As the end of financial year draws near, employees begin to get excited about lodging their tax returns and getting their refunds which in turn, puts pressure on their employers to provide their payments summaries – or group certificates (depending on your age!) This year, most employers and businesses will be on the Single Touch Payroll (STP) system and this means that employees will not receive any documentation regarding their annual earnings.
FACT: When registered for STP – employers are not required to provide employees with a final end of year payment summary.
FACT: Some employers will have until July 31st to complete the “STP Finalisation” process. This means employees may not have access to their year end information and be unable to lodge their tax returns. The ATO have recommended that employees “hold off” lodging their tax returns until employers have completed the process.
FACT: The STP Finalisation process replaces the old payment summaries. Upon completing the process, employers are:
letting the ATO know that all pays for the 2020 year have been done
the status of the employees income statement in myGov changes to “Tax Ready” and this means they can now lodge their tax return
FACT: Every time an employer who is STP registered processes a pay, this information goes to the ATO.
FACT: Employees can access their Employment Income Statements through any of the following ways:
Access myGov and download from there
Via a registered tax agent who can assist in lodging the tax return
By phoning the ATO who will provide this over the phone – 13 28 61
Here is a great fact sheet to provide your employees if they ask for their payment summary/group certificate.
All IQ clients who are employers should have received an email advising the due date for the STP Finalisation. If you have not, please contact the office as a matter of urgency.
It’s been 62 days since we closed the IQ office – we miss each other terribly but in all reality, we are working really well and things are going fine. Some of our clients haven’t even realised we have closed the office given that they ask me “Are you at home or at work?”
The IQ office is in Burleigh Heads, Queensland. I know, that seems like an odd statement but because we are a digital firm, we have clients nationwide and some people have never been to the office – so it’s an important piece of information given the topic at hand. Qld has a “Roadmap to recovery” that was announced last Friday and there is a federal one as well. There is also an overwhelming amount of information here about what needs to be implemented before and when we return to the office. Workcover Qld also has some information.
Day to day, we only take about 25% of our meetings face to face. Otherwise it’s via other methods using various technologies, much like we’ve been doing over the past 62 (still can’t get over that number) days. But I also know that if clients ever decide to make that one face to face visit to the office, its generally at tax planning time – which is now. So our decision, to delay re-opening the office has been a really tough one.
We are all very keen to see each other but the bottom line is that we are accounting and taxation experts and not workplace health and safety experts. This is our busiest time of the year and we need to stay focused on the outcome which is completing the 2019 for the late lodgers and proactive tax planning for all other clients.
Speaking of tax planning, we recently installed a very fancy new whiteboard which I was really looking forward to using in tax planning this year! It is currently hanging sadly on the wall.
And to end – some exciting news. This week we learned that I have been named as a finalist in the Australian Accounting Awards. The awards night is being held in a few weeks via live stream! What a wonderful world we live in.
In a welcomed break from Cashflow Boost, JobKeeper and other stimulus measures – I wanted to share the tools that we’ve been using at the IQ office to help make the work from home situation a little easier.
We made the call early to go to “work at home”and closed the office on March 16th, about a week before most offices did the same. When we closed, we didn’t speak to our IT people and there was no phone re-direction, we just packed up our laptops, took the extra screens and went home. The office looked like it had been robbed! It was eerily easy – apparently we’ve been planning for Corona Virus all along and hadn’t realized it.
SLACK – I wrote another post here which covers my top 5 things that help me stay productive and slack made this list under communication. We would be lost without slack. We use this as our “messenger for 2020.” We’ve been using this for almost 5 years now and when we began microsoft teams didn’t exist. I’ve sat in on my fair share of teams meetings lately and my kids have been using teams with school for online learning and there are a lot of things I really like about it but nothing beats the integration options that Slack has so IQ are firmly on team Slack.
GO TO MEETING – This is our preferred meeting platform and while I’ve sat in on teams, zoom, skype and google hangouts – at IQ we choose GTM because of the whiteboard ability (making tax planning a breeze), higher number of attendee options but mostly because of the safety. GTM uses robust encryption mechanisms so anything discussed in these meetings stays confidential and the data isn’t stored – even if we opt to record the sessions (like in bookkeeping training.) For us, the security of safety is paramount and while it may make joining slightly more difficult on the initial attempt – it’s worth it.
SPARKLY – This is a bot which we’ve integrated to slack and it connects the IQ team, 2 people per day on a randomized schedule. The aim is to have a quick 5 minute catch up as if we were in the “office kitchen” and chat about whatever’s going on in our lives and aims to keep us connected.
3CX– We use a phone system called 3cx which allows us to answer and divert calls as if we were in the office. So many clients have asked me about this as we have found this to be exceptionally reliable. It sits on our computers and some of our work phones (not all staff have these.) It also has a video function so we actually get to see each other when we make internal staff calls – this has really helped keep the team connected.
PRACTICE PROTECT – We use a special security system designed especially for accountants where our team only know one password and not any other passwords to log into any client files or other programs. This has given us great comfort during this time where there’s been a lot of talk about cyber crime and IT issues.
ROCKETBOOK – These are actual books which you use special pens to write with and then you can upload it to email, google drive etc and then…….wipe clean and use it again. I love this product, it’s sustainable and really suits our staff who prefer the handwritten notes but keeps them in line with our paperless office workflows.
IQ CLIENT PORTAL – I saved the best until last. When we went to work at home, I knew that without the portal – we would have been in struggle town. We are so grateful to our clients who utlise the IQ portal and who in turn have been able to assist us in keep our business running seamlessly. We have been able to continue to prepare and lodge tax returns and BAS, receive documentation and provide anything requested through the portal.
Staying connected to each other and to our clients has been really important during this time, particularly with the office being closed. We appreciate all of our IQ clients and are grateful for everyone for being on this technology journey with us.
All the days are really blending into one right now and I am very aware that we are right in our usual tax planning time and our awesome IQ clients have heard NOTHING from us about tax planning. Well, that will change this week – keep an eye on your IQ portals, we will be giving you all the tax planning details and begin taking appointments. The delay has been obvious…….we’ve been super busy helping everyone with COVID related work but also, I needed to make sure we didn’t start tax planning too early this year and not include JobKeeper which is a taxable payment and will make a BIG difference to the year end tax payable.
I assisted countless clients with JobKeeper last week and was surprised and concerned about some of the myths and facts that are being shared. I want to clear some of these up as well as let you all know about a new change that the Treasurer announced late Friday.
MYTH – I will receive JobKeeper first and then I will pay myself and/or my staff. This is incorrect – JobKeeper is a reimbursement system and if you are an employer who pays wages, you must first pay yourself wages. To be eligible to be paid for the first tranche (30/3 – 26/04) you must pay wages prior to the end of April, meet all of the eligibility tests as an employer and employee and enroll.
FACT – I can back-pay my staff as long as I do this prior to the end of April. Yes, so time is ticking. Usual eligibility and enrollment criteria apply but there is a concession allowing the back-pay for the first two JobKeeper fortnights only.
MYTH – All of my staff under 18 can receive JobKeeper as long as they meet the long term casual test or are permanent part-time or full time employees. Late on Friday, there was a change to the JobKeeper rules (I know – welcome to my life.) The rules will be changed prospectively so that full time students aged 16 and 17 years old, that are not financially independent are not eligible for the JobKeeper payment. You will need to retest every employee under 18 years of age. If you have already paid them $1,500, this will be reimbursed but future payments will not be reimbursed.
FACT – I can use either CASH or ACCRUALS to calculate the decline in turnover test. In another change, the ATO has now updated the information to show that despite the GST registration – either cash or accruals reports can be used but consistency is key, make sure you are comparing accruals with accruals and cash with cash.
MYTH – If I use the JobKeeper alternative test – this is the only test I need to meet. The alternative test sets out the available alternative options for the “decline in turnover ” calculation however all other eligibility criteria still apply.
FACT – I need to make sure I meet all of the eligibility criteria as an employer, employee and/or eligible business participant and understand how to enroll and claim as well as what administrative documentation should be held. This is complex legislation and while it is a wonderful and welcomed wages subsidy, there is an incredible amount of administrative pressure on business owners to ensure this is rolled out correctly. Please do not get this wrong.
MYTH – Once I’ve enrolled, I don’t need to do anything else. No – if you have employees you need to notify them they have been nominated as an eligible employee within 7 days of notifying the ATO of their individual details (I expect this will happen at claim time.) Also, don’t forget to claim! This is how you are reimbursed for the JobKeeper payments you are making for your employees or if you do not pay wages – this is how you will receive the JobKeeper payments.
FACT – I can enroll by the end of May and still receive the full payment. Yes, this is true. Originally the ATO information said April 26th, then April 30th and now it is the end of May however the process is check eligibility, enroll and then claim (as well as a heap of other processes along the way.) Claim’s open on May 5th so there is no benefit in waiting until the end of May to enroll.
If you are uncertain about these issues above or any of the JobKeeper information – here’s how you can find out more information:
IQ Phonecall assistance – can be booked in 15 minute blocks. There are no “quick questions” with JobKeeper. $55
IQ E-meeting – discuss eligibility and/or ad hoc questions. $110
IQ Accountants JobKeeper supplement. This is a step by step guide for the JobKeeper process – separate process for those with employees and separate process for those who do not pay wages. The document will be updated as changes are made and the updated document provided at no further cost – $195
What a week this week was! Some of the information that I am going to share with you now was provided to me as late as Thursday and in the accountants world (yes, picture thousands of accountants hidden behind screens geeking out about JobKeeper) there is SO MUCH DEBATE about some of these things and there is still alot of information that we are waiting on from the ATO including further clarification.
But that aside, JobKeeper opens for enrolment on Monday. Yes, Monday April 20th. For employers and the self employed who pay themselves wages, the process is pretty clear but for the self employed (including sole traders) who do not pay themselves wages – there’s going to an online form on the ATO website for this process. The process which begins on Monday.
If I am honest, JobKeeper is pretty complicated but it’s going to be pretty awesome for some clients. I encourage every single business owner to get across the JobKeeper information and check if you believe this is available to you and if you do – find out all of the details. The devil is in the details in this process because if you get this one wrong, the penalties are super harsh.
So far, everyone should have registered and then from Monday, everyone can ENROL. The process for applying for employers with employees and self employed is different. If you are self employed but pay yourself as an employee then it is more simplistic to put yourself in the employee category for the purposes of JobKeeper. However, it will be worth reviewing the self employed category if you also have another family member or business partner who is actively involved in the running of the business as you may be eligible to make a claim for them under the self employed category.
Before you enrol – please be aware that it is not mandatory to participate. This is an “opt in” situation.
Please review your eligibility for JobKeeper. If eligible then –
You will then need to review your payroll, make decisions about backpaying your employees for JobKeeper (concession only available until the end of April) and/or begin paying $1,500 to each eligible employee per JobKeeper fortnight.
Enrol for JobKeeper from April 20, 2020
Applications for claim don’t open until May 4th however there is lots to be done prior so please don’t ignore JobKeeper until then or you will find yourself not eligible.
How do I enrol? On Monday – self employed will hopefully have a form on the ATO website that they can use to enrol. For all employers will employees, you need to either do this yourself on the business portal or use a tax agent (that’s us!) If you do not have the business portal but wish to do this yourself then check here for information. Anyone who hasn’t yet moved from the auskey to MygovID should also follow these instructions. Warning: I have heard that this is becoming difficult to setup at the moment and recommend that you try this at low peak times.
Why is this so complicated?
I genuinely believe that there will be clients who are eligible for JobKeeper and will miss out because the information has not been able to be clearly laid out all at once due to the timing of the release. There are varying rules and processes between Employers who pay wages and Self Employed and some people will fall into both categories and may have to do both processes.
The ATO is working extremely hard in the rollout and implementation of this system but the constant update of information is really hard to keep track of. This is going to mean that at some stage people are going to think they know whats going on and then miss important updates that could effect their eligibility. A great example of this is me! I logged off around 7pm last night and at 8:30pm got notification there had been an update to an area of “uncertainty” by the ATO that was going to change the eligibility for some of my clients (in a wonderful way!)
As JobKeeper is a reimbursement system, there is a risk of paying employees prior to the ATO reimbursing you and the risk is on the Employer – not on the employee. If you choose to pay the employee and then find out later, you were not eligible for JobKeeper – this is a huge financial outlay. Given that we know that staff who are currently paid less than $1,500 per fortnight must receive the full amount for the employer to be eligible – there is also some uncertainty regarding the treatment of the top up wages for Workcover and payroll tax thresholds. This could end up being quite costly for the employer. Leave and superannuation issues also need to be considered.
Finally, the penalties for getting this wrong are what I would call – on the harsh side.
The IQ team has prepared a JobKeeper supplement that we will be making available to all clients. The JobKeeper supplement sets out in a step by step process for both employers with employees AND the Self Employed (including sole traders) how to navigate the process and obtain the payments. For anyone who has already purchased the Business Action Plan, this has been provided to you as a complimentary addition. The cost of the JobKeeper supplement is $195. We are also doing our COVID rate e-meetings and phonecalls. I really encourage clients (especially those who are self employed) to review the JobKeeper information carefully as there will be many clients who will be able to access these funds (up to $19.500/eligible employee or business person) – we are here to help you.
The Australian Taxation Office is offering some relief options to assist those impacted by the Coronavirus. One of these is that quarterly payers of PAYG Instalment Tax can vary their March quarter down (to NIL) and/or claim a refund of the instalments paid for September and December 2019 quarters.
This is PAYGI – this is not the same as the PAYGW (or wages tax) that is paid for employees.
The relief will not be automatically applied and you will need to take your own action or the IQ team can assist you.
To assist you in making a decision, here’s the important information that you need to know:
The PAYG instalments are prepaid tax for your 2020 tax return. If you vary the March quarter down or to NIL and/or claim a refund of the September and December 2019 quarters, this will reduce the amount of tax you have paid during the year and when your tax return is lodged at the end of the year, there is a very high change you will have a tax debt to pay.
The ATO are not offering you a “gift of funds.” This is simply a deferral of tax – giving you your money back now so you can pay it back to them at a later date.
There are a variety of options to choose from:
You can choose to vary the March quarter down OR to NIL and leave September and December 2019 quarters as paid.
You can choose to vary the March quarter down OR to NIL and also refund September AND December 2019 quarters.
You can choose to vary the March quarter down OR to NIL and only refund one of the September or December 2019 quarters.
How to take advantage of this opportunity:
This is time sensitive – please act now.
The ATO provide you with a guide here which you can follow to vary your PAYG instalment yourself. The ATO have confirmed that they will not seek to penalise anyone who has a tax debt at the end of the year due to varying, so don’t be disheartened by the “interest and penalties” or;
The IQ team can assist. We are offering a discounted COVID rate to assist clients in this process – please complete this form if you would like our office to take care of this matter for you. All information including costs are outlined on the form.
Finally, the ATO released some further information about JobKeeper late today. Unfortunately this did not contain detail for self employed but for employers the information is here.
I sat down with Simone Richardson from Henderson Matusch to chat about the much publicized $10k withdrawal from superannuation and the on flow effects to cash flow during the current economic times. Thanks Simone for your expertise and your time during this very busy period.
I am disappointed. I seriously thought about just writing those 3 words and pressing publish but then everyone would think I had actually gone crazy from my sleep deprivation (which is only slightly truthful.)
Here’s where we are at. Last night, the Bill to implement the $130b JobKeeper package was passed which I originally wrote about here and here. I should be excited but instead, all I feel is uncertainty about how the JobKeeper package is actually going to be implemented. I expect we will receive further information from the ATO now that the bill has received royal assent. Patience is a virtue right?
However, there have been some further explanations regarding who will be able to access the JobKeeper payments. I originally wrote about all business entity types being eligible including sole traders and other self employed people including those in partnerships and trusts. While the scheme is expected to be administered through the ATO and tracked through single touch payroll, we know that many self employed people do not pay themselves as traditional employees and instead takes owners drawings etc. For these people, there will be a different monthly reporting system however again, the exact details are still unknown at this time.
Sole Traders: Must meet the general eligibility criteria and additionally be “actively engaged” in their business.
Partnerships: Same as sole traders and only one partner will be able to receive JobKeeper along with any other eligible employees.
Trusts: Same as sole traders and only one individual beneficiary will be able to receive JobKeeper, along with with other eligible employees.
Companies: Same as sole traders and only one person in a director capacity can receive the JobKeeper payment.
It’s not too late to register your interest, the ATO will contact you to confirm you have registered and then you along with the 750,000 (reported by ABC) other businesses will be advised what to do next when they know what is going on.
Today the Government announced the rent relief package which, as expected will be implemented under a mandatory Code of Conduct (the Code.) The Code will be legislated through each State and Territory.
The purpose of the Code will be to impose a set of measures for application to commercial tenancies (which includes retail, office and industrial) between the landlord and the tenant for circumstances where the tenant has an annual turnover up of up $50m and is eligible for JobKeeper (set to be legislated tomorrow.)
The Code is 7 pages long and mostly legal speak and I think again, we will need to wait until the relevant legislation arises from the states and territories. However, some (but not all of the) temporary arrangements and leasing principles from the Code are as follows:
The reduction in rent will be done by waivers and deferrals in a proportionate approach which will be shared by both the landlord and the tenant up to 100% of the ordinary amount payable. The proportionate calculation is based on the reduction in the tenants trade during COVID-19 and a subsequent reasonable recovery period.
Rental waivers must constitute no less than 50% of the total reduction in rent under the proportionate approach during COVID-19 pandemic period. Tenants may waive the requirement for a 50% minimum waiver by agreement.
Payment of rental deferrals by the tenant must be done over the balance of the lease term or for a period of less than 2 years (which ever is the greatest time) unless otherwise agreed.
Landlords will not be able to terminate leases due to non payment of the rent during the COVID-19 pandemic period.
Landlords will not be able to draw on a tenants security (bond) for the non-payment of rent during the COVID-19 pandemic and/or a reasonable recovery period.
There is still a lot of uncertainty in this area but across my client base I know that mostly, Landlords and tenants alike have been waiting for an announcement such as this. This clearly indicates the requirement for financial information sharing between the tenant and the Landlord, something we generally only see in the retail environment and this will not only require a level of honesty but also a practical level of the information required being available.
Now is not the time for anyone to be behind in any bookkeeping work, no matter what the status of the business is – some of these stimulus options and relief availability options depend on the business figures. If you require any assistance with your bookkeeping, please let us know and we can offer some training or the full bookkeeping service if required.
Last week, when the Prime Minister and Treasurer announced the JobKeeper package, I wrote this blog post and it sounded pretty good. There are some definite holes – I mean, most businesses don’t have the cash to pay staff between now and May 1st when the proposed JobKeeper payments begin to be paid and the recommended solution is to approach the bank. Banks are mostly being helpful in the deferral of payments for loans but as far as getting further funding fast – I’m not seeing much of this.
This is a $130 billion wages subsidy plan and over here at IQ, we want to make sure that every single one of our clients that is elligible for this package makes sure that they receive it.
The BIG problem right now is that this isn’t law yet. We have the original announcements from the PM and treasurer, lots more talking about it from various parties, a heap of media attention, some documents we can hopefully rely on to be replicated as law (like treasury documents) and some documents we should be able to rely on (like from other government websites). The reason that I write with such caution is that – you guys, some people got caught out on the last couple of announcements. With packages one and two (stimulus) there were EIGHT new bills that resulted. The bill is the law. Each of those bills has a couple of hundred pages of information to explain how they work and how they don’t work.
Until we get the one (I’m hoping for just “one” for my own sanity if nothing else) new bill, no one really knows how this JobKeeper package is actually going to work from an elligibility and a practical sense. What I am confident of is that it looks far more promising that when the original announcement was made and I stand by my original advice to REGISTER, watch and wait.
However, the purpose of this post is that I’d now really like the stress the importance of registering. It appears from the discussions since the original announcement and some of the documentation floating around on various websites (which I won’t reference here as the legislation still doesn’t exist) that more and more of our clients may be elligible.
Please don’t let the term “employer” put you off – “Self-employed” are also able to register their interest but will be reporting under a different format as the current example is that this will be done through payroll which some self employed people don’t use. So for those who take “owners drawings” – please also register.
How the IQ Team can help you:
There is an overwhelming amount of information flying around from various sources and some of it is conflicting. I am even seeing this from a professional sensein the accounting industry.The way we will communicate information with our clients across COVID matters will be as follows:
Through blog posts for general information and general updates
Social media to alert new blog posts and for general information and general updates
We are offering all current IQ business clients a complimentary 10 minute consultation for COVID matters. If you have not taken advantage of this, please contact the office directly and speak with Jesika or email firstname.lastname@example.org
We have prepared a “Business Action Plan” (BAP) which is now a 20+ page document complete with checklists for business financial management and details all stimulus packages with application links. This is a live document that is updated regularly and re-provided clients who have already purchased the BAP as a complimentary update. The cost of this is $275 for existing clients, please contact the office on 07 5576 0011.
We are offering e-meetings for all COVID matters and for all existing IQ clients this will be at the COVID rate. These meetings can be booked in 15 minute – 60 minute blocks.