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How to effectively respond to future COVID-19 outbreak?

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Author: Harry Hoang

During the COVID-19 restrictions, I believe micromanagement at work is ineffective because it involves spending a lot of time and effort while receiving few gains. This reminded me of my early days as a bookkeeper when my manager would get us to enter every single piece of information from the invoices into our accounting system manually. The desktop-based accounts system did not allow for remote access, making it impossible for users to log on if they chose to work from home. This tedious and time-consuming experience made me wonder how such organisations could survive the COVID-19 crisis when all office rules and regulations were suddenly disrupted. 

Businesses can now afford to let their accounting and finance staff work from home as a result of the technology advancement of online cloud-based accounting system products. Most business owners considered these products as a good return on investments (ROIs) since accountants or bookkeepers can easily access the daily accounts and deliver their work whilst their workplaces remain closed. 

Additionally, most bookkeepers prefer using cloud-based accounting systems such as QuickBooks or Xero as they provide benefits including the ability to share and collaborate with ease. The old desktop approach gave employees limited access to accounts, making collaboration with colleagues and advisers difficult. 

In the last four years, with the onset of cloud technology which has automated data entry and basic bookkeeping, moving to online accounting systems has proven to be a good investment for business owners. One example is the development of Receipt Bank to scan and analyse bills and receipts, meaning bookkeepers do not have to spend 15 minutes or more entering detailed information manually from paper into a computer. 

Customers are also able to see a copy of each receipt when it is attached to transactions in accounting systems like Xero or Intuit QuickBooks Online. This allows businesses to save at least $100 per month on database storage management. Another advantage of cloud accounting is that it gives business owners, employees and customers real-time access. My clients can access receipts from the past three years of car insurance payments with one click while negotiating with their insurers, enabling them to make informed decisions on the spot.

Now we must have a contingency plan to mitigate the risks of business disruptions. The COVID-19 has permanently changed the way businesses and companies operate. Create a simple business plan that covers the following key areas:

  • Online timesheet and rostering plan for your staff 
  • Accounting plan for online sales (if you must close your premise)
  • Communication plan with clients

Micromanagement of finances is becoming outdated and less popular, and business owners should expect their bookkeepers to use cloud technology to ensure that bookkeeping is done effectively and efficiently. The “new normal” post-COVID-19 restrictions are likely to stay for at least another year. Reducing your costs with cloud-based accounting systems is a good choice, allowing you to protect the health and well-being of your staff. 

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How to avoid common Cashflow Boost Grant Application mistakes?

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Up-to-date financial information and bookkeeping are vital if you wish to receive any Government support. Without a set of reconciled and tidy books, your compliance is not ready and, as a result, your business is unlikely to become eligible for any government support.

Running a business is already a challenging talk, running a business during COVID-19 is like riding a bicycle up a hill! Fortunately,  we are in Australia where the Government is very efficient in terms of providing lifesavers packages like Cashflow Boost or Jobkeeper. We have spoken to our friends who work in other parts of the world where there is almost no financial support provided to them, other than a small amount of tax savings! However, even here in Australia, we continue to see businesses who have missed out on all of the financial support from the Government due to a lack of compliance with the Tax Office. 

This article shares real mistakes we have seen over the past six months:

  • Missed the active ABN test for Cashflow Boost. We have seen at least five businesses who came to us who were not entitled to Cashflow Boost due to their late lodgements of either their tax return in 2018-2019 or BAS during 2019-2020 financial years. Lodging tax returns and BASs late are the most frequent mistakes we have seen in Australia. However, on a normal day, the worst aspect is that you will receive a penalty and interest from the ATO. In this case, missing $100k support from Cashflow Boost really hurts. The $100k cash support is tax-free, so it is worth at least $130k gross earning! There are some circumstances in which we can argue with the Tax Office to prove that our client has an active ABN but 9/10 times the ATO is not in favour of businesses who don't meet these basic compliance requirements! 
  • No STP compliance, no Jobkeeper. In some industries like retail and hospitality, small businesses still pay their staff in cash and get accountants to worry about super and payroll later. The ATO strictly states no to many Jobkeeper applications who do not have good payroll record keeping. There are a number of Jobkeeper tests to prove that you began recording your employees in your books before the cut-off date 12th March or 1st July, if you cannot provide evidence like payslips or EFT transfers then your employees are not eligible!
  • Incomplete turnover books that make it impossible to test. These days, there are still businesses who don't have any form of record-keeping for their sales. We see businesses who are selling goods in the open market, who mostly use cash and keep no record of their sales. Most of them are not registered for GST but do not forget you still need to keep records for tax return purposes. The turnover test requires us to go back 12 months so even if we try to help reconstruct turnover for the current testing period, it is almost impossible to go back 12 months without any evidence!
  • DIY Jobkeeper testing can lead to failed results without seeking a second opinion from experts. I have written an article (Part 1 & Part 2) on this, however, it is still a very common practice! Jobkeeper testing is complex, self-assessment tests will never get you the exact results.

Compliance is probably the least important in your daily priority tasks. Businesses manage to get their compliance up to date to keep them out of trouble. However, during this pandemic, compliance is a lifesaver! It is always worth it to pay someone with experience to take care of all your problems and concerns during good times, but also to help keep you navigate the difficult times!

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Changes on Xero Payroll Platform to implement the latest tax tables

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The Budget will bring forward income tax cuts scheduled for 2022 as announced during the 2020 Federal Budget. It means that more than 11 million taxpayers are eligible for tax cuts backdated to 1 July 2020. 

Tailored Accounts Xero Payroll Specialist Fuzuki Nishimura closely observed the latest change of Xero payroll platform in reflecting the new tax tables for PAYG withholding. Xero has now released the updated PAYG tax tables so that your taxes will be calculated on the updated tables for all future pay runs. 

Fuzuki’s tips to all SME clients to ensure an error-free pay run under the new tax cuts: 

  • If you have an existing pay run in the Xero pay run draft, please reset this to ensure the update pulls through. 
  • You do not have to process the manual adjustments as Xero has already uploaded the tables as of the time of this article. 
  • Xero also does not need to load the tax table manually. All figures will be automatically updated. 

Benefits to your employees:

  • The income tax threshold for 19 per cent will increase from $37,000 to $45,000, and lifting the 32.5 per cent threshold from $90,000 to $120,000, according to the ATO.

Tax cuts on a different level of earnings are as below:

  • $40,000 earnings - 21% tax reduction
  • $60,000 earnings - 17% tax reduction
  • $80,000 earnings - 11% tax reduction
  • $160,000 earnings - 5% tax reduction
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Common mistakes that made businesses think they failed the JobKeeper 2.0 test (Part 2)

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Continuing part 1 of the article, here are another two common misunderstandings that most business owners have experienced:

  • Using the profit and loss report from XERO to work out a 15% or 30% drop.

We would not recommend using a profit and loss report in XERO, especially if you are testing on a cash basis. There are transactions that we have seen in this report that shouldn’t be accounted for as GST cash turnover. We strongly suggest you only use the activity statement report in XERO to work out GST turnover for JK testing purposes. As mentioned above, it is essentially a BAS preparation exercise, but you can only use GST turnover data. There are two common mistakes that we see in this step:


If you use BAS GST turnover and if your G1 is reported as GST inclusive, you have to subtract A1 (GST) out of G1 to get the net GST turnover (without GST). We had a client who used gross GST turnover to test and they thought that they failed the JK test until we completed it correctly for them!
For your reference period (July to September 2019), you need to make sure you check your lodged BAS with the ATO (via the ATO portal) with your current figures. As it has already been 12 months since your BAS was lodged, someone could have made some changes in your reference period. Therefore, if you assume it is correct, you might get the wrong result.

  • I am not qualified for alternative tests

This is a very common misconception. When it gets too hard, we tend to give up. Because the alternative tests are quite complex, unless you are an accountant, we do not recommend you do it by yourself. This is because we as accountants have spent a lot of time reading and learning to develop a sound understanding of the tests. Further, we have had a lot of experience doing the tests for our hundreds of clients. However, it is important to go through all 26 sets of tests thoroughly and in a timely manner, as you will likely need to retest again in January 2021 for the January to March period. Also, more than 50% of our clients who weren’t qualified when they completed the basic test found that they were when they did an alternative test. Could be one of those who would qualify if you took an alternative test?


The legislation is new, so don’t expect it to be one size fits all. There are newly established businesses, high growth businesses and businesses with a lumpy turnover. These businesses are unlikely to pass the basic test. Possibly because their turnover in July to September 2020 could have doubled compared to the July to September 2019 period, despite the fact they have been severely impacted by Covid. JK 2.0 will be a great help to many SMEs, as there are still many unknowns we will have to face before we find a vaccine. Our final advice is to invest in your time - hire an expert to give you a second opinion and don’t give up as there will be a JK 2.0 January to March period!


Good luck and don’t be disappointed if you are not qualified for the JobKeeper 2.0 Program. It means that your business is doing better than other businesses in this difficult time. 

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Common mistakes that made businesses think they failed the JobKeeper 2.0 test (Part 1)

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JobKeeper (JK) 1.0 was a big challenge for us as it involved a new set of complex laws that required tedious documentation and reconciliation to ensure everything was executed smoothly! JobKeeper 2.0 is even more challenging because many businesses have to complete both JK 1.0 and 2.0 tests.

Since the release of JK 2.0 rules by the Australian Tax Office (ATO) and the alternative tests, our team has been working tirelessly to make sure our clients are entirely confident of whether or not they are going to receive JK payments for the next three months. The good news is that over 80% of our clients who were eligible for JK 1.0 also qualified for JK 2.0, however over 50% of the JK 1.0 participants that were qualified via alternative tests.

The reason for sharing this article is that we continue to hear business owners say they won’t qualify for JK 2.0 after doing the test themselves. As mentioned above, the tests involve complex sets of rules that require substantial accounting knowledge and experience to understand. In my opinion, it takes between one and four hours to determine if a business is qualified or not. There are fewer hours required for businesses who passed the basic test, while far more hours are required for those that have to go through all 26 sets of tests. So if you doubt your DIY test result, you should speak to one of our accounting staff, we often do the test for no cost!

Here are common misunderstandings that cause false test results:

  • I can use the test kit provided by XERO to work out if I am qualified or not. 

This is very wrong! XERO provides a quick test kit, but I would not recommend anyone use it unless you are simply after a quick result and plan on going through the rest of the test later. The XERO test kit does not take into account various factors that could give you the wrong result. For example, if you posted a journal to an income account and ticked the box that includes this journal into a cash report, it is reported as GST turnover in a XERO report. This result could give you the wrong figure for JK GST turnover testing purposes. Further, there is no alternative test provided.

  • As long as my books are completed up to 30th September, I am ready to do the test.

This is only partly right, there are a series of checks to make sure your books are ready for JK tests. Here are some tips:

  • First, you need to determine if your BAS is on a cash or accrual basis. If you are on cash (as are most small businesses) then you have to make sure your bank reconciliations are done with no outstanding or unreconciled transactions for the periods that you are testing and for the reference period (e.g. July - September 2019). 
  • Re-do your BAS for the reference periods to make sure that your current data matches with the BAS that was lodged with the ATO (access via the ATO portal). Periods that you need to check: July - September 2019, April - June 2010 and December - February 2020. For some other tests, you also have to check from March 2019 until June 2020.
  • When going through the GST audit reports for all the BASs above, ensure you check all transactions coded with the following GST code: GST Free Income & BAS excluded. Keep in mind that some of these transactions could be fine for BAS purposes but will need to be checked for JK turnover purposes.
  • Go through the GST turnover definition and remove any income that shouldn’t be accounted for as GST turnover. Keep in mind that some of these income streams could be reportable in G1 as your BAS turnover, but should be excluded for JK 2.0 GST turnover. For example, an ACNC registered organisation who receives Government funding that is considered G1 should be manually taken out for the purpose of this test. Another example could be client reimbursements, some of these transactions could be coded as GST free income and hence reported in G1, however, they should be excluded from the JK turnover test. 
  • Donations are another ledger that needs to be checked carefully. Finally, if your business is exporting, you have to include all export sales to your JK turnover test. Whereas they could be reported differently in your BAS turnover.
  • Check all manual journal transactions when going through GST audit reports for all BASs above. Some of these transactions could be excluded from JK turnover testing purposes.
  • If you are doing the books but not doing Accounts Receivable, you need to double-check with the Accounts Receivable team to make sure they have finished all invoices/credit notes for testing for the reference periods mentioned above.
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Federal Budget Summary 2020-21

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Author: Mark Thirlwell, MAICD Chief Economist 

Original article can be accessed here

Even before today’s announcements, the Prime Minister had described tonight’s budget as ‘arguably one of the most important, if not the most important since the end of the Second World War.’ He made a fair point. Budget 2020-21 delivers a huge, multi-billion-dollar deficit on a scale not seen since the end of that global conflict.

I said in my pre-budget update that this Budget needs to achieve three main goals:

  • It needs to continue the government’s impressive work in supporting the economy and offsetting the large, negative demand shock that crushed economic activity and drove up unemployment earlier this year.
  • It needs to start helping the economy adapt to the major supply shocks caused by COVID-19 and to prepare for the post-pandemic worlds.
  • And while the Government’s new fiscal strategy correctly prioritises restoring growth over fiscal repair, the budget should also set out the government’s thinking on its plans to restore fiscal health in the medium term.

So how did they go?

In terms of the most important of the three – supporting economic demand and ensuring that the recovery remains on track – Budget 2020-21 offers a substantial dose of fiscal medicine. The tax relief for both households and businesses is significant and represents a substantial injection into the economy. There are also important incentives for hiring aimed at driving down the unemployment rate.

With regard to the second objective, the Budget is arguably less ambitious, although there are a range of measures which should have a positive impact, ranging from the payoffs from increased support for business investment and R&D to new manufacturing grants and pledges to reduce red tape and improve incentives.

Finally, prospects for fiscal repair are in large part conditional on the success of the government’s new fiscal strategy, which prioritises growth and employment in the short-term. Getting growth (and therefore receipts) back up and unemployment (and therefore payments) back down will be an important part of mending the budget. Beyond that, and based on the Treasurer’s fiscal ‘forward-guidance’ that the government’s attention would only turn to fiscal consolidation ‘until the unemployment rate is comfortably back under 6 per cent,’ the economic projections set out here suggest that we will have to wait for several years before that target is met: until 2023-24 on Treasury forecasts.

The budget certainly lived up to its billing in terms of the historic size of the debt and deficit numbers announced:

  • Budget 2020-21 heralds the start of a new fiscal era. An era of more government spending, bigger deficits, and more government debt. It is also an era where fiscal policy has replaced monetary policy as the key macro lever in the economy, and where the budget has been assigned a specific goal in terms of the unemployment rate.
  • Budget 2020-21 estimates a deficit of $213.7 billion (11% per cent of GDP) in the underlying cash balance this year, a pandemic-driven outcome that is a long, long way from the modest surplus forecast in the 2019-20 MYEFO. That deficit is expected to fall to a still-sizeable shortfall of $112 billion (5.6 per cent of GDP) in 2021-22 with further deficits predicted out through 2023-24, by when the deficit is expected to have fallen to three per cent of GDP.
  • Gross government debt is forecast to rise to $872 billion (44.8% of GDP) by the end of 2020-21 and to continue to rise to $1,016 billion (50.5 per cent of GDP) by 2022-23. Net debt as a share of GDP is forecast to rise to 36.1 per cent by the end of the current financial year. Gross debt is forecast to stabilise as a share of GDP at 55 per cent in the medium term while net debt is forecast to peak at less than 44 per cent of GDP in 2023-24 and then gradually decline over the medium term to less than 40 per cent of GDP by 2030-31.
  • Treasury predicts that the economy will shrink by 1.5 per cent in 2020-21 and grow by 4.75 per cent in 2021-22.
  • Unemployment is forecast to rise to 7.25 per cent in the June quarter of 2020-21 per cent before falling to 6.5 per cent in 2021-22, six per cent in 2022-23 and 5.5 per cent in 2023-24.
  • The budget delivers substantial tax relief. That includes $17.8 billion in additional personal tax relief over the forward estimates, including $12.5 billion over the next 12 months. This will be achieved by bringing forward stage two of the already-legislated personal income tax plan from 2022-23 to 2020-21 – so backdated to this year - along with a one-off additional benefit from the low and middle-income tax offset (LMITO - the LMITO had been due to be removed at the same time as the stage two tax plan was implemented). Household incomes will be further boosted by two $250 payments to pensioners and other eligible recipients, worth an estimated $2.6 billion.
  • For businesses, tax relief is even larger. The budget introduces both temporary full expensing and temporary loss carry-back measures for businesses with a turnover of up to $5 billion. Combined, these two measures are estimated to deliver $31.6 billion in tax relief to businesses over the forward estimates, by bringing forward tax deductions or the utilisation of losses from future years.
  • The government will also increase its infrastructure pipeline by $10 billion to $110 billion over the next ten years.
  • There are substantial funds to support hiring, including $1.2 billion to support Australian businesses to employ 100,000 new apprentices or trainees and a $4 billion JobMaker hiring credit to provide businesses incentives to take on additional employees aged between 16 and 35 years.
  • There is also increased funding for research and development (R&D) including $2 billion in new incentives, $1 billion in new research funding for universities and more money for the CSIRO.

Permanent AGM reform and digital literacy

  • In a welcome move, the Government has said it will make permanent the temporary COVID-19 reforms which allow companies to hold virtual AGMs and execute documents electronically.
  • As part of its Digital Business Plan, the Government has also committed funding for a Digital Directors training package.
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How to improve your payment terms to ensure you get paid on time under COVID-19?

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According to a report released by ASBFEO (Australian Small Business and Family Enterprise Ombudsman) in March 2019, large businesses that offered payment terms of 20 days or less, rarely paid on time! Further, a survey conducted by ASBFEO in November 2018 found that over 40% of respondents had received late payments for their invoices. On a more extreme level, the survey showed that 28% of respondents received late payments for over 60% of their invoices in the last financial year. Construction, mining, retail, state government, manufacturing and large multi-sectoral businesses were at the top of the list, with late payments of more than 30 days.

Throughout the COVID-19 shutdown period, we have seen more SMEs struggling to receive payments within 30 days. This is partly due to the excuses large companies now have to delay payments. We are here to share some great tips to ensure you survive the cash flow hit during COVID-19 by improving your payment terms and policies.

14-day payment terms

Our business and our clients are mostly operating with 14-day payment terms. With regard to cash flow management, there is a big difference between 30-day and 14-day payment terms. 90% of our clients pay their staff on a fortnightly basis. Considering salaries are the biggest expense for any business, by the time you finish the 2nd payment run for the month, roughly 60% of your allocated cash for that month will be gone. By implementing a 14-day payment term, you can use payments received from customers to pay your staff within one pay cycle. Having a 30-day term means you have to find a fortnights worth of cash from somewhere else to fund your staff’s pay. Thus, if you are currently using a 30-day payment term, we strongly suggest moving to 14 days. Further, it is fair to assume your customers will respect the new payment terms, as you have to pay your staff on time.

Client approval

Make sure you get your client to sign off and approve any work you have done as soon as possible. This permits your finance team to issue invoices immediately, allowing you to collect the payment within 14 days. In the case of many SMEs, we have seen tradesmen who attend multiple jobs in a single day get tired by the end of their shift, resulting in piles of work papers that are not ready for finance to process. These days, apps like XERO or Service8 are available for tradesmen to use whilst on jobs. They allow tradesmen to collect evidence both before and after their work and allow clients to sign off and approve the work. These apps then integrate this information with their financial software to produce invoices. Paperless is the best practice!

Digital Payment Gateways

XERO user reports from 2019 show that more than 50% of customers open their invoices using their mobile phones. Therefore, you need to ensure your invoices are integrated with a payment gateway like Paypal or Stripe to allow customers to pay you with a few clicks on their phone. Most SMEs are either unaware of these payment gateways or believe they cost too much. Our analysis concludes that when compared to any bank merchant facility for credit card payments, Stripe is either equivalent in cost or cheaper as there are no ongoing or setup costs. Further, if you factor in the time and legal costs involved in chasing customers for payments, a seamless payment experience is a worthy investment!

Direct Debit

Direct Debit is becoming ever more prevalent in today's society. Applications like AfterPay are so successful because they provide millennium generation of what they want! These days, most of our customers prefer to use flexible payment arrangements as they are not good at saving cash. We are not recommending that you should implement this method as a high priority because you are not a bank nor are you being backed by rich Venture Capitalists. You should only use this option for clients who are really struggling. Debt collection agencies take a 10-20% cut of the payments you receive, and you do not want to go through a legal battle that will leave you with nothing. Further, Direct Debit could improve your customer engagement as they would appreciate the opportunity to save up and pay you when they are able. In this difficult COVID-19 environment, if you can find a mutually beneficial solution for your cash flow and your customers, I believe both will survive COVID-19 and thrive in the long term!

Due Diligence

Due diligence when preparing your budget and financial plan. I had a bad experience a few years ago when one of our junior accountants prepared a budget for us to present to the Board. Unfortunately, one of the Board members pointed out a flaw in our formula during the board meeting. As a result of that terrible experience, we always have more than one spreadsheet expert to monitor budget and cash flow management plans. If you do not have enough resources within your finance team to cross-check, then outsourcing is your best option. Practising accountant certainly has a deeper knowledge and greater experience than your in-house accountant or CFO. Budgeting and planning are more important than ever at this point in time. As we have heard many times, a bad plan is better than no plan. Using modern software and live data updates is the key to seeing your plan succeed. It will also enable your business to be agile and adapt to any forthcoming challenges.

Understand your rights and obligations

Last but not least, you must understand your rights and obligations when filing for legal action. If you have a customer that is unsatisfied with your staff’s work, you must seriously consider providing them with a partial or full refund. Through a refund, you can attempt to retain the unhappy customer for another 10-20 years. In my 13 years of business experience, I have found that most Australian customers are honest and respectful. Therefore, if they say there is a problem with the work they received, you are better off to invest some time and resources to understand the problem and to try and fix it. Don’t resort to legal threats as your first option. We are in the 21st century where customers are in the middle of our business. We are all human beings and we all make mistakes. If our customers are giving us valuable feedback to improve, we should take it on board and make some changes. 

COVID-19 is expected to last for at least the next 18 months. Therefore, it is time to seriously make changes and adapt to survive. Most importantly, if we stay together as a business community, we will survive together!

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The latest JobKeeper amendment notice

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The latest amendment to the JobKeeper 1.0 rules has been released. This seventh amendment, released on Friday 14 August, encapsulated the changes set out in the 7 August version of the “JobKeeper Payment” fact sheet, as discussed in Tax & Super’s article “When considering the latest JobKeeper changes, stay tethered to the facts”.

Note: In recognition of the short time available to employers to meet the wage condition for newly eligible employees, particularly in relation to JobKeeper fortnight 10, the ATO has given employers until 31 August 2020 to meet the wage condition for JobKeeper fortnights 10 (3-16 August) and 11 (17-30 August). See What Employers Should Do Now Below.

Entitlement based on employees

The major change is the admission into the JobKeeper scheme of employees who were on the books as at 1 July 2020, from JobKeeper fortnight 10 (3-16 August).

The rules as amended not only enable individuals who may be new into the workforce after 1 March 2020 to join JobKeeper, but also enable individuals who were employees of an entity (the “old entity”) as at 1 March 2020 (“1 March employee”) but who have subsequently left the old employer and found new employment on or before 1 July 2020, to give a nomination notice to, and join JobKeeper, through that new employer.

The individual must have ceased to be employed by the old entity after 1 March 2020 but before 1 July 2020. The reason they ceased their relationship does not matter (for example, they could have had their employment terminated, they could have resigned, or their employer may have ceased to exist). By satisfying the requirements with reference to the 1 July 2020 date, it does not matter whether the individual had previously been an eligible individual of another qualifying entity.

Additionally, if an employer qualified for JobKeeper payments for an eligible employee for a JobKeeper fortnight ending on or before 2 August 2020, that individual may still be an eligible employee for JobKeeper fortnights beginning on or after 3 August 2020 even if they terminate their employment and are later re-employed by that employer.

Provided that these individuals have not become an eligible individual (whether as an employee, business participant, or religious practitioner) under the JobKeeper scheme for another entity at any time, they do not need to retest their eligibility with reference to the new 1 July 2020 date since their eligibility under the former 1 March 2020 requirements and nomination requirements continues to be preserved.

This ensures that the JobKeeper scheme can provide support to employers that have re-employed their former employees who had been let go because of the effects of COVID-19.

Under the amendments, there are new notification requirements for 1 March 2020 employees where their employment ceased before 1 July 2020 and they are re-employed by an entity after 1 July 2020. As qualifying entities are not entitled to claim the JobKeeper payment in relation to returning eligible employees that have at any time been eligible individuals of another entity, the amendments require individuals to provide a notice to the re-employing entity if all of the following circumstances apply:

  • The individual was an eligible employee of the qualifying entity (as a 1 March employee of the entity);
  • The individual had ceased to be employed by the qualifying entity after 1 March 2020 but before 1 July 2020; and
  • The individual was re-employed by the qualifying entity after 1 July 2020.

This notice will enable an employer that re-employs a 1 March 2020 employee to determine whether or not they are able to rely on the original nomination notice that was provided to them before the individual ceased their employment. Individuals who provide a false or misleading statement may be liable to criminal and administrative penalties.

Further, the eligibility of existing employees is preserved for employees who are already covered by the JobKeeper scheme under the original 1 March 2020 arrangements. In practical terms, for JobKeeper fortnights beginning on or after 3 August 2020, individuals that were already eligible employees for their employer for any JobKeeper fortnight under the former rules do not need to retest their eligibility with reference to the new 1 July 2020 date under the 1 July 2020 requirements or satisfy any new nomination requirements.

The amendments do not allow an individual to be eligible if they either stay in employment or continue to actively engage in the business as a business participant in respect of another entity, and attempt to switch their eligibility with reference to a second employer if they have not ceased their employment or business engagement with the first qualifying entity. The requirement that the relationship must have ceased after 1 March 2020 but before 1 July 2020 prevents this from occurring.

Accordingly, where all other eligibility criteria are met, for JobKeeper fortnights beginning on or after 3 August 2020, the JobKeeper scheme can apply if an employer:

  • Employed a new employee by 1 July 2020, even if that employee has previously been an eligible individual for another entity under the JobKeeper scheme (whether as an employee or business participant) provided that the employee was not employed or actively engaged in the business of the other entity by 1 July 2020;
  • Had existing employees who were not eligible due to the former reference date of 1 March 2020, but become eligible employees under the new 1 July 2020 reference date;
  • Had existing employees who were eligible prior to the commencement of the instrument and they continue to be employed without any termination in employment and are not excluded from being eligible employees; or
  • Qualified for JobKeeper payments in respect of an eligible employee prior to the amendments commencing, and the employee ceased to be employed after 1 March 2020 but was later re-employed by the same employer. However, this only applies if no other entity qualified for JobKeeper payments in respect of that individual for any JobKeeper fortnight.

However, for a qualifying entity to claim the JobKeeper payment in respect of an eligible employee for a JobKeeper fortnight:

  • The employee must continue to meet other eligibility criteria including being in the required employment relationship with the entity and not be excluded from eligibility; and
  • The entity must continue to meet other eligibility criteria including meeting the wage condition requirements.

The existing notification requirements for entities that first start to participate in the JobKeeper scheme continue to apply. Similar to the existing requirements to give notice to employees, the amendments require employers that have already elected to participate in the JobKeeper scheme to give notice to all employees other than:

  • Employees that the entity has previously given a notice in writing advising that the entity has elected to participate in the JobKeeper scheme;
  • Employees that had previously provided the employer with a nomination form in relation to the JobKeeper scheme;
  • Individuals who the entity reasonably believes does not satisfy the 1 July 2020 requirements; and
  • For employers that are ACNC-registered charities that have elected to disregard certain government and related supplies and the individual’s wages and benefits are funded from such government and related sources.
  • All other requirements under the JobKeeper 1.0 rules remain unchanged. For instance, although the eligible employee test has moved to 1 July 2020, the carrying on a business in Australia test, to determine an eligible employer, has not. Consideration must still be given to all the former requirements when determining employer eligibility.

The ‘one in all in’ principle

Under the amendments, for JobKeeper fortnights beginning on or after 3 August 2020, an individual can be an eligible employee if:

  • They meet the eligibility requirements with reference to the new 1 July 2020 date; or
  • Their eligibility from 1 March 2020 was preserved as a 1 March 2020 employee under the amendments.

Accordingly, a qualifying entity that has some eligible employees that were in an employment relationship with the entity on 1 March 2020 and other employees that are newly eligible by applying the 1 July 2020 requirements cannot choose to exclude any eligible employees if the entity participates in the JobKeeper scheme.

Entitlement based on business participation

The eligible business participant rules remain largely unchanged. There was a minor amendment to the rules around eligible business participants, clarifying that the same individual could not be the eligible business participant of two entities in the same fortnight. Previously there was no timeframe on this condition.

However, the rules still require that the nomination notice provided by an eligible business participant stipulates that, at the time the individual gives the entity the nomination notice:

  • The individual has not given any other entity, or the Commissioner, a nomination notice; and
  • No other individual has already given a nomination notice to the entity.


WHAT EMPLOYERS SHOULD DO NOW

When considering which employees may now be eligible for JobKeeper assistance, bear in mind that the “one in all in” principle applies to the newly eligible 1 July 2020 employees, just as it did to the 1 March 2020 employees;

Consider which employees are now eligible to bring into the JobKeeper scheme, not forgetting:

  • Employees who may have joined the business after 1 March 2020 but are currently stood down;
  • Casuals who may qualify as long-term casuals as at 1 July 2020;
  • Employees who may not have met the age condition as at 1 March 2020, but do as at 1 July 2020;
  • Employees who may not have met the residency condition as at 1 March 2020, but do as at 1 July 2020;

Immediately obtain Nomination Notices from the newly eligible employees (including former employees now re-engaged, as discussed above);

By Friday, 21 August 2020, notify those newly eligible employees in writing of the business’s intention to apply for JobKeeper on their behalf;

By Monday, 31 August 2020, ensure that the newly eligible employees are paid $1,500 per fortnight for JobKeeper fortnight 10 (3-16 August) and JobKeeper fortnight 11 (17-30 August);

Add the new employees into the JobKeeper monthly reporting for August 2020 (due 14 September).

The article is authored by Neville Birthisel, Tax & Super Australia. Retrieved on 18 August 2020. URL

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End of Financial Year Tax Tips For Individuals 2019-2020

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The following tax planning measures should be considered in respect to your own individual circumstances. For specific guidance please refer to the ATO website or consult your Tailored Accounts accountants.

End-Of-Financial-Year Tax preparation often seems a bit daunting for many people. The COVID-19 outbreak this year has generated a range of impacts on the community and individual well-being. Tailored Accounts will help you overcome the burden of individual tax return complexities. The following tips provide a comprehensive list of important items for your coming tax return.

  • Salary Sacrifice Arrangements

If employed, you may wish to review your remuneration arrangements with your employer and forego future gross salary in return for receiving exempt or concessionally taxed fringe benefits and/or making additional superannuation contributions under a valid salary sacrifice arrangement.

Please review your contributions including Superannuation Guarantee (SG) and Salary Sacrifice to assess whether you have over/under contributed. It is now a good time to adjust your contributions.

  • Additional Superannuation Contributions

Voluntary superannuation contributions would help grow your super balance quicker and reduce your personal tax liabilities.

  • Work-Related Deductions

For employees who are working from home during the period 1 March to 30 June 2020, the ATO is allowing a temporary simplified method of calculating deductions for additional running expenses. There are 3 alternatives including:

  1. 80 cents per hour for all additional running expenses incurred after 1 March 2020 until 30 June 2020; or
  2. 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus the work-related portion of phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device; or
  3. The actual work-related portion of all running expenses, which will need to be calculated on a reasonable basis.
  • First Home Super Saver (FHSS) Scheme

The FHSS scheme essentially allows an individual to make additional voluntary salary sacrificed superannuation contributions or after-tax contributions to a complying superannuation fund from 1 July 2017 up to a maximum amount of up to $15,000 per year (and $30,000 in total) which can be withdrawn to help finance a first home deposit from 1 July 2018. In addition, where the buyer’s partner also has never owned real property, the couple can effectively withdraw an amount of up to $60,000 to jointly fund a home deposit.

  • Early Access To Your Superannuation

You may be able to withdraw up to $10,000 from your superannuation balance in Financial Year 2019/20 and a further $10,000 in 2020/21. You do not need to declare those amounts in your tax return, in other words, they are tax-free. In order to be eligible, you must pass one of the following tests:

  1. You are unemployed; or
  2. You are eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  3. On or after 1 January 2020:
  • You were made redundant; or
  • Your working hours were reduced by 20 per cent or more; or
  • If you are a sole trader and your business you suspended or there was a reduction in your turnover of 20 per cent or more. 

If you are unsure of your current tax status or need assistance and advice for your EOFY preparation, please contact Tailored Accounts for a 20-minute of free consultation. Alternatively, you can access the Tailored Accounts - Sharing Is Caring Page for a free download of an individual cashflow assessment plan. 

Tailored Accounts - Sharing Is Caring Page

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End of Financial Year Tax Tips For Business Owners 2019-2020

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This information is intended as general guidance only.  For specific guidance please refer to the ATO website or consult your Tailored Accounts accountants.

Uncertainty about the continuing spread of the noble coronavirus makes people fear for their health and their lives. If you are doing business in one of the industries, which are most susceptible to health and economic problems, such as tourism, food services, retail, or healthcare, the pandemic has struck your disproportionately hard. Under high uncertainty, funding and immediate government grants have been made available for eligible businesses to navigate the road to recovery. This End-Of-Financial Year Tax Tips will help you reach out and effectively leverage a range of existing support measures for business survival and growth.

Covid-19 Stimulus Measures

The government released a number of economic measures in response to COVID-19. Some of them may impact your FY 2020 tax return. 

  • Enhancing the instant asset write-off

The cost threshold for which entities can access an immediate deduction for depreciating assets and certain related expenditure has been increased from $30,000 to $150,000 for the period 12 March 2020 to 31 December 2020. The turnover threshold of businesses eligible for the instant asset write-off during this period has also been increased to include businesses with an annual turnover of less than $500 million (up from the existing cap of $50 million).

  • Backing business investment

Entities with an aggregated turnover of less than $500 million in an income year who do not use the simplified depreciation rules for small business may be eligible for accelerated depreciation if the entity starts to hold the asset and the asset was first used or installed ready for use for taxable purposes between 12 March 2020 and 30 June 2021.

The tax implication on received stimulus payments:

  • The Cashflow boost you have received will be treated as non-assessable, non-exempt income and is therefore not taxable to the entity. However, JobKeeper payments received are assessable income of the entity. Deductions for payments to employees are available provided the general requirements for deductibility are satisfied.

Other tax-saving tips

  • Super Contribution

All contributions which are required to be received by the superfunds by 30 June 2020 need to be scheduled for payment within ClickSuper by 4 PM AEST on Monday, 24 June 2020.  Superannuation contributions paid after this date may or may not be received by the superannuation fund by 30 June 2020. 

  • Review your Debtors

Review your aged receivables and write off any recoverable debts before 30 June 2020. The bad debt written off can be claimed as a tax deduction for the 2020 financial year. 

  • Pre-pay your expenses

Small business entities may be able to prepay expenses and claim an immediate deduction in the financial year in which they are paid. 

  • Trust resolution

Document and sign the trust distribution resolutions before 30 June 2020.

JobKeeper tips

If your business was not eligible for the JobKeeper grant during the March-May period, it is recommended to re-assess your JobKeeper eligibility for the period of June-August. 

Tailored Accounts is committed to supporting businesses during this critical time. Please contact us for JobKeeper, EOFY, Tax and Advice supports. Our expertise and experience will put your business in the best possible position for sustainable success. 

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