July 2020 – Practice Update

  • img
July 8, 2020

COVID19 Update and 2020 Tax Returns

We are running our next webinar exclusive for Hughes O’Dea Corredig clients on 16th July at midday via Zoom. The webinar will discuss the 2020 tax preparation, how our office will be operating this year due to COVID-19, what information you will need to provide prior to appointments, and an opportunity to ask questions. The webinar presenters will be Michelle Grech and Darren Jinkins. Limited to 100 spaces, registration is via the following link:  https://us02web.zoom.us/webinar/register/WN_FIMOxfHmRrGPmi5982ZObg

Promotion
We are pleased to announce that we have promoted our manager, Lisa Papachristoforos, to Partner of Superannuation Services. Lisa has been an integral part of the HOC team since joining our firm and has assisted our clients with her technical and common sense approach to dealing with their tax and superannuation requirements. Lisa has commenced her role as Partner from 1 July 2020.

We are National Award Winners

We are thrilled to take out the 2020 Australian Accounting Award in the category of SMSF Firm of the Year. The team comprising of Sandra Caruana, Karlyn Read & Lisa Papachristoforos have done an outstanding job elevating the firm to the best in the nation, and continue to work hard for our superannuation clients. The crystal ware will be displayed at reception shortly.

COVID-19 Update -Register for $5000 Local Lockdown Business Support Program

Another week, another set of rules in Victoria. Greater Melbourne is now in lock-down for a further six weeks, not just hot spot suburbs.

Victorian Premier, Daniel Andrews, announced an initial $5,000 in dedicated support for businesses that are operating within a postcode affected last week by the return to Stage 3 restrictions. Businesses can now register their interest to receive this $5,000 grant here https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/local-lockdowns-business-support-program#register.

The program ends on 31 July 2020 so we recommend that if you are eligible that you get online now and register as the program could close earlier. 

Should there be any further State or Federal Government stimulus packages following today’s announcements, we will communicate accordingly. The Premier’s Media Centre can also be located here to get the latest announcements.

Instant Asset Write-Off Expansion

The Instant Asset Write-off has been extended for six months to 31 December 2020, which means Australian businesses with less than $500 million annual turnover will have more time to take advantage of the write-off and invest in assets to support their business. This government initiative is designed to help the economy reopen and boost economic growth. The instant asset write-off applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided they each cost less than $150,000.

You can find more information on which assets can you claim as an immediate deduction here, but feel free to contact us so we can talk you through the different thresholds, exclusions, and limits

Second Round of Cash Flow Boosts

If you received initial cash flow boosts, you’ll automatically receive additional cash flow boosts when you lodge your activity statements for each monthly or quarterly period from June to September 2020. The amount will be equal to the total amount of initial cash flow boosts you received and will be split in either two or four instalments, depending on your reporting period.

If you lodge:

  • quarterly – you will receive 50% of your total initial cash flow boosts for each activity statement
  • monthly – you will receive 25% of your total initial cash flow boosts for each activity statement

You can find more information here, or alternatively, you may contact us so we can discuss your concerns.

Company Tax Rate Reduction

Starting 1 July 2020, the company tax rate will be reduced to 26% for small- and medium-sized businesses, as part of a larger progressive plan to reduce the company tax rate to 25% from 1 July 2021. This applies to all base rate entities (BRE) – companies, corporate unit trusts, and public trading trusts – which have an aggregated turnover of less than $50 million where 80% or less of the entity’s turnover for the year is classified as base rate entity passive income. More details can be found here.

Regulations confirm no SG obligation on JobKeeper payments where work is not performed

The federal government has registered the Superannuation Guarantee (Administration) Amendment (Jobkeeper) Payment Regulations 2020.

These regulations ensure that amounts of salary or wages that do not relate to the performance of work and are only paid to an employee to satisfy the wage condition for getting the JobKeeper payment are prescribed by the Regulations as excluded salary or wages.

The effect is that these amounts are excluded from the calculations of an employer’s superannuation guarantee shortfall and the minimum compulsory superannuation contribution an employer is required to make in respect of an employee to avoid a superannuation guarantee charge liability.

Likewise, the Regulations recognise that an employer is only entitled to a JobKeeper payment for its employees if the business has suffered a substantial decline in turnover.  In these circumstances, it is appropriate to require employers to only make minimum superannuation contributions in respect of amounts that are required to be paid to an employee for the performance of work.  

Employers would not be required to make contributions in relation to additional amounts paid to satisfy the wage condition (for example, the amount by which $1,500 exceeds an employee’s normal pay).  

Editor:  If you are concerned about the calculation of compulsory superannuation for any employees supported by JobKeeper, please contact our office. 

Tags: , , , , , , , , , ,

Categorised in: Articles