessed as resident individuals from 30 June 2019 (so they will benefit from the higher tax-free threshold and lower rates of land tax that apply to resident individuals).

 

The absentee surcharge will increase to 2%.  This applies to foreign individuals who own land and do not ordinarily reside in Australia (except for Australian citizens and permanent residents).

 

From 30 June 2019, a new land tax foreign surcharge of 2% will apply to foreign companies and trustees of foreign trusts that own land.  The surcharge will apply to the portion of the taxable value of the land that is over $350,000.

If you would like to discuss the impact of the Queensland state budget on your business, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

2019 End of Year Tax Planning

Now is the time for taxpayers to consider their current tax positions to see if there are steps they can take to minimise their tax liability prior to 30 June. 

We have outlined below some of the main tax planning ideas that you can consider.

$30,000 instant asset write-off for businesses

The instant asset write-off threshold for businesses has increased to $30,000.  There are different eligibility criteria and write-off thresholds throughout the 2019 financial year.  We have summarised these criteria here.  If you want to take advantage of the instant asset write-off, you will need to make sure you acquire the asset prior to 30 June.

 

Employee superannuation

The June quarter superannuation guarantee liability is required to be paid by 28 July.  However, a business can only claim a tax deduction for employees superannuation when it is actually paid.  As such, to ensure you get the deduction in the current year, we recommend that you pay your employees’ June superannuation guarantee liability prior to 30 June (cashflow permitting).  We recommend that the payment be made by 20 June (to ensure it is processed by the recipient superfund).  If you use the ATO’s superannuation clearing house, they have recommended paying no later than 24 June.

 

Personal superannuation

You may also want to make personal contributions to super.  For the 2018/19 financial year, the maximum concessional (deducted) contribution is $25,000.

Please call us if you are considering making personal contributions superannuation to check whether:  

(a) you can claim a tax deduction for making personal contributions

(b) how much you may be able to claim as a deduction

(c) whether it is tax effective for you to make the personal contribution

(d) what process needs to be followed in order to make the contribution

You also need to consider whether making a contribution fits within your overall financial plan as advised by your financial advisor.

 

Trade debtors

You should review your trade debtors as at 30 June.  You must ensure that any debts that are uncollectable are written off prior to 30 June in order to claim a tax deduction for the write-off in the current financial year.

 

Prepay or bring forward your expenses

Make sure you review all of your expenses and bring forward any expenses to June (where possible).  For example, stock up on stationery and office consumables, prepay your insurance and interest (if applicable) and look at any other expenses you may be able to pay in June.  By bringing these expenses forward to June, you are obtaining a tax deduction in the current financial year which will reduce your overall tax bill for the 2019 year.

 

Defer assessable income

Consider whether it is possible to defer the derivation of your assessable income (being mindful of cashflow implications).

 

Motor vehicles

If you are using a vehicle for a high percentage of work-related travel, make sure you keep a logbook.  Without a logbook, an individual is limited to claiming a maximum of 5,000km at $0.66 (or $3,300).  If you keep a logbook, you can claim the business percentage of the operating costs of the vehicle (petrol, registration, servicing, depreciation, interest etc).

 

Rental properties

If you have a rental property, we wrote a blog post for Affinity Electrical outlining some of the main end of year considerations for rental properties.  You can access the blog post here.

 

If you would like to discuss end of year tax planning for your personal situation, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Instant asset write-off

There have been some significant changes to the instant asset write-off over the past few months.  Below we have summarised the eligibility criteria and the write-off threshold for the 2019 year:

If you would like to discuss how your business can make the most the of the instant asset write-off, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,

Federal Budget 2019-20

Last night Federal Treasurer Josh Frydenberg had his turn at the wheel and handed down his first Federal Budget.

So what did we like in the Budget?  We liked that there were no new taxes or increases to tax rates.  We liked the proposed bring forward of the reduction to the company tax rate.  We also like the increased threshold of the instant asset write-off to $30,000 and the expansion of the write-off to apply to more businesses.  The proposed income tax cuts are also welcomed and may help relieve some family financial stress. 

We’ve outlined below some of the main tax and other business measures that were announced in the Budget.

As with all budgetary measures, these measures are not final until the relevant legislation has been passed by the Government.  As such, it is important that you use caution in acting on these measures until they have become law.  We will keep you updated on the status of these proposed measures.

Businesses

  • Instant Asset Write-off – The instant asset write-off will be increased to $30,000 for assets that are acquired between 2 April 2019 and 30 June 2020.  More businesses will also be able to access the write-off with the turnover eligibility increasing from $10 million to $50 million.  We note that there is currently legislation before Parliament to increase the current asset write-off threshold from $20,000 to $25,000 to take effect from 29 January 2019, once passed.  As such, if all of the relevant legislation is passed to implement the increased thresholds, the instant asset write-off will be available as follows

  • Corporate Tax Rates – From 1 July 2021, businesses operating in a company structure with a turnover of less than $50 million will have their tax rate lowered to 25% (this is 5 years earlier than original planned).

  • ABN integrity measures – The Government will look to strengthen the ABN system by requiring ABN holders to lodge their income tax returns and verify their details on the Australian Business Register annually. 

 

Individuals

The Government has gone back to their seven-year personal income tax plan (announced in the 2018-19 budget) and made changes and updates as detailed below:

 

  • Seven year personal income tax plan

    • Step one – Tax Offset: A low and middle income tax offset will apply from 1 July 2018 to 30 June 2022.  The offset will give taxpayers back up to an extra $1,080 if they earn less than $90,000.  The offset then reduces and is completely phased out at $126,000 taxable income.  This offset will exist in addition to the Low Income Tax Offset.

    • Step two – Tax Rates: From 1 July 2022, the 19% tax bracket will increase from $37,000 to $45,000.  The low income tax offset will be raised to $700.

    • Step three – Simpler System: From 1 July 2024, the 32.5% marginal rate will be decreased to 30%.  A summary table of the new tax rates is below:

Superannuation

The superannuation sector remains largely unchanged in the Budget.  The main changes are:

  • Work test – From 1 July 2020, it is proposed that people aged 65-66 will be able to make voluntary contributions to super without having to meet the work test.  Currently, people over 65 must work a minimum of 40 hours over a 30 day period in order to make a contribution.
     

  • 3 year bring forward for non-concessional contributions – People aged 65 and 66 will also be able to access the 3 year bring forward provisions to make 3 years worth of non-concessional contributions to their super in a single year.

We will keep you up-to-date with the progress of the implementation of these proposed measures.

If you would like to discuss the tax implications of the budget proposals, please call us on (07) 56656469.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,