So I know we aren’t supposed to be in panic mode but the announcements from the governments stimulus package yesterday sent me into a mild panic attack. I’ve been fairly level headed about the whole situation, even attending a large event in Sydney last week but after the announcement yesterday I couldn’t help but think “if they are announcing this now – what will happen at the Budget in May?” I’m really hoping they’ve saved something good for one of my favourite days of the year.
There were some tax free payments for individuals in the form of $750 for those on social security, veteran, concession and other income support payments.
- The instant asset write off has been increased from $30,000 to $150,000 for businesses with a turnover of less than $500m (where the ‘m’ stands for MILLION!) until June 30, 2020.
- There’s some additional depreciation deductions for the next 15 months for new assets.
- The ATO won’t be giving a standardised administrative relief for the Coronavirus outbreak but they are saying that they will consider assistance for tax obligations on a ‘case by case’ basis.
- Employers of apprentices and trainess who employ 20 full time employees (or less) may be entitled to a subsidy of up to 50% of the wage for 9 months with a maximum of $21k.
- And last but not least, possibly my favourite of all – tax free payments of up to $25,000 for businesses with turnover of less than $50m that pay PAYGW.
Let’s unpack what some of these really mean:
The instant asset write off has steadily been rising over the past 2 years and while the jump from $30k to $150k certainly isn’t small – the businesses that this is being made available to has increased literally overnight. Before Thursday March 12th only businesses with a turnover of $50m or less could utilise the $30k asset write off and after Thursday the 12th it is businesses with $500m and $150k. Depending on the industry you are in, the economic impact of the corona virus is going to vary however from speaking with various clients over the past month or so – I know that many are concerned about the domino effect on the market in general and in this way, cashflow is king. I question how many businesses will be inclined to make large capital purchases that were not already on their budget or projected expenditure plan? It will however be a wonderful tax benefit for those who do take advantage of this opportunity – it’s going to make tax planning very fun for me this year.
The refund of PAYGW (wages tax) for employers is one of the most exciting things that I’ve seen in a long time. Big statement but it’s true. This will actually do what it is intended to do – help employers keep their staff in jobs. The way this is expected to mechanically play out is that the BAS and IAS (if you lodge wages monthly with the ATO) are done in March, April, May and June and the ATO will refund 50% of the PAYGW (wages tax) amount in each of those months within 14 days – to your bank account. You will receive the funds from the ATO until you reach the maxiumum threshold of $25k. If you are an employer who has chosen to cease paying yourself wages to assist with cashflow during these uncertain times, now is the time to re-consider. The 50% payment is tax free however your employees will still gain the benefit of the full PAYGW credit and you will still receive the full tax deduction for their gross wages. All business owners should pick up the phone and speak to their accountant about this government announcement – it is a great opportunity.
This week the governments superannuation amnesty bill was waved through the Senate. It took almost two years but it finally happened and for clients with outstanding superannuation – this is definately good news.
In basic terms, the bill allows an “amnesty” for employers to pay superannuation that hasn’t been paid before and make up for prior non-compliance. When superannuation is paid late, there are generally 3 components:
- The actual super owed
- Nominal interest
- Administrative penalty
The calculation of late paid superannuation under the amnesty will not include an administrative penalty. Additionally (and this is my favourite part) the actual super owed and the nominal interest paid will be tax deductible.
An opportunity exists for current businesses to claim large tax deductions in the current year on these additional superannuation payments. In particular, small businesses that have been operating for a long period of time may have unmet SG obligations for business owners, company directors and working family members.
To qualify for the amnesty:
- you must disclose to the ATO that there is a shortfall in super guarantee for a particular quarter for an employee
- the quarter in which there is a shortfall must have ended at least 28 days before the start of the amnesty period (including quarters ending up to 31 March 2018), and
- the ATO must not have declared an investigation into SG compliance for that particular quarter.
Being in business is a never ending cycle of lists and checkboxes, making sure we stay up to date on the various deadlines that we need to adhere to and those that we self impose. It’s easy to become overwhelmed in the busyness of business.
As we near the end of another financial quarter, there’s a few things that I’m ticking off the list of accomplishments for our clients and within the office:
- Single Touch Payroll implementation
- Taxable Payment Summary Reports
- Payroll Tax Returns
- Workcover Declaration Notices
- the list goes on….
Today I’m sharing my 5 favourite things that help me in my every day work life to give me more time for other things I enjoy doing:
- TIME BLOCKING – In basic terms, this is when you set time aside to do specific tasks without trying to multitask – so basically, you don’t let anything interupt you. I find this works best for me when I time block things like “emails” and “phonecalls” and “meetings.” Basically, I don’t let the flow on from those things distract me from getting through the rest of the group of tasks. I am definately more efficient when I timeblock.
- COMMUNICATION – The IQ team is made up of awesome humans who all have awesome lives that don’t neccessarily allow us or require us all to be in the Burleigh office Monday – Friday, 9-5. Being an e-office (paperless environment), working remotely is seamless, but we needed something that allowed us to keep our office culture and communication at the same level as if we were sitting right next to each other. We have been using Slack for over 3 years and use this as our communication hub and have banned internal emails. This helps us to get things done in the most time efficient manner as well as letting us share photos, do video calls and search prior chats for
- TASK MANAGEMENT – This has been a game changer for me and our IQ team. We use kyber which integrates with Slack and allows us to set ourselves and each other tasks with timeframes, deadlines complete with follow up and the ability to delegate and make notes as required. I love that I can see at a glance what I need to do as well as what any other team member has on their tasks list for today, tomorrow and the future as well as what they have completed.
- LEARNING – I am commited to being a lifelong learner (that’s a term I picked up at my kids school and I am running with it because I really like the alliteration.) I have a host of podcasts that I subscribe to but the ones I am loving right now are Next Generation Innovators Podcast Future Women and The Startup Grind Podcast . I have had a client recommend the Jordan B Peterson Podcast to me but I am yet to check this out.
- PEOPLE – I can’t really make a list of the things that help me do what I do best without listing people! I choose to surround myself with people who are on the same page and who are going in the same direction. We have pretty specific goals and ideas and we make sure we all know what they are and how we are going to get there. I also try really hard to give those people as much of my time as they need so that they can be the very best versions of themselves. I also make sure I both contribute to and seek the counsel of an outstanding support network of business mentors that I can turn to when I need advice – this is invaluable to my general day to day activity and sanity.
Single Touch Payroll (STP) is a change to the way employers report their employees tax and superannuation information to the ATO and is done electronically through your accounting or payroll software. The information is sent directly from the software to the ATO. All employers need to ensure that they are compliant by July 1st.
Employers with 20 or more staff should already be reporting to the ATO as this was implemented from July 1st, 2018.
Employers with less than 20 employees have until July 1st, 2019 to begin reporting but I recommend getting the process started now to ensure that there is not a last minute rush and stressful implementation at the end of the financial year.
The process is relatively simple and once you are setup, it really runs in the background with very little for you to do – most of our existing clients who are already on the STP process report that they mostly forget that it exists. There are some distinct advantages – employers who report using STP for the full financial year will not be required to provide employees with payment summaries. Instead this information will be provided electronically to employees by the ATO through an employment income statement and be available on their mygov account. Where employees do not have a mygov account, their tax agent can access this for them or they can contact the ATO for this information.
Long term the ATO is looking to use the STP information to prefill activity statements and reduce the burdon on the taxpayer for monthly IAS statements that report PAYG withholding amounts. This is the same information that is being reported through the STP data so it makes sense that the ATO would use information that you are giving them to pre-fill the reports.
We have successfully assisted clients with the implementation of Single Touch Payroll. Please consider getting on board prior to July 1st and contact the office on 07 5576 0011 if you would like to make an appointment to get setup.
The Prime Minister has been kept very busy over the past few weeks and graced our television screens on more than a few occasions. I love that he is never afraid to make a “Dad joke” even in the face of an epidemic.
Today, together with the Treasurer – the PM announced the JobKeeper payment which aims to assist businesses keep employees ‘on the books.’ Here’s what we know:
- Businesses will receive the Jobkeeper payment of $1,500 per fortnight (before tax) per employee, regardless of their salary and employment type. There is a condition for casuals, where such employees need to have been employed for a period in excess of 12 months.
- Eligibility will be be available where there is a downturn in revenue of more than 30% or 50% for businesses with revenue over $50b. It is unclear what the comparative period is as yet.
- All business entity types will be eligible including sole traders, self employed people, partnerships and trusts.
- The payment will be paid from May 1st but backdated to March 30th, 2020 and the scheme will run for a period of 6 months.
- There will be a legal obligation to employers to ensure that the full amount is passed onto employees.
- The payment will be free from superannuation.
- It is not possible for an employee to receive both JobSeeker and JobKeeper.
This is another “watch this space” announcement. It’s a fantastic one – don’t get me wrong, but we need register, watch and wait.
Parliament must be recalled to pass the legislation and it will be at that point that we truly understand how the payment works and how this will be specifically rolled out. As with the eight (yes you read that correctly) bills passed last week which made up the stimulus package from the first two announcements – it is only when the legislation exists that advice can be given and it is always recommended that you seek specific advice for your own situation.
And hopefully this gives you all a much needed laugh in this current time, while the link above is now valid and working, I did jump onto the ATO site during the PM speech and searched “JobKeeper” and this is what I found…………
There has been plenty of warning about this one but amidst the current world happenings which everyone is feeling the effects of the rush to get this done has been overlooked and businesses need to act now if you have not already done so.
Unfortunately, there is no deferral for the implementation of the new system and all users who attempt to access the system with an AUSKEY from March 28th will be unable to. This is of great concern as I know many clients will be keen to lodge their March BAS quickly this quarter.
If you do not use your accountant or bookkeeper to lodge your business activity statement or access information, then you are likely to have access to your business portal. If so, you will have seen the message every time you have logged in that “from the end of March 2020 AUSkey will no longer be available. Instead, it is being replaced by myGovID.
myGovID is different to myGov – I want to make this point super clear as it has been the most confusing point for many people for obvious reasons. I mean, they have mostly the same name……….not sure who’s idea that was? But other than that concern, I am a big fan of myGovID. Once you set it up – it’s awesome.
I won’t go through the steps of how to set it up as it’s pretty simple and there are details on the website but basically it’s app based, you need an email address and proof of identity documents. Once that’s done – you just need to link your myGovID to your business. This is the part people have found the most tricky. Watch the ATO explanation of how to get setup.
The main problem has been clients who have businesses with a corporate trustee. At the time of writing this blog post, you need to ring 1300 287 539 and arrange to have the director of the company linked to the trust, there is no other option but to ring.
We also had some issues with a certain lovely staff member in our office not having enough identity documents in one name. Sounds dodgy but it was totally legitimate and can easily happen when the list of documents able to be used is quite limited.
There are some other things to note:
- the app needs updating on certain devices more often;
- you now only need to have one myGovID for multiple entities – saves time and sanity;
- myGovIDcan be used to access a range of government websites listed here;
- the app does only have 2 stars in the app store (apple) and several users report frustration with it. However from a user usability point of view we really love it in the IQ office.
I hope everyone is taking care of themselves during this very uncertain time – if you need any assistance from an accounting or bookkeeping point of view, please contact the office and we will be more than happy to help.
I am so excited to finally be able to say that we are now in the 2020 financial year. I am being totally dorky but 2020 just sounds so cool to me…….people who have 2020 vision have perfect vision and in my mind – this financial year is going to be an amazing one. But as much as I am looking forward, the beginning of the financial year is also a great time to look back on the prior 12 months and my goodness, so many amazing things have been happening for us in the IQ office.
We have been blessed with success and received a fair amount of recognition within our industry this year. IQ Accountants were finalists in the Australian Small Business Champion Awards in the Accounting Services and Small Business Entrepreneur categories. Last August, I was named MYOB’s Accountant of the Year – and to say I was stunned would be an understatement. Paige has a video of my acceptance speech which is embarrassing to say the least as I was genuinely overwhelmed by the enormity of the award. I also received the honor of being named Partner of the Year (boutique firm) at the Australian Accounting Awards this year. I had made the mistake of googling the other finalists in my category the evening before and had apologized to my husband earlier in the day for making him come to Sydney for the awards evening and wasting his time! So again, shocked but thrilled. That win was particularly special as the Australian Accounting Awards are considered the most prestigious due to being the only national independent awards that recognise excellence across the entire accounting industry. Off the back of this, I am also lucky enough to be named as a finalist for Accountant of the Year and Small Business Adviser of the Year in the 2019 Women in Finance Awards and as Certified Consultant of the Year for MYOB’s 2019 partner awards program – both to be held in August.
You may have noticed that we no longer have a receptionist! Due to our ever changing internal workflow processes and dynamics, we found that our business had outgrown the traditional receptionist role and this has now been superseded by the Document coordinator position. Daniele has made this role her own and comes to us with an economics degree and past accounting and banking work experience. She hides a little behind the admin email address but will be the one to correspond with about any documentation issues and queries. We have also recently welcomed back Athena to the IQ team. Long term clients may remember Athena from around 12 years ago (!) when she worked as a training junior accountant who left to pursue a career in bookkeeping. She now returns to us as an extremely experienced accountant and bookkeeper with some additional commercial accounting experience under her belt. Athena will be working in the IQ Bookkeeping sector with a special interest in some additional services that we will be offering in the next 6 months. We also welcome Janet to the IQ team as a senior accountant. She has a wealth of knowledge and wonderful ability to practically apply her technical knowledge and explain things in an easy to understand manner to clients. Both Renae and I are thrilled to have her on board. Renae has now been a partner for a full 6 months and as predicted, it was like it has always been – she was well and truly pulling her weight and more as a super star employee and now I am relishing having her to lean on as my business partner.
We have some amazing things to roll out in the 2020 financial year and I am anxious to just get stuck into the year and get things happening. We are really looking forward to celebrating all of our clients success this financial year.
The government in mid-February 2019 legislated to include Single Touch Payroll reporting to the ATO for all employers with less than 20 employees.
So, what is Single Touch Payroll?
Single Touch Payroll (STP) is effectively payroll in real time, in that, every time an employer pays an employee, all pay information is sent to the ATO. This is a huge shift from traditionally paper based reporting and the industry has quoted it to be ‘the biggest compliance undertaking since the GST’.
By introducing this law, the government aims to reduce reporting burdens on employers and effectively make it harder for individuals claiming benefits which they are not entitled too.
What do I get from this?
– streamline business reporting to the ATO through the existing payroll process
– eliminate annual PAYG withholding statements
– reduce on-boarding activities – as tax file number declarations and super choice forms can be completed online via myGov
And the good news is, that the MYOB software that you are already using will automatically do this in the background, once you follow a few important set-up steps.
We are here to help
We have listed three options below to help you be compliant by 1 July 2019
- Want us to show you how? We will be running a webinar to show employers how to become compliant on Wednesday 15 May 2019 at 2:30pm for a $55 fee, spaces are limited and all you have to do is email Daniele at email@example.com to lock in your spot.
- Make a one-on-one appointment for us to walk you through We are happy to take you through how to be compliant for your business including establishing an AUSKey. The cost is $110 per hour for a time convenient to you. Please email Daniele at firstname.lastname@example.org organise a booking. The appointment can be in the office or via e-meeting.
- DIY? We have previously published blogs and newsletters on this topic to assist. Please note that depending on your software, this will be slightly different. We would recommend becoming compliant by end of May 2019 to avoid the last minute rush.
There’s a buzz in the air right now – it’s a busy time….on top of the usual May due dates that are quickly approaching, I’ve been travelling a bit lately, am Sydney boundwith the IQ team this weekend and head overseas next week. And then – to top it off – there was the BUDGET on Tuesday night!! (I’m imagining cheers of excitement here.) This is historically a May event and one of my favorite nights of the year but with the whole daylight savings thing – it was at 6:30pm so both of my children were simply ecstatic to watch this with me (at ages 7 and 8 ecstatic is likely more my interpretation of how they felt rather than their actual feelings.) This all led to a bit of a post budget hangover yesterday hence my belated blog post today. Here are my main takeaways from Tuesday’s events:
- Instant Asset Write off increase to $30,000 – I’ve already had a few questions about this one and rightly so as for the 2019 financial year, there will be three instant write off limits over three different time frames. $20k, $25k and $30k depending on the date that the asset was purchased and installed, ready for use. Historically, only small business entities ($10m or less turnover) could access this however the scope has been widened to include businesses with turnover up to $50m. This has now been legislated.
- There has been proposed changes to personal income tax rates. This means that these will only take effect if the current government is re-elected. These proposed changes are summarized in the chart below. From the 2025 income year, the 32.5% marginal tax rate will be reduced to 30% in addition to the bracket being changed changed from $45,001 – $200,000.
|Rate||Current (2019-2022)||Proposed (2023-2024)|
|0%||0 – $18,200||0 – $18,200|
|19%||$18,201 – $37,000||$18,201 – $45,000|
|32.50%||$37,001 – $90,000||$45,001 – $120,000|
|37%||$90,001 – $180,000||$120,001 – $180,000|
- The will be an immediate change (effects current financial year) to the low and middle income tax offset which means that when the 2019 tax return is lodged for individual taxpayers with a taxable income of less than $125,000 – a refund will be received. This has been announced as a tax relief measure and will be up to $1,080 per tax payer for the years 2019 up to and including 2022.
- Single Touch Payroll information that is being collected by the ATO (stay tuned for more information about this – it’s my current topic of choice) will be shared with more government agencies from July 1st.
- The ABN system is being changed to require ABN holders to lodge tax returns – currently you can hold an ABN without lodging a tax return and from 2022, there will be a requirement to confirm the accuracy of the ABN register details. I am hopeful that this will also include a simplified streamlined approach to the various registers and systems that currently exist for updating details.
- There were several superannuation announcements with my pick being the work test to removed for those ages 65 and 66 years from 1st July 2020.
- The Government will also provide substantial funding to establish a dedicated sham contracting unit (within the Fair Work Ombudsman) to address sham contracting behavior engaged by some employers.
- The Government will provide $1 billion over four years to the ATO to extend the operation of the Tax Avoidance Taskforce. There will be a further $42.1 million over four years to the ATO to increase activities to recover unpaid tax and superannuation liabilities.
There was so much more, I was interested to hear about the teachers who go rural for a set period of time may have their HELP debts wiped but what has me more on the edge of my seat is the potential changes to capital gains tax concessions (currently 50%) and negative gearing benefits from the opposition. There are reports that the impact of these will be introduced as early as January 2020 and they will have a significant impact. Until we know more, I’ll just be over here like: