Warning: there has been a spike in COVID-19 related scams, including fraudulent text messages and emails. Please visit the Australian Cyber Security Centre for some examples and Stay Smart Online for up to date information on emerging scams.
UPDATE 29 OCTOBER:
A new Small Business Advice for Recovery Grant Program is now open.
Small businesses can receive a grant of $750 toward the cost of engaging an appropriate consultant to provide advice or a service that will assist the business in its recovery from the COVID-19 pandemic. This is a similar program to previously available grants.
The Grant program opened 28 October 2020 and closes on Monday 22 February 2021 at 12 noon, or when the funding has been fully allocated, whichever occurs first. Total funds available for this program for eligible Tasmanian businesses is $1.538 million. A maximum of 2 050 grants will be awarded.
Advice could cover issues including:
- cash flow projections
- managing risk
- diversifying the business enterprise
- adding value to products and services produced by the business enterprise
- marketing plans and or business plans
- legal matters
- supporting the lodgement of an application for the Business Growth Loan.
Grant application form, guidelines and FAQ are available here.
UPDATE 28 OCTOBER:
Personal tax cuts & tax withholding tables
The recent changes to personal income tax thresholds announced by the Government during the 2020 Federal Budget have now been incorporated into the withholding schedules and tax tables available on the ATO website, and these will apply to payments made on and from 13 October 2020.
As the changes to withholding are made part-way through the income year, employers and other payers who are unable to immediately implement these changes into their payroll have until 16 November 2020 to do so.
MYOB Essentials and Xero have both now updated their tax tables to the new withholding rates, so from Friday, 23 October onwards the new rates will be applied to employee pays when processing your software. MYOB have also advised that a patch to bring in the new rates will be released for their AccountRight software shortly – this will need to be downloaded and installed for the new tax rates to take effect.
Users with other software are advised to contact your software provider if you have any troubles, or if you have any questions in relation to the changes to the tax tables, please contact your Ruddicks client advisor.
UPDATE 20 OCTOBER:
The new Event Infrastructure and Critical Support Small Business Grant Program is now open and application will close at 12 noon on Friday 13 November. This program aims to assist suppliers of event services whose operations have been substantially impacted by COVID-19 related restrictions. The grant funding will support sustaining fixed costs such as wages, rent and servicing debt associated with business assets purchased before 29 February 2020.
The grant program will be structured in four tiers based on business turnover in either the financial year 2018-19 (preferred) or in the 2019 calendar year:
- Turnover of more than $1.5 million per annum may be eligible for a grant of $100,000.
- Turnover of less than $1.5 million but more than $1 million may be eligible for a grant of $50,000.
- Turnover of less than $1 million but more than $250,000 may be eligible for a grant of $15,000.
- Turnover of less than $250,000 but more than $50,000 may be eligible for a grant of $5,000.
This is a competitive, merit based grant program with limited funding of $2.5 million.
Grant guidelines and application details are available here.
UPDATE 13 OCTOBER:
The Commissioner of Taxation has registered a new, additional alternative decline in turnover test for the purposes of qualifying for JobKeeper 2.0.
The test addresses a situation where the business had temporarily ceased trading for at least a week during the comparable 2019 period (e.g. when testing for the September 2020 quarter, the comparable period is the September 2019 quarter). The business must have re-opened by 28 September 2020 to be able to rely on this test.
The temporary business cessation must have happened due to events or circumstances outside of the ordinary course of business. Examples of such circumstances given in the legislative instrument include a move to new purpose-built premises and blackouts. Cessation of trading for public holidays, planned leave or during the off-season for a seasonal business will not qualify for the use of this test.
If a business is eligible to use this alternative test, they have a choice of 2 options: either
- compare the September 2020 quarter (or the December 2020 quarter for phase 2 of JobKeeper 2.0) to the equivalent period in the 2018 year, i.e. September 2018 quarter or December 2018 quarter, OR
- compare the September 2020 quarter (or the December 2020 quarter for phase 2 of JobKeeper 2.0) to the 3 months immediately before the month when the business ceased trading.
Please contact us if you think you might qualify for the use of this new alternative test.
UPDATE 29 SEPTEMBER:
- The JobKeeper 2.0 page has been updated with the latest guidance from the Government and the ATO, including a summary of alternative turnover tests.
- Our Applications for Concessions page has been updated with links to currently open grants and other resources.
- Our Processing JobKeeper in Accounting Software page has been updated with links to MYOB and Xero information in relation to JobKeeper 2.0. Note: we have also included instructions for businesses that are receiving JobKeeper 1.0 but are not eligible for JobKeeper 2.0.
UPDATE 9 SEPTEMBER:
- [NOW CLOSED]The Small Business Continuity Grant was due to close on 7 September, however it has been extended to Friday 2 October, or until all funds are allocated whichever occurs first.
As of Friday 4th September, 447 grants had been allocated as part of the $2 million program, leaving funding available to support a further 2219 applications. The program provides $750 each to eligible businesses to engage a qualified specialist to provide advice on business continuity planning.
The Tasmanian government's Landlord Support Fund is now open. A landlord or their agent can apply for up to $2,000 in a one-off financial support payment if they have current residential leases and tenants who have fallen behind in paying rent. This program will run from 7 September to 1 December 2020.
UPDATE 1 SEPTEMBER:
- [NOW CLOSED] Tasmanian government's Small Business Energy Support Grant Program opened for grant applications on 31 August and will run until 12 noon 26 October 2020. One off grant payments of $1,000 are available to eligible businesses who have not been eligible for the COVID-19 electricity, water and/or sewerage wavier available from service providers from 1 April 2020.
- The JobKeeper extension legislation was passed by Senate on Tuesday 1 September, extending the program by six months to 28 March 2021. Under the extended rules, JobKeeper 2.0 will replace the current flat $1,500 a fortnight subsidy with a two-tiered system. The subsidy will consist of a $750 fortnightly payment for those working fewer than 20 hours pre-COVID and $1,200 per fortnight for those who worked 20 hours+. This well then be reduced further from January 2021 to $650 and $1,000, respectively. A legislative instrument detailing the rules for the new rates and the new eligibility criteria is expected to be issued shortly by Treasurer.
UPDATE 18 AUGUST:
On Friday 14 August, the Treasurer registered a legislative instrument which extended the definition of eligible employees from 3 August. The remainder of the announced JobKeeper 2.0 is yet to be legislated. We go through the new employee eligibility rules in detail here.
UPDATE 13 AUGUST:
Tasmanian government's Tourism Industry Market Support Program opened for grant applications on 12 August and will run until 30 October 2020 or until all the funds are allocated (whichever occurs first). A total of $750,000 is available and allotment occurs on a first in, first assessed basis.
This grant program is aimed at businesses that provide one of the following tourism industry related services:
- Visitor Attraction
- Backpacker / Youth Market
- Self-Contained Accommodation
- Hosted Accommodation
- Hotel / Motel / Caravan Park
- Tour / Transport Operator
The Program will offer two types of grants:
Grant 1 up to $1 000 available as one off marketing support grants.
Grant 2 up to $2 500 available on a dollar for dollar matched basis as one off marketing support grants.
Program guidelines including eligibility criteria are available here.
UPDATE 11 AUGUST:
- [NOW CLOSED] A further round of COVID-19 Small Business Continuity Grant Program from the Tasmanian government opened on Monday 10 August and will run until 12 noon on 7 September, or until all the funds are allocated - whichever comes first. This second round will provide 2,666 grants of $750 each to eligible businesses to engage a qualified specialist to advise on business continuity planning.
- The Tax Institute has issued an updated infographic summarising the JobKeeper extension changes.
UPDATE 7 AUGUST:
As we had hoped, the government announced the more relaxed eligibility conditions for JobKeeper 2.0 as a result of the lockdown in Victoria. The result is that businesses that experience a significant decline in revenue in the later part of the year compared to the earlier part of the year, will be more likely to qualify for the JobKeeper payments.
Broadly, to qualify for the JobKeeper payment for the period from 28 September 2020 to 3 January 2021, the reduction in turnover test will now need to be met for the September 2020 quarter only (as compared to the September 2019 quarter).
To qualify for the JobKeeper payment for the period from 4 January 2021 to 28 March 2021, the reduction in turnover test will now need to be met for the December 2020 quarter only (as compared to the December 2019 quarter).
Additionally, eligible employees will be re-defined to include employees engaged after 1 March 2020 and before 1 July 2020.
Please refer to our JobKeeper 2.0 article for additional details and links to the Treasury factsheets.
UPDATE 5 AUGUST:
Treasury has released an updated FAQ factsheet for the Commonwealth HomeBuilder program. You can access additional information about the program on this Treasury page and information about the Tasmanian HomeBuilder Grants on the Tasmanian State Revenue Office page.
UPDATE 4 AUGUST:
- Our article summarising the key features of the new Small Business Sustainability and Recovery Grant Program is now available. Please note that applications will close 12 noon on 24 August 2020.
- The Tax Institue has prepared a detailed 5 page infographic illustrating the proposed new JobKeeper 2.0 rules.
UPDATE 30 JULY:
- A small number (3,000) of $5,000 grants will be available under the Tasmanian Government's COVID-19 Small Business Sustainability and Recovery Grant Program with applications opening at 12 noon on 3 August 2020 and closing at 12 noon on 24 August 2020. Program guidelines including eligibility criteria are available here.
- The ATO has released a cashflow boost estimator which you can download here.
- Our summary of the announced JobKeeper 2.0 is now available.
UPDATE 9 JUNE:
The Instant Asset Write Off (IAWO) concessional threshold of $150,000 will be extended by 6 months to run until 31 December 2020.
Originally the $150,000 threshold was legislated until 30 June 2020 and IAWO is due to revert to the $1,000 threshold from 1 July 2020. Legislation is expected to be introduced shortly to reflect the extension of the $150,000 threshold. Additional information on IAWO is available in our article on Depreciation Concessions.
UPDATE 3 JUNE:
The Commissioner of Taxation has granted additional time to enrol in JobKeeper and confirm employees for those businesses which are enrolling and identifying eligible employees and business participant for the first time after May: they must enrol and confirm employees in the month they wish to claim for. Previously, they were required to do this by the end of the relevant JobKeeper fortnight. Please visit the ATO website to see the key dates for JobKeeper.
UPDATE 25 MAY:
The Commissioner of Taxation has now granted a deferral of the due date for the JobKeeper scheme monthly declaration to the 14th of each month, commencing from June.
As such, the business monthly declaration for reimbursement of JobKeeper payments for the month of May will now need to be completed by 14 June.
More information on making the monthly declaration is available here.
UPDATE 19 MAY:
The ATO is maintaining a page of JobKeeper Key Dates. Please familiarise yourself with this page and bookmark it for future reference.
UPDATE 10 MAY:
- [NOW CLOSED]Applications for loans under the Tasmanian Business Support Loan Scheme will close at 5pm on Monday 11th May.
- Tax audit shield insurance and JobKeeper
- On 7 May 2020, the Tasmanian Parliament passed the COVID-19 Disease Emergency (Commercial Leases) Act 2020 (the Act). The Act implements the Code of Conduct for commercial tenancies announced by the Prime Minister on 7 April 2020.
UPDATE 7 MAY:
The ATO has released information on the modified turnover test for group employer entities.
UPDATE 5 MAY:
- The guidelines for the Tasmanian Payroll Tax Waiver for JobKeeper payments have been released.Information about other concessions in relation to Tasmanian state taxes is available on the Tasmanian State Revenue Office website.
- The ATO has released a ruling on "schemes" in relation to the JobKeeper Payments. The ruling provides examples of what the situations that the ATO would consider to be contrived arrangements.
- The ATO has released a ruling on applying the decline in turnover test in relation to the JobKeeper Payment.
- Treasurer has released JobKeeper amendments which include a modified turnover test for service entities which provide employment services to entities within the same group.
UPDATE 1 MAY:
- Tasmanian government will exempt JobKeeper payments by employers of Tasmanians from payroll tax. We anticipate further details to be provided in due course.
- Tasmanian government's grants program will close to new applicants on 4 May. You can find application and eligibility details on the Business Tasmania website.
UPDATE 28 APRIL:
JobKeeper deadlines extended
The ATO has issued guidance with new key dates. Significantly, the following dates have been extended:
- JobKeeper enrollment deadline extended from 30 April to 31 May in relation to April and May JobKeeper fortnights
- The deadline for making at least a $1,500 before-tax payment to each eligible employee has been extended from 30 April to 8 May in relation to the two April JobKeeper fortnights
The ATO have made the following statements in relation to the extended payment deadline:
"You should pay your employees for each JobKeeper fortnight you plan to claim for. The first fortnight is from 30 March – 12 April and each JobKeeper fortnight follows after that.
For the first two fortnights (30 March – 12 April, 13 April – 26 April), we will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you by 8 May. This means that you can make two fortnightly payments of at least $1,500 per fortnight by 8 May, or a combined payment of at least $3,000."
What happens if your predicted fall in turnover is ultimately incorrect
Broadly, as long as your assessment was reasonable when you made it, you will not lose eligibility for the JobKeeper Payments. If the variance between your prediction and actual results is significant, the ATO may review your calculations for reasonableness. You therefore need to retain records of your projected turnover calculations.
The integrity provisions will continue to apply in respect of contrived arrangements that are aimed at ensuring that the turnover test is satisfied.
Banks' JobKeeper loans hotlines
Australian Banking Association has compiled a list of the banks' dedicated hotlines for JobKeeper loans. If your business needs funding to bridge the gap until the first JobKeeper Payment, please contact your bank using the number on the list.
UPDATE 27 APRIL:
JobKeeper and service entity arrangements
The Treasurer has issued a JobKeeper Update announcement which clarifies a few points but most importantly, states that an alternative turnover test will be available for businesses that use service entity type arrangements, where there is a separate entity employing staff for the main business:
"The Government will provide an alternate decline in turnover test for the eligibility of special purpose service entities that provide employee labour to group members and that have not met the basic test for decline in turnover. This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties. The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity."
JobKeeper and 16-17 years old students
The JobKeeper Rules will be updated to provide that full-time students who are 17 years old and younger, and who are not financially independent, are not eligible for the JobKeeper Payment. This clarification will apply prospectively, which would mean an eligible employer that has already met the wage condition of paying such an employee $1,500 for a fortnight could be entitled to a JobKeeper Payment in arrears for that fortnight.
Audit insurance covers JobKeeper audits and reviews
We have been notified that the tax audit insurance (Audit Shield) product which many of our clients have taken up, will be including an endorsement to their policy which will include the cost of advice in relation to JobKeeper audits and reviews. This endorsement will extend not only to renewals but will be automatically applied to all current and existing policies. You do not need to do anything to have this endorsement added to your current policy or renewal policy. This endorsement is being added at no additional cost in premium.
This is very positive development as audits in respect of government funding are not usually covered by insurance. This will add a degree of comfort to the businesses who have taken out the Audit Shield policy and who are claiming the JobKeeper Payment, knowing that should the ATO review their eligibility, our costs of dealing with the ATO queries will be covered under the policy.
The new endorsement only covers JobKeeper payments. All reviews or audits of other COVID-19 support packages are not covered unless they form part of an audit of a lodged return (i.e. BAS audit, Payroll Tax audit etc.).
It only covers post payment reviews or audits so any issues or queries with the JobKeeper application process are not covered.
UPDATE 23 APRIL:
UPDATE 22 APRIL:
UPDATE 20 APRIL:
The ATO have published the guidance on the application of the turnover test to qualify for the JobKeeper payments
JobKeeper enrolments are now open. Enrolment instructions are available on the ATO website.
UPDATE 16 APRIL:
The ATO has released some further information regarding JobKeeper Payments for Sole Traders and Other Entities.
UPDATE 15 APRIL:
It is clear that having access to the ATO Business Portal via the MyGovID authentication method (different to MyGov) is going to be critical for employers. If you need assistance with setting up MyGovID please refer to our article outlining the necessary steps or give us a call.
Commercial Tenancies - Code of Conduct
Consumer, Building & Occupational Services (CBOS) have created a page which provides an overview of the protections offered by the Code and includes the department's contact details if you need further information.
UPDATE 14 APRIL:
Treasury has released an updated FAQ factsheet
UPDATE 9 APRIL:
Tasmanian Payroll Tax Waiver
Tasmanian State Revenue Office has released the guidelines and applications forms for the waiver of payroll tax for:
- Hospitality, tourism and seafood industry businesses for the last four months of 2019-20.
- Other businesses with payrolls of up to $5 million that have been adversely affected by the pandemic can have their payroll tax waived for April to June 2020.
Fair Work Act & JobKeeper
A number of amendments were made to the Fair Work Act in the same package of legislation as the JobKeeper legislative framework. The legislation was passed by Parliament yesterday, on 8 April. These amendments, broadly, introduce additional flexibility for employers who are eligible for the JobKeeper wage subsidy, to allow them:
- to make temporary and partial stand downs in certain circumstances
- to alter employees’ usual duties and locations of work in certain circumstances
- to agree with employees on altering an employee’s days and times of work and use of annual leave in certain circumstances.
These measures are expected to interact with the JobKeeper payment so that employers may be able to reduce wages payable to their employees (by way of reduced hours, for example) to be closer to the level of wage subsidy provided by the JobKeeper payment of $1,500 per eligible employee per fortnight. A number of conditions will apply requiring, for example, the changes to working arrangements to be reasonable and employee agreement to such changes.
Fair Work is expected to release more details on its Coronavirus and Australian workplace laws page in due course.
UPDATE 8 APRIL:
- The JobKeeper wage subsidy legislation has been released and was passed late on 8 April, however it only provides a legislative framework to allow the Treasurer to establish JobKeeper Payment rules. These rules have not yet been released by the Treasurer so the details remain unknown.
- Mandatory Commercial Tenancy Code of Conduct issued
- [NOW CLOSED] Tasmanian Small Business Emergency Support Grant Round 2 opened
- For the purpose of this Round:
- the definition of small business has been lifted to having less than 25 FTE (full-time equivalent) employees,
- the eligibility is no longer limited to targeted areas but is available to any business experiencing severe hardship that meets the criteria of a loss in revenue of greater than 30%.
- For the purpose of this Round:
- [NOW CLOSED] Tasmanian Small Business Hardship Grant opened
- To be eligible for the Hardship Grant, businesses must:
- demonstrate severe hardship,
- show they are able to operate in the current environment
- provide necessary products and services to the community,
- or are in strong positions to continue to support local jobs and economic growth into the recovery phase.
- To be eligible for the Hardship Grant, businesses must:
- The ATO released a simpler method to calculate deductible working from home expenses for the period from 1 March to 30 June 2020.
UPDATE 6 APRIL:
- Eligible small businesses can receive the 50% wage subsidy for apprentices and trainees in the Supporting Apprentices and Trainees measure from 1 January to 31 March 2020, and the JobKeeper Payment. Where small businesses receive the JobKeeper Payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards. The registrations for the 50% wage subsidy for apprentices and trainees are open.
- Based on additional guidance issued by Treasury, for charities registered with the Australian Charities and Not-for-profits Commission (ACNC), they will be eligible for the JobKeeper wage subsidy if they estimate their turnover has fallen or will likely fall by 15% or more relative to a comparable period.
- A summary of all the States' and Territories' economic stimulus response packages
UPDATE 2 APRIL:
Following discussions with the Tasmanian government, Launceston City Council approved on 2 April a number of measures as part of its Community Care and Recovery Package. These include a remission of the general rate and general charge for 6 months for the Commercial and Sport and Recreation rates categories. Certain businesses, such as supermarkets, petrol stations, bottleshops and chemists are excluded. Further details of this and other measures are available on the Council's website.
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The content of this newsletter is general in nature. It does not constitute specific advice and readers are encouraged to consult their Ruddicks adviser on any matters of interest. Ruddicks accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. This information is current as at 8 May 2020, and was published around that time. Ruddicks particularly accepts no obligation or responsibility for updating this publication for events, including changes to the law, the Australian Taxation Office’s interpretation of the law, or Government announcements arising after that time.
Any advice provided is not ‘financial product advice’ as defined by the Corporations Act. Ruddicks is not licensed to provide financial product advice and taxation is only one of the matters that you need to consider when making a decision on a financial product. You should consider seeking advice from an Australian Financial Services licensee before making any decisions in relation to a financial product. © Ruddicks 2020