We take insight here of the mainly tax changes in the Federal Budget 2022-23 2.0 announced in October 2022, in relates to the topics of Individual & Families, Superannuation & Investors, Business & Employers, and Government & Regulators.

Individual & Families

Child Care Subsidy lifted

From

2022-23

For families earning less than $80,000, the maximum Child Care Subsidy (CCS) rate increases from 85% to 90%, but the rates will reduce by 1% for each additional $5,000 in income and reaches 0% CCS when families earning up to $530,000.

The current higher CCS rates will be maintained for families who have more than one child in childcare who is 5 years old or younger, but the higher CCS rate will cease after the older child’s last session of care, or when the child reaches age of 6.

From 2022-23, families with First Nations children will receive a base entitlement of 36 hours per fortnight of subsidized early childhood education and care, independent of income level or activity hour.

The change in CCS comes with a renewed emphasis on industry compliance, requiring providers to report CCS related revenue and profits publicly. On top of that, managing CCS from 2022-23 onwards will require electronic payment of early childhood education and care gap fees, to prevent from fraudulent claims for cares not received.

Paid parental leave changes

From	1 July 2023 1 July 2024

From 1 July 2023, the Paid Parental Leave Scheme will be reformed to provide higher flexibility for families. Either parent is able to claim the payment and both birth and non-birth parents can receive the payment when they are eligible. Parents are also able to claim payment simultaneously so both of them can take leave at the same time

A new family income test of $350,000 is introduced to the eligibility criteria. The family income test is applicable when parents do not meet the individual income test.

From 1 July 2024, two additional weeks a year will be added under the new parental leave scheme until it reaches 26 weeks from 1 July 2026.

Both parents can share the leave entitlement under the ‘use it or lose it’ basis, emphasizing on sharing equal responsibilities for caring. Sole parent will access the full 26 weeks of the paid parental leave. 

Encourage pensioners back to work

From

2022-23

The government is encouraging age and veteran pensioners to work and earn more before their pension is reduced by providing a one-time credit of $4,000 to their Work Bonus income bank.

This change will increase the amount pensioners can earn before their pension is reduced, from $7,800 to $11,800.

The Work Bonus allows eligible pensioners to earn more before it affects their pension rate, the current rule of which first $300 income per fortnight is not assessed and not applicable to pension income test. In addition to the pension income test free area, the Work Bonus will operate. the Work Bonus is not used in a fortnight, it accumulates in an income bank with standard maximum of $7,800. It allows pensioners to work on casual basis to not be disadvantaged compared to those who receive regular fortnight income.

Reform to aged care

The government is providing $2.5bn over 4 years to improve the quality of aged care in residential aged care facilities. from 1 July 2023, all residential aged care facilities will require a registered nurse onsite 24 hour per day, 7 days a week. From 1 October 2024, all residents in residential aged care facilities will have their care minutes increased to 215 minutes per resident per day.

The aged care form will set a cap limit on the charges the approved home care providers may charge on care recipients, and the removal of exit fees.    

Extra support for floods and natural disasters

The government is providing $51.5m to support communities impacted by natural disasters through the Australian Government Disaster Recovery Payments (AGDRP), Disaster Recovery Allowance (DRA) and other payments made under the Disaster Recovery Funding Arrangements.

Increase the income limit on Seniors Health Card

A highly income test limits will be applied for the access of the Commonwealth Senior Health Card (CSHC), CSHC provides benefits in subsidised pharmaceuticals and other medical benefits to self-funded retiree who have reached aged pension age.

The income test incorporates adjusted taxable income and deeming on account-based pensions unless grandfathered under the pre-1 July 2015 rules. Note that CSHC is not asset tested.

	Current ($ per annum)	New ($ per annum)
Single	$61,284	$90,000
Couples combined	$98,054	$144,000

Legislation enabling the increase is before Parliament.

Social security deeming rates will be freeze at their current level for further two years until 30 June 2024.

Disposal of sale of main residence extended with income support asset test

The government will:

• Assets test exemption for principal home sale proceeds will be extended from 12 month to 24 months for income support recipients.
• The income test will apply the lower deeming rate (0.25%) to principal home sale proceeds when calculating deemed income for 24 months after sale of the principal home.

Until the income support recipient gets another main residence or the 24-month period is expired, the exemptions can apply. The extension Bill is now in front of Parliament.

Raise to veterans total and permanent incapacity payments

From

2022-23

The Special Rate of Disability Compensation Payment, Temporary Special Rate Payment, and the Special Rate Disability Pension for veterans will be raised by $1,000 every year.

Household solar community batteries

From

2022-23

Across the country, the Australian Government will support $224.3m fund over 4 years (from 2022-2023) to deploy 400 batteries in community.

A related solar initiative will also receive an additional $102m, in commitment to establish a Community Solar Banks program for deployment of community-scale solar and clean energy technologies. It is aimed to target regional communities, social housing, apartments, rental accommodation, and households that are usually unable to use rooftop solar.

Superannuation & Investors

Change to taxation of listed companies buy-backs off-market share

From	7:30pm AEDT, 25 October 2022

From 25 October 2022 7:30pm AEDT, the tax treatment of off-market share buybacks by listed public companies will be aligned with the treatment of on-market buybacks. This change expects to deliver $550m in savings.

An on-market buy-back is like a listed company buys its shares back through the stock exchange platform. All others are treated as off-market buy-backs.

According to current legislation, a company conduct an off-market buy-backs will consider what portion of proceeds are taxed as dividend and what portion of proceeds are taxed under CGT rules. Dividend can potentially include franking credits.

For listed company conducting an on-market buy-back, the full transactions are taxed under CGT regime and therefore franking credits cannot be applied to the shareholders.

It is a potential tax advantage when ff-market buy-backs is offered to low-taxed shareholders eg. superannuation funds. The government is concerned with tax treatment inappropriate exploitations between on and off-market buy-backss.

Only listed public companies are mentioned in this Budget. Therefore, it is presumably interpretated that for private companies and public companies that are not listed, the current tax treatment of off-market buy-backs will be unchanged.

Although this announcement hasn’t been legislated, with the immediate effective time of Budget night, any new off-market share buy-backs will be affected instantly.

Eligibility of ‘Downsizer’ extended to 55

From	First quarter after Royal Assent

The government is now reducing the age requirement for individuals making ‘downsizing contribution’ from 60 to 55 years of age.

Currently, eligible ‘downsizers’ aged 60 or older can make ‘downsizing contribution’ up to $300,000 per person ($600,000 for couple) to their super fund when they dispose their home.

If you have owned your principal residence in Australia for the past ten or more years and now you are selling, you can contribute the downsizer proceeding into your superannuation. The contributions are exempted from the age test, work test, and your total superannuation balance; not exempt from your transfer balance cap though.

The expanding age legislation eligibility for downsizer contributions is now in front of Parliament. 

Postponed relaxation of the requirements of SMSF residency

Earlier this year’s Budget, for Self-Managed Super Fund (SMSF) and small APRA Regulated Funds (ARFs), the residence rules will be relaxed by extending the central control and management test safe harbour from two to five years for SMSFs. The active member test for both fund types are also removed.

This measure was supposed to be started from 1 July 2022. But in this Budget, the Government will not start the measure until the income year commencing on or after the date when Royal Assent enables the legislation.

Removed the requirement of 3-year SMSF audit

The 3-year SMSF audit requirement announced back in 2018-19, applies to SMSFs with history of good record-keeping and compliance, only need to have their fund audited every three years, will be removed.

The measure will not be proceeding announced in this Budget.

Digital currency not a foreign currency

Digital currencies such as Bitcoin will continue to be excluded from the Australian income tax treatment of foreign currency. However, digital currencies issued by, or under authority of a government agency, will be continually taxed under foreign currency.

Business & Employers

Scrapped intangible assets self-assessment

The previously announced measure that due to commence from 1 July 2023, taxpayers will be able to self-assess the effective life of certain intangible assets has been scrapped. So the requirement to use the effective life currently prescribed by statute continues.

The measure was for assets acquired from 1 July 2023 such as patents, registered designs, copyrights and in-house software.

Significant increase in penalties for the breaches of competition and consumer law

From	2022-23 financial year

From 2022-23, corporations breaching competition and consumer laws will be penalized more heavily, fine will jump from a maximum of $10m to $50m per breach or 10% of annual turnover to 30% of turnover (whichever is greater) for the period the breach took place.

Energy efficiency funding for SMEs

From	2022-23 financial year

From 2022-23, the government will provide $62.6m over 3 years to support small and medium enterprises (SMEs) in funding energy efficient equipment upgrades. The funding aims to support studies, planning, equipment and facilities upgrade that leads to better energy efficiency, reduce emissions or improve management of power demand. No further details are currently available.

Deferred requirements for ridesharing reporting

Back to the 2019-20 Mid Year Economic and Fiscal Outlook (MYEFO), for data matching purposes, sharing economy online platforms were required to report participating sellers ‘ identification and income information to the ATO. These measures have now been deferred from:

• 1 July 2022 to 1 July 2023 for transactions in relation to the supply of ride sourcing and short-term accommodation, and
• 1 July 2023 to 1 July 2024 for all other reportable transactions (including but not limited to asset sharing, food delivery and tasking-based services).

Earnings based test introduced to thin capitalisation rules

From	1 July 2023

The government is making amendment to the thin capitalisation rules which affects the amount that can be claimed as debt deduction, such as interests. A new earnings-based tests is introduced to replace the current safe harbour and worldwide gearing tests, that limit debt deductions to more in-line with entity’s profits.

Applying to global entities running in Australia and any inward or outward investor, aligning with the existing regime of thin capitalisation, the measures will:

• Cap a debt-related deductions to 30 per cent of profits of an entity (EBITDA is used as the metrics of profit). The current safe harbour test will be replaced by this new earnings-based test.
• Deductions rejected under the EBITDA test of entity-level is allowed (interest expense amounts over the 3% EBITDA ratio) to be carried forward and claimed in a future income year (up to 15 years).
• An entity in a group is allowed to claim debt-related deductions up to the level of the global group’s net interest expense as a share of earnings (that could be over the 30% EBITDA ratio). The global gearing ratio will be replaced by this new earnings-based group ratio.
• An arm’s length debt test will be kept as a substitute test that will only apply to the external (third party) debt of a entity, which doesn’t allow deductions for related party debt.

Existing thin capitalisation rules still apply to financial entities.

The current thin capitalisation rules limit debt deductions up to the three different tests whichever is bigger:

• A safe harbour (debt to asset ratio) test;
• An arm’s length debt test; and
• A worldwide gearing (debt to equity ratio) test.

Declaration of companies’ subsidiaries

From	1 July 2023

New reporting from 1 July 2023 will request:

• Australian public companies (listed and unlisted) to reveal information about the number of subsidiaries and their tax residency;
• Bidders for contracts for Australian Government valued greater than $200,000 to reveal their country of tax residency (supply their ultimate head entity’s country of tax residence); and
• Significant global entities, to prepare to release publicly for certain tax information on a country by country (CbC) basis and a taxation approach statement.

Global entities disallowed deductions for intangible assets

From	Payment made on or after 1 July 2023

Significant global entities with at least $1bn global revenue will be disallowed to claim a tax deduction on a direct or indirect payments made to related low or no tax jurisdictions parties in regards to the usage of intangible assets, such as royalties paid for the trademarks and other intellectual property items usage.

A low or no tax jurisdiction is one with:

• A tax rate of less than 15%, or
• A tax preferential patent box regime without significant substance.

The measure will be commented on or after 1 July 2023 for such type payment.

This measure could impact on Australian subsidiaries of a foreign head entity whose global revenue of the consolidated group is $1bn or more for accounting purposes.

Government & Regulators

ATO focused area

Individual income tax deductions and false declaring

Additional $80.3m will be handed down to ATO to smash the non-compliance behaviour including:

• False deductions for overclaiming; and
• Short report of income

This measure will be expected to raise tax revenue by $674.4m and direct payment by $80.3m over 4 years preriod.

Shadow economy and tax fraud in business

The ATO’s Shadow Economy Program has been extended for another 3 years from 1 July 2023, which aims to crackdown the ‘shadow economy’, such as underpaid salary, credit card fraud, cash payment, etc. The extended program is estimated to raise tax revenue by $2.1bn and direct payment by $685.2m over the 4 years from 1 July 2022.

The Tax Avoidance Taskforce on multinational business

The ATO’s Tax Avoidance Taskforce will be allocated extra $200m over 4 years from 1 July 2022 focusing on multinational organisations and large public and private entities. This taskforce is expected to raise additional $2.8bn tax revenue and $1.1bn payments for the next 4 year.

$3.6bn external labour, advertising, travel and legal expenses cut

The Government will be committed to save $3.6bn by cutting the expense on external labour, advertising, travel and legal.

Electric vehicle and hydrogen refuelling

Boosting the Nation Fund, the Government will provide:

• $146.1m over 5 years from 2023-24, enabling the Australian Renewable Energy Agency to co-invest in projects for emissions reduction from road transport sector across Australia
• $89.5m over 6 years from 2022-23, enabling the Hydrogen Highways initiative to fund the establishing of hydrogen refuelling stations on Australia’s busiest freight routes, partnering with states and territories, including $5.5m to LINE Hydrogen Pty Ltd for its George Town green hydrogen heavy transport project
• $39.8m over 5 years from 2022-23, enabling a National Electric Vehicle Charging Network to deliver 117 fast charging stations on Australia’s highways, partnering with the NRMA.

Increase foreign investment review board fees

The Government has raised foreign investment fees and along with that, financial penalties will be raised for breaches for those in relates to residential land. All applicants applicable to the foreign investment framework will have their fees doubled from 29 July 2022 and in the meantime, the maximum financial penalties for breaches related to residential land will also double from 1 January 2023.

Should you please have any question in regards to above, please feel free to contact our friendly team in Pitt Martin Tax at 0292213345 our info@pittmartingroup.com.au.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

The NSW Government has announced a $1bn support package for the NSW small businesses affected by the Omicron outbreak.

The NSW Treasurer Matt Kean, acknowledging the difficulties that NSW small business are facing due to the recent Omicron outbreak, has announced a small businesses support package over January and February 2022.

The NSW Treasurer said about the support package,

“household balance sheets are strong at the moment, when we get out of this wave, we expect a snap back and the economy will bounce back better on the other side of this.”

Small Business Support Package

Eligible businesses and not-for-profit organisations will receive 20% of weekly payroll as a lump sum for the month of February, with a minimum payment of $750 per week up to a maximum payment of $5,000 per week.

Eligible non-employing businesses will receive $500 per week (paid as a lump sum of $2,000).

Eligibility

To access the package, businesses or not-for-profit organisation must:

• Have an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2021 or the year ended 30 June 2020; and
• Experienced a decline in turnover of 40% or more due to Public Health Orders or the impact of COVID-19 during the month of January 2022 compared to January 2021 or January 2020; and
• Experienced a decline in turnover of 40% or more from 1 to 14 February 2022 compared to the same fortnight in either 2021 or 2020 (you must use the same comparison year utilised in the decline in turnover test for January); and
• Maintain their employee headcount as of 30 January 2022.

The support package is for the month of February 2022 only. Applications for support are expected to be opened mid-February.

Fees and charges rebate increased and expanded to RAT tests

The NSW government has increased small business fees and charges rebate from $2,000 to $3,000. In the meantime, eligible employing small businesses will be able to use the rebate against the cost of rapid antigen tests (RATs) (up to 50%) which is purchased by the business to protect staff and clients. The rebate for RAT tests won’t be available until “March” and is unlikely to cover RAT tests purchased prior to the funding coming online to prevent additional pressures on the RAT test supply chain.

The rebate is not a cash payment; rather it will be a digital credit that businesses can draw down on to offset the cost of eligible NSW and local government fees and charges.

The small business fees and charges rebates can also be used to pay other fees and charges like:

• food authority licences
• liquor licences
• tradesperson licences
• event fees
• outdoor seating fees
• council rates
• road user tolls for business use.

View a complete list of all eligible fees and charges.

For small and medium food and beverage businesses wanting to create or expand their outdoor dining area, there is an existing $5,000 small business Alfresco Restart rebate available there. Applications for this rebate are open until the end of April 2022 or when the allocation is finished.

Eligibility

The fees and charges rebate is available to sole traders, small business, and not-for profits that have:

• Total Australian wages below the NSW Government 2020-21 payroll tax threshold ($1.2 million)
• An Australian Business Number (ABN) registered in NSW and/or have business premises physically located and operating in NSW.

Businesses already registered will receive an automatic top up of $1,000 and newly registering businesses will receive a rebate of $3,000. Each ABN can only has one rebate.

Commercial landlord relief extended

The protections under the Retail and Other Commercial Leases (COVID-19) Regulation 2021 for eligible and affected tenants will be extended for another two months, until 13 March 2022. This regulation protects the tenant from certain actions by landlords (such as lock out or eviction) unless the landlord has first renegotiated rent with eligible tenants and attempted mediation.  

Grants of up to $3000 per month (GST inclusive) are available for eligible landlords who have provided rental waivers to affected tenants.

Rent waived must comprise at least half of any rental reduction provided. The remaining portion may be a rental deferral. The grant does not apply to rent deferrals.

Grants will be paid as a lump sum amount for the rent waived.

NSW Performing Arts Package extended

The existing NSW Performing Arts COVID Support Package has been extended from 14 February 2022 to 30 April 2022.

Eligibility

To be eligible for funding, you must be one of the following:

• An eligible venue (list published by Create NSW)
• A producer of an eligible performance scheduled to perform at one of the eligible venues
• A promoter of an eligible performance scheduled to perform at one of the eligible venues.

See CreateNSW for more details.

Should you please have any question in regards to above, please feel free to contact our friendly team in Pitt Martin Tax at 0292213345 our info@pittmartingroup.com.au.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

Updated 31 January 2022

Support Type	Support Content	For Period	Eligibility	Evidence	Application
2021 COVID-19 business grant	* $7,500 for a decline of 30% or more * $10,500 for a decline of 50% or more * $15,000 for a decline of 70% or more.	26 Jun 2021 – 17 Jul 2021	* have an active Australian Business Number (ABN) * demonstrate your business was operating in NSW as at 1 June 2021 * have had total annual Australian wages of $10 million or less as at 1 July 2020 * have had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020 * demonstrate your business has experienced a decline in turnover of 30% or more due to Public Health Order over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to the same period in 2019 or the same period in 2020 or the 2 weeks immediately prior to any restrictions, 12 June to 25 June 2021; * have business costs for which there is no other government support available * maintain your employee headcount as at 13 July 2021. See the guidelines for definitions.	If your business is on the highly impacted industries list, you’ll be required to: * declare that you meet the eligibility criteria * have business costs for which there is no other government support available * provide details of your qualified accountant, registered tax agent or registered BAS agent * submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020 * lodge other supporting documents as required to demonstrate you meet the eligibility criteria. If you’re eligible for the $15,000 grant, to receive the full amount, you must submit evidence that you experienced the relevant decline in turnover in the specified period. See the guidelines for more information. If your business is not on the highly impacted industries list, you must: * declare that you meet the eligibility criteria * have business costs for which there is no other government support available * submit evidence that you experienced the relevant decline in turnover in the specified period * submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020 * lodge other supporting documents as required to demonstrate you meet the eligibility criteria. To show evidence of this decline in turnover, you’ll need to submit a letter from a qualified accountant, registered tax agent or registered BAS agent, using the template provided.	Open: 19 Jul 2021   Close:13 Sep 2021 Click to Apply
JobSaver payment	The payment will be equivalent to 40% of the weekly payroll for work performed in NSW: * minimum payment will be $1,500 per week * maximum payment will be $100,000 per week. Weekly payroll should generally be determined by referring to the most recent Business Activity Statement (BAS) provided to the Australian Taxation Office (ATO) before 26 June 2021 for the 2020-21 financial year. If you’re a non-employing business, such as a sole trader, you may be eligible to receive a payment of $1,000 per week.	18 Jul 2021 onwards	* they have an Australian Business Number (ABN) and were operating in New South Wales on 1 June 2021; * they had a national aggregated annual turnover of between $75,000 and $250 million (inclusive) for the year ended 30 June 2020; * they experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June), compared to the same period in 2019 or the same period in 2020 or the 2 weeks immediately prior to any restrictions, 12 June to 25 June 2021; * for employing businesses, they maintain their employee headcount on 13 July 2021 while they continue to receive JobSaver payments (businesses that do not maintain the declared headcount must notify Service NSW); and * for non-employing businesses, the business receiving payments must be the primary income source for the associated person. Individuals with more than one non-employing business may only claim payments for one business. Certain entities, such as those earning passive income (rents, interest, or dividends), government agencies, local governments, banks, and universities are not eligible for JobSaver. See the full list of ineligible businesses in the guidelines. Non-employing businesses are not eligible for the JobSaver payment if anyone associated with the business or who derives income from it, has received a Commonwealth COVID-19 Disaster Payment since 18 July 2021.	If your business is on the highly impacted industries list, you’ll be required to: * declare that you meet the eligibility criteria * declare your employee headcount at 13 July 2021 * if you have employees, declare that you will maintain your employee headcount on 13 July 2021 for the period for which you will receive JobSaver payments. Service NSW must be notified if the headcount declines over the payment period * if you do not have employees, declare that the business is the primary income source for the owner of the business * submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover between $75,000 and $250 million (inclusive) for the year ended 30 June 2020 * provide details of your qualified accountant, registered tax agent or registered BAS agent * provide evidence of weekly payroll * lodge other supporting documents as required to demonstrate you meet the eligibility criteria. If your business is not on the highly impacted industries list, in addition to the evidence requirements outlined above, you’ll need to: * submit a letter from a qualified accountant, registered tax agent or registered BAS agent, using the template provided, to demonstrate that you experienced a decline in turnover over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June) compared to the same period in 2019.	Open: 26 Jul 2021   Close:18 Oct 2021   Click to Apply Once deemed eligible, businesses will receive automatic fortnightly payments. Businesses will not need to re-apply but must notify Service NSW if they are not maintaining the number of employees they had on 13 July 2021. Reductions in employee headcount resulting from circumstances outside the control of the employer (such as voluntary resignations, death of an employee) will not be taken as a reduction in employee headcount on 13 July.   Payments will be made in arrears with the first payment backdated to 18 July.
2021 COVID-19 micro-business grant	Fortnightly payment of $1,500	26 Jun 2021 onwards	* have an active Australian Business Number (ABN) registered in, or demonstrate your business was primarily operating in, NSW as at 1 June 2021 * have had aggregated annual turnover between $30,000 and $75,000 for the year ended 30 June 2020 * have experienced a decline in turnover of 30% or more due to the public health orders over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June 2021  and due to end 30 July 2021), compared to the same period in 2019 * have business costs for which no other government support is available * have not applied for either the 2021 COVID-19 business grant or the JobSaver payment * maintain your employee headcount as at 13 July 2021 while receiving payments from this grant, if you’re an employing business * have this business as your primary income source, if you’re a non-employing business such as a sole trader. Certain entities, including those primarily earning passive income (such as rents, interest or dividends) or those with an ABN registered after 1 June 2021, are not eligible for this grant. See the full list of ineligible businesses in Attachment A of the guidelines. Non-employing businesses are not eligible to apply for this grant if anyone associated with the business or who derives income from it has received the Commonwealth COVID-19 disaster payment. For employing businesses, your employees can receive Commonwealth COVID-19 disaster payments if you receive this grant.  Businesses that received the $1,500 small business fees and charges rebate can apply for this grant.	* declare that you meet the eligibility criteria * submit evidence of: your business’ decline in turnover of 30% or more over a minimum 2-week period within the Greater Sydney lockdown； an aggregated annual turnover between $30,000 and $75,000 for the year ended 30 June 2020.  * lodge other supporting documents, as required, to demonstrate you meet the eligibility criteria. Where required, evidence must be in the form of a: * letter from a qualified accountant, registered tax agent or registered BAS agent using the template provided, or * business bank account statement, or * business activity statement (BAS), or * Australian income tax return or Notice of Assessment.	Open: 26 Jul 2021   Close:18 Oct 2021   Click to Apply When you submit your application, you’ll receive a confirmation email with your application reference number. If you do not receive this email within 5 minutes after completing your application, please check your junk mail folder, and then call 13 77 88  if you’re still unable to locate the email. After your application is received, it will be reviewed by Service NSW. They’ll contact you if they need additional information to support your application. If your application is approved, they’ll transfer funds to your specified bank account within 5 business days from the approval date.
Payroll tax concessions	* 25% reduction in 2021-22 payroll tax where there is a 30% decline in turnover. * The due date for lodgement and payment of the 2021 annual reconciliation has been extended to 7 October 2021  * customers have the option of deferring their payments for the July and August 2021 return periods until 7 October 2021. * deferred payments will also be eligible for an interest-free payment plan of up to 12 months.	2021-2022	For 25% reduction in 2021-22 payroll tax * A revenue decline of 30%. * For businesses with Australian wages up to $10 million. Other concessions apply to all business with payroll tax roll.	The 25% reduction policy will be available when it comes to the in 2021-22 payroll tax reconciliation. Other policies will be advised by the end of September 2021	Revenue NSW
Land tax relief	The land tax reduction will be the lesser of: * the amount of rent reduction you provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or * 100 per cent of the land tax attributable to the parcel of land leased to that tenant.	1 Jul 2021 – 31 Dec 2021	To be eligible for relief on your 2021 land tax, you’ll need to:  * be leasing property on your parcel of land to:  1, a commercial tenant who has:  an annual turnover of up to $50 million, and is eligible for the: Micro-business COVID-19 Support Grant or 2021 COVID-19 NSW Business Grant and/or JobSaver scheme, or 2, a residential tenant who has lost 25% or more of household income due to COVID-19.   * have reduced the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021 * have provided the rent reduction without any requirement for it to be paid back at a later date * have a 2021 land tax liability attributable to the parcel of land where the rent reduction has been given. If you’re not eligible for land tax relief you can request an extended payment arrangement for your land tax if necessary.  Note: You can still apply for this period of land tax relief, even if you applied for any of the previous relief periods, provided you meet all the eligibility requirements.	* details of all eligible tenants, including ABN/ACN for commercial tenants  * evidence of: 1, your rental reduction for the 1 July to 31 December 2021 period. This can include:   copies of tenancy agreements proving rental reduction; rental ledgers; a letter from your property manager. 2, your commercial (if applicable) tenants’ eligibility to be approved for the: Micro-business COVID-19 Support Grant or 2021 COVID-19 NSW Business Grant and/or JobSaver scheme. 3, your residential tenants’ financial distress due to COVID-19 (if applicable). This can include one of the following: a statement from your tenant(s) explaining how they have been impacted by COVID-19; copies of written communication between you and the tenant(s); a letter from the property manager. Note: You must have your tenants’ permission to share their information with Revenue NSW.	Service NSW Click to Apply

On 7 August, the Government modified the eligibility of JobKeeper Payment 2.0 (extended JobKeeper 1.0 to 28 March 2021), aiming to embrace more people and businesses who have been affected by the ongoing crisis. The change is in response to the undeniable second COVID-19 wave in Victoria, and the Government concerns the stricter requirement will shut out many people and business particularly based in Victoria.

So we will compare the modified version with the version issued on 21 July. For more information about the 21 July announced JobKeeper 2.0, please refer to our article JobKeeper and JobSeeker Have Been Extended.

Turnover Test

The same to the 21 July JobKeeper 2.0 announcement, businesses and Not-For-Profits are required to pass the turnover test in October 2020 and again in January 2021 to continue qualifying the JobKeeper Payment.

Contrary to the 21 July announcement – employers are required to demonstrate the decline in GST turnover for both their June and September quarter compared to the corresponding period in 2019, the 7 August relaxed announcement requested September quarter GST turnover decline only to be eligible for the upcoming JobKeeper 2.0 (28 September 2020 to 3 January 2021).

The same requirement will be applied to the second period of extended JobKeeper 2.0 (from 4 January 2021 to 28 March 2021). Now employers only need to reassess themselves based on the decline in the actual GST turnover of December quarter, compared to the corresponding period in 2019. Under the previously announced turnover test, employers would have to show a decline in GST turnover for June, September and December quarters of this year.

Eligibility relating to turnover test will remain the same as JobKeeper 1.0, businesses and Not-For-Profits have suffered either:

• 50% drop or more (for aggregated turnover of $ 1 Billion or more)

• 30% drop or more (for aggregated turnover less than $ 1 Billion)

• 15% drop or more (for ACNC-registered charities excluding universities and schools)

Employee Eligibility

The 21 July announcement said Employee Eligibility test date is 01/03/2020, while the 7 August relaxed announcement makes Employee Eligibility test date either 01/03/2020 or 01/07/2020 to get more employees be qualified for JobKeeper 2.0. We believe the businesses have been suffering a lot from the pandemic and leading to their employees’ redundancy. The test date 01/07/2020 will make more new employees become eligible who got the job between March and July, which is quite necessary in the current situation.

Eligibility for JobKeeper 2.0:

• Currently employed by the eligible employers (including stood-down or re-hired)

• Employed by eligible employers (or one of the wholly owned entity)
  • The individual was either a full-time, part-time of fixed-term employee or
  • The individual was a long-term casual employee with at least 12 months service with the business as at 1 July 2020 and not a permanent employee of any other employer

• On 1 July 2020, the individual was aged 18 or over (or if they were 16 or 17 years old and they were independent and not undertaking full-time study)

• Were either:
  • an Australian Resident (under the meaning of Social Security Act 1991)
  • was an Australian Resident (as per Income Tax Assessment Act 1936) and held a Subclass 444 (special category) Visa as at 1 July 2020.

• Did not receive any of the following government subsidies at any time during the JobKeeper fortnight:
  • government Parental Leave or Dad and Partner Pay under the Paid Parental Leave Act 2010 or
  • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

Please bear in mind, most of the business will assess their eligibility against the turnover and submit their application based on their quarterly BAS lodgement. However, normally the due date of quarterly BAS lodgement will be the end of the following month of each quarter. Therefore, employers should reassess their JobKeeper Eligibility in advance of the BAS deadline in order to meet the wage condition. The Commissioner may extend the time for meeting the wage requirement so that businesses have time to first confirm their JobKeeper eligibility, eg. ATO has notified the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 is allowed until 31 October 2020 for employers to meet the wage condition.

Later last month, the government announced to extend JobKeeper Payment by six months to 28 March 2021 and the JobSeeker Payment to 31 December 2020. The extension is aiming to build up the confidence for economy recovery and continue to support the business and community. However, the government also make eligibility stricter for the sake to only provide assistance to individuals and businesses who are indeed highly impacted.

Changes of the extended JobKeeper

Two phases payment

From 28 September 2020 to 3 January 2021, Jobkeeper Payment will be:

• $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and

• $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, JobKeeper Payment will be:

• $1000 per fortnight for all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or Not-For-Profit for 20 hours or more a week on average, and for eligible business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020; and

• $650 per fortnight for other eligible employees and business participants.

Eligibility of employees stays the same as before, for more information please refer to our article The Second and Third Stimulus Package Plan – Which One Suits You.

Turnover Test for Extended JobKeeper

To be eligible for the extended JobKeeper Payment, business and Not-For-Profit are required to meet the current turnover test and in addition, they need to prove their actual turnover has been continuously significantly dropped down in the testing period. They have to apply and satisfy the requirements again in October 2020 and January 2021.

Business and Not-For-Profit need to demonstrate they have experienced a decline in turnover for June 2020 quarter (April, May, June) and September 2020 quarter (July, August, September) compared to the relevant quarters (usually the same quarter of last year) for the period 28 Sep 2020 to 3 Jan 2021 JobKeeper payment.

Similarly, to be eligible for the JobKeeper under the extension period 4 Jan 2021 to 28 Mar 2021, businesses and Not-For Profit should prove their actual turnover for June, September and December quarters 2020 are dramatically reduced compared to the relevant quarters (usually the same quarter of last year).

Test for decline in turnover remains the same, for more information please refer to article The Second and Third Stimulus Package Plan – Which One Suits You.

Changes of the extended JobSeeker

The temporary Coronavirus Supplement has also been extended from 25 September 2020 to 31 December 2020. However, the payment has been adjusted aligning with the gradually improved economy. The government will simultaneously update the associated policy to guide those people become more active in job seeking. 

Changes to the payment

From 25 September 2020 to 31 December 2020, the Coronavirus Supplement per fortnight will be reduced from $550 to $250. Effectively the JobSeeker payment rate will now be reduced from $1100 to $800 per fortnight.

The income free threshold to people on JobSeeker and Youth Allowance (other) will be increased from $106 for JobSeeker Payment and $143 for Youth Allowance (other) to $300 per fortnight for both and a phase out rate of $0.6 in every dollar of income over $300.

Eligibility

Eligibility for the payment will be changed too from 25 September 2020 to ensure the assistance has been delivered to people who need most as the economy recovers.

• Means Testing – from 25 September 2020, means testing will be put in place in the following ways:
  • Asset testing for all payment for both existing and new recipients
  • the Liquid Assets Waiting Period (LAWP) for all payments will be reinstated

• Partner income testing – from 25 September 2020, the partner income testing cap will be increased to $3086.11 per fortnight or $80238.89 per annum for individuals with no personal income. The taper rate will jump to $0.27 from $0.25, with the higher income cut-out a result of changes to income testing for JobSeeker Payment.

• Expanded Criteria – JobSeeker Payment and Youth Allowance (other) criteria will continuously assist permanent employees who are stood down or lose their employment and sole traders, self-employed, casual workers and contractors who meet other tests until 31 December 2020.

From 4 August 2020, a mutual obligation requirement (temporarily suspend from 24 March 2020 to 8 June 2020) will be reintroduced, whereby jobseekers are required to undertake FOUR job searches a month. The penalty will apply to those who reject a job without a legitimated reason that has been provided through the program.

The reduced JobKeeper Payment may make some JobKeeper recipients entitled to JobSeeker Payment too. Therefore, the total benefits of extended JobKeeper recipients received may not necessarily reduce much. People who are affected may need to pay attention to the government on any further changes to JobKeeper and JobSeeker.

At Pitt Martin, we are here to be with you through this pandemic. Since the JobKeeper Scheme is released, we have announced to provide FREE assessment on the eligibility for the businesses. Please feel free to click the social media button on top to share this article with your friends and the ones around you to help more people in need.

2020 is already halfway and we are all heading into the new financial year. Despite there are quite many changes from the government stimulus package, there are still some key changes that we can take a look at for Financial Year 2021.

Reduced company tax rate from 1 July 2020

Firstly, from 1 July 2020, tax rate for small business under certain structure has been reduced to 26%.

Businesses such as companies, corporate unit trusts and publicly trading trusts with a turnover less than $50 million will be taxed at a rate of 26% in 2020-21. The tax rate 30% will continuously apply to all companies that are not eligible for lower company tax rate. Generally, the ones with a turnover more than $50m. The lower company tax rate will then reduce to 25% from the 2021-22 income year. Progressive changes to the company tax rate can be found below:

	2018-19 and 2019-20	2020-21	2021-22
* Base Rate Entities	27.5%	26%	25%
Other corporate tax entities	30%	30%	30%

*base rate entity is a company has an aggregated turnover less than $50m and 80% or less of their assessable income is passive income

Increased National Minimum Wage Rates

From 1 July 2020, the minimum wage has been increased by 1.75%

The Fair Work Ombudsman has staggered the increase into three stages:

The first group on 1 July 2020

• Frontline healthcare and social assistance workers
• Teachers and childcare workers
• Other essential services

The second group on 1 November 2020

• Construction
• Manufacturing
• A range of other industries

The third group on 1 February 2021

• Accommodation and food services
• Arts and recreation services
• Aviation
• Retail
• Tourism

Please go to Fair Work Ombudsman Website (https://www.fairwork.gov.au/) for more information in regards to the affected industries.

For all other employees who are not covered by an award or employment agreement, they have to be paid at a minimum hourly rate of $19.84 or $753.8 per week. The changes will become effective from 1 July 2020.

Employers should ensure their employee receive at least the national minimum wage to avoid breaching any industrial and superannuation obligations.

Increase the flexibility of Parental Leave Pay for self-employed

Starting from 1 July 2020, adopting the Parental Leave Pay Planning announced by the government will provide parents more flexibility and choice.

The new measure introduces 30 days of flexible paid parental leave for self-employed and small business owners.

Before, parents are only eligible to claim paid parental leave of 18 weeks in one go. Now, the payment will include both:

• A continuous paid parental leave period of up to 12 weeks and,
• 30 flexible paid parental leave days

Parents can still get parental leave pay in a single continuous 18 weeks block. Alternatively, you can choose a shorter block of 12 weeks. You can then take the remaining flexible paid parental leave when it suits you. However, you must take the flexible paid parental leave days all before your child turns 2. For example, you work 5 days a week previously. Now you have your new born child. You can choose to take a continuous 12 weeks paid parental leave first, and work for three days a week and take a paid parental leave for the remaining 2 days.

If employees want to receive a flexible paid parental leave, they have to negotiate with their employers in regards to their paid leave period or back to work as a part-time. If you cannot make an agreement with your employers regarding your working arrangement, you have to take a continuous block of 18 weeks.

You can changes apply to the babies born on or after 1 July 2020 but the application for the flexible arrangement is opened from 1 April 2020.

Other changes from 1 July 2020

• The instant assets write-off of $150,000 threshold for small business has been expanded to 31 December 2020.
• Cents per kilometre for work purpose deduction has been increased from $0.68 to $0.72.
• Capital gain tax exemption for non-resident for main residence will not be available unless you satisfy the life event test. Please refer to our article “CGT exemption on Main Residence is not any more to Foreign Resident” for more information.
• Small businesses with employee less than 19 are required to finalise the payroll information through STP (Single Touch Payroll) system which was enforced from 1 July 2020. Please refer to “For All Business – Single Touch Payroll” for more information.

 In Pitt Martin, we keep our clients with government tax and policy updates so they won’t be disadvantaged by the obsolete legislation. Call us on 02 92213345 or email connect@pittmartingroup.com.au for this tax season.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

A new financial year is an important time for all kinds of businesses, from sole traders to big corporate. It is not only to meet your tax obligations with the Australian Taxation Office, but also the perfect time to plan for the next 12 months of your business.

There is certainly lots to do as a small business owner as you focus on year-end accounting and bookkeeping tasks besides some planning for the new financial year. To help you organise your financial records, Pitt Martin has put together a handy EOFY checklist for businesses.

• You need to ensure your BAS lodgements are up-to-date and accurate. This is not only making it easier for you to finalise your financial statements but also avoid penalty from the ATO
• You need to ensure your superannuation guarantee (SG) contributions are accurate and up to date. Please note that your March SG is due 28 April 2020 and if you have previous quarters outstanding, you need to act as soon as possible or contact your accountant and bookkeeper for guidance.
• If you are reporting to the ATO via Single Touch Payroll (STP), you are exempt from lodging a PAYG payment summary (Group Certificate) annual report for the amount you’ve reported through STP and from providing payment summaries to your employees so long as you undertake the finalisation declaration by the appropriate date. Please note that you can finalise your employees’ EOFY payroll information through your STP enabled software as soon as you have reconciled the information. Otherwise, you have up until 31 July to do so. Your employees will be able to access their income statements via myGov under the employment tab. If they do not have a myGov account and cannot create one, or do not have a registered agent, you can direct them to contact ATO on 13 28 61.
• You need to ensure that you keep records for at least 5 years, and they are compliant with the ATO requirements
• If you prepared your bookkeeping during the year, please make sure you have your accountant to review the transactions and GST codes assigned to the Profit and Loss and Balance Sheet items to ensure you are lodging a correct BAS.
• The stocktake of your inventory should be done by 30 June 2020, if your business carries stock. Any adjustment on stock quantities and wastage should be reflected in the 2020 accounts.
• If you maintain an asset register for your business, you need to review with your accountant or bookkeeper and remove any assets that had been disposed of or write off. Speak to your accountant about the instant asset write-off that the government introduced as part of the Australian Government’s economic response to coronavirus.
• You need to ensure the following have been completed and reflected in your Profit and Loss and Balance Sheet,
  • Bank accounts, petty cash, prepayments, credit cards, borrowing cost, loans, Chattel Mortgages, and Division 7A Loans are reconciled
  • Depreciation has been properly accounted up to 30 June 2020 in the Profit and Loss and Balance Sheet
  • Review your Debtors and Creditors balance to ensure the accuracy
  • GST and PAYG withholding accounts are reconciled to the June quarter BAS
  • Wages and Superannuation in the Profit and Loss are reconciled to the Payment Summaries.
  • Superannuation Payable in the Balance Sheet is reconciled to the June quarter superannuation guarantee contributions
  • Review the suspense account and ensure all amounts are allocated to the appropriate account
  • Ensure there have been no personal expenses claimed as business expenses

With many businesses facing unprecedented challenges from COVID-19, there is no better time for small business owners to start afresh and thinking about improving their current business performance.

We have included additional checklist which hopefully can help you improve your business performance and financial health going forward,

• You need to revisit your business plan and adjust accordingly to provide a better and clearer direction for your business amid the pandemic. You need to think about what areas of your business do you want to improve? Your accountant can be an important resource to help you put in place a plan to get where you want your business to be.
• You need to update your cash flow budgets for the next 12 months by comparing it to the actual performance. Cash flow is the lifeblood of your small business and needs to be looked at closely for your business to sustain. Review your pricing structure and if you need to raise your price, now is the best time to do. Again, your accountant will be able to assist in the pricing and cash flow budgets.
• You need to review your business insurances or public liability to ensure you have a sufficient level of coverage
• You need to review your financing arrangements to ensure that you have a better deal
• You need to review your own personal insurances including life insurance and income protection insurance to ensure you have adequate coverage should your circumstances have changed
• You need to review your health and safety policies and procedures to ensure your workplace is COVID Safe by following the guidance from the government for the safety plan.
• If you are still using a spreadsheet or other manual accounting system, you might want to consider switching to cloud-based accounting software. Your accountant will be able to assist you with the transition.

In the face of uncertainty caused by the global pandemic, actions taken now can have an immediate impact on how quickly your business rebounds from the global downturn.

Pitt Martin Accountants and Tax Advisers are Xero qualified and Award-winning accountants and bookkeepers who can assist you and your business to improve your business performance and financial health moving forward.

If you know any small business owners who require an assistance in managing their bookkeeping and accounting, please do not hesitate to pass on our details or get in touch with our team on 02 9221 3345 or email connect@pittmartingroup.com.au

Given the impact of Bushfire and COVID-19, Australia has entered into an economic recession first time in the last 30 years. Last a couple of weeks, we have witnessed the Federal Government announced that they have been working with States and Territories to offer a $25,000 HomeBuilder Grant between 4 June 2020 and 31 December 2020 for eligible owner occupiers and buyers including first home buyers.

Eligibility:

• Natural person (not a company and trust)
• Aged 18 years or older
• An Australian Citizen (does not mention PR or New Zealand Citizen)
• Income cap:
  • For Individuals, your earning should be $125,000 or less based on 2018-19 tax return or later
  • For couples, your combined earnings should be $200,000 or less based on 2018-19 tax return or later
• can be either:
  • A new home worth less than $750,000 or
  • An existing home valued up to $1.5m, and the renovation contract should be between $150,000 and $750,000
• The construction and renovation must be executed within three months of the contract date.

Dwelling types:

House, apartments, house and land package, off-the-plan, can be existing property renovation and new property. The scheme will not apply to owner builders or those who are planning to build a new home or renovate an existing home as an investment property.  

Eligibility for Renovation

Renovation fee is between $150,000 and $750,000. The existing property needs worth less than $1.5 million. The construction should be carried out by licensed contractors at arms-length price within three months after signing of the contract. The HomeBuilder Grants must be used for improving your accessibility, liveability, and safety, but not used for add-ons like tennis courts, swimming pool and detached sheds etc. Also, the terms of the contract should be reasonable and in line with the market requirements to prevent any fraud between builders and property owners from swindling grants.

Am I still eligible if I own a land?

• If you own land with an existing dwelling on it and plan to demolish and rebuild your dwelling, this will be considered as substantial renovation as long as the upgraded work’s value is between $150,000 and $750,000, and the value of your existing dwelling (including land value) before the demolish does not exceed $1.5 million.
• If you acquired a vacant land prior to 4 June 2020, you can build a new dwelling on it as long as the total cost of the dwelling plus the land value before construction is less than $750,000.

Can I apply now?

No. It can only apply after your State or Territory enters into a contact with Federal Government and open the channel for application. You will be notified by each State or Territory government in regard to the updates of application. 

Required documents:

Required documents may vary from different State or Territory for your application. However, at least the following documents are required:

• Proof of identification
• Contract with date and signature of you and your licensed builder
• Copy of your builder’s registration or license (depending on your State or Territory)
• Copy of your 2018-19 tax return to demonstrate your income meets income cap
• Other documents including council approvals, building contracts and evidence of land value etc

More detailed documents require further notification from States or Territory government

If I have received First Home Owner Grant, am I still eligible for this HomeBuilder Grant?

Yes, you are. The Homebuilder Grant does not conflict with the First Home Owner Grant, Stamp Duty Concessions as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Do we have to pay tax on that?

No. This is a tax-free payment to you.

Call us on 0292213345 or email on info@pittmartingroup.com.au for further details.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.

The last few months have shown a constant display of obscure challenges related to maintaining business during the COVID-19 pandemic for business owners and leaders everywhere. The latest obscure challenge is possibly the trickiest yet: how to cautiously recommence businesses after the government announced the major easing of coronavirus restrictions.

Businesses will be faced with many logistical details including how to maintain social distance, limit crowd size, and ensure spaces are cleaned thoroughly and regularly. It will take some time to lift the level of confidence in people to start visiting shops, restaurants, and other public venues. In such an uncertain and diverging environment, how can small businesses move forward and back to “business as usual”? There are many opportunities for us as business owners and leaders to unify and build this together amid the uncertainty.

Patience

Patience is not the ability to wait, but the ability to keep a good attitude while waiting. In today’s world, where technology has created the expectation that everything should move more quickly, patience becomes one of the rarest virtues. No one has the patience to wait for anything anymore. However, we need to be careful to not rush everything. We should be careful not to move faster than governments allow.

We should be patient with a timeline that might be slower than we anticipated; patient with a reopening process that might be awkward; patient with the line-up that we have to face when entering the shops; patient with our leaders feeling the pressure of this difficult situation; patient with one another as we are getting used to with the new normal. As hard as it will be to practice patience, we must be determined as it is unquestionable the second wave of Covid-19 cases, or a local outbreak would detrimentally impact businesses.

Humility

Humility is to have a student mindset and always be willing to learn new things. With so many changes in the world amid the pandemic, we need to quick to hear, slow to speak, and slow to anger. When you listen, it may slow down the process of consideration and planning, but it is worth it. We need to be humble to learn to adapt and to accept that things might not be the same as they used to be.

We need humility in how we react to the plans by the government leaders, even if we do not agree with every aspect of it. There is no definitive answer on how to do this well and everyone is just trying to do the best they can to get through this crisis. If we are willing to learn and adapt with all humility, we will be able to survive.

Service

This pandemic is affecting us individually, societally, and organisationally. During this pandemic, we all need to step up and be a leader to do what we can for the greater good. If you are fortunate enough to have cash in your pockets, you can use it to support other businesses. We need to think of ways we can serve our friends, family, neighbours, and community as a whole. We need to encourage “we” before “me” and show gratitude and compassion for others.

If you can make your business about helping others during this crisis, you will always have plenty of work because no one has ever become poor by giving. There is no better time than now to put the needs of others ahead of our own. Remember, success has nothing to do with what you gain in life or accomplish for yourself; it is what you do for others.

There is no need to panic. Tough times never last but tough people do. If we can all continue to show up as servant leaders with patience and humility to serve others, we can get through this uncertainty and crisis stronger than ever.

Don’t let this uncertainty sink your business, reach out for help not because you are weak, but because you want to remain strong.

Pitt Martin Accountants & Tax Advisers are Xero qualified and Award-winning accountants and bookkeepers for small businesses which can be reached on 02 9221 3345 or connect@pittmartingroup.com.au.

It has already been two months since the lockdown was in place. Earlier this month, Prime Minister Scott Morrison finally announced a “Three-Step” procedure to reopen Australia after the COVID-19, which is good news to all of us. Based on the data from Treasurer Josh Frydenberg, Australian has been losing more than $4 billion each week due to the lockdown, of which the largest portion has been attributed to the affected small and medium-sized business (SME). As the lockdown has been gradually lifted, how would SME self-adjust their business and catch up with the changing market in order to bring their business back to normal or even beyond?

1. Get government subsidies and grants

First of all, the biggest issue that SME is facing at the moment is cashflow caused by the declined revenue. As cashflow is considered as the lifeline for any business, the shortage of cashflow may directly lead the business to insolvency. For now, the fastest and most efficient way to deal with the cashflow shortage is to apply for and get the government subsidies and grants. We have mentioned those subsidies and grants in our previous articles The second and third Stimulus Plan – Which one suits you? and How small and medium business benefit from the Stimulus Package? , such as JobKeeper Payment, Cash Flow Boost to employers and Apprentices and Trainees Wage Subsidy etc. These are the most effective approaches you can take currently to maximise your cashflow. For more federal and state stimulus measures, please click on our Internal Manual (https://pittmartin.us7.list-manage.com/track/click?u=7ef7c505bc2b5ac5d9125b1f2&id=8a6e991bbb&e=199892a471)。

Also, the Government Guaranteed Unsecured Finance for up to $250k provided by the bank is another feasible way to supplement the SME’s mid or long term cashflow.

In addition, all the tax liabilities incurred after 12 March, such as income tax, GST, FBT etc, can be deferred to 14 September. Companies that make good use of this relief can help with cashflow shortfalls without violating regulation to delay their tax lodgement.

2. Prepare for return to workplace

If you have already applied for the JobKeeper Payment, you should not worry too much about finding new employees which is the government initiative. Employees can return to work at any time to resume as usual. If you lose your employee for any reason such as you are not eligible for JobKeeper Payment, it is the time for you to consider recruiting or getting in touch with right candidate for the recovery.

After returning to work, business should actively respond to the preventive anti-epidemic measures, such as making employee and customer safety manual or post, keeping 1.5 meters social distance, maintaining 4 square metres of space per person and preparing hand sanitiser etc.

If your business was temporarily closed and you have been working from home since the lockdown, it is the time for you to get in touch with your suppliers and building manager of your workplace to ensure the goods, utilities supplies and office are operating as normal.

3. Have an effective communication with other parties

As a result of market changes caused by the outbreak, the personnel and department in the organisation may also need to be changed. For example, some departments may need more people while others may have to cut. Managers have to have an effective communication with affected employees to make sure personnel change is undertaken in a considerate and proper way.

For most of SME, rent is one of the biggest expenditures in their daily business. The Federal government as well as State government have issued the relevant law and code to ensure landlords to share a portion of the business loss. Therefore, affected business should reach out to their landlord in order to get some rental relief if they have not yet. If you decide to update or enter into a new lease with the landlord, you should take an advantage of the current market to get a better price and terms.

Given everyone is suffering from cashflow shortfall at the moment or in the near future, business should accelerate any necessary debt collection procedures to avoid further capital loss because of the potential future bad debt.

Businesses also have to review the contract with existing suppliers and customers and actively communicate with them to ensure the terms in the contract are updated in a timely manner to reflect the changed market.

4. Change your business plan and look for new opportunities

The current business plan and financial budget may no longer be applicable to the SME. An adjustable and flexible business plan and financial budget are the only guarantee for future recovery and success. Similarly, business who can adjust themselves in the changing market may have more opportunities. For example, lockdown increases the online demand and delivery. In the meantime, online meeting is becoming more acceptable during this period. Therefore, in future, some retail and hospitality business may consider expanding their take-away and IT-related business might intend to engage in online App Development or Video calls.

There is no doubt that there will be a long-term impact brought by this coronavirus pandemic. Business should take their long-term strategies into consideration when they make new business plan to ensure the new plan is more suitable for the changing market and prepare for the worst on the other hand.

Since the outbreak, we can deeply feel that clients, at any other time, never like now need our assistance and advice. At Pitt Martin, we strive to understand your business and put our feet in your shoes so we can be committed to delivering the best service we can to help you out during this tough time. Let us work together and bring your business and life back to normal as soon as possible! Call us on 02 92213345 or email connect@pittmartingroup.com.au.

Disclaimer: This article is not providing a formal advice and may not suit to all scenarios. Please make an appointment with us to discuss.