Welcome back to our Weekly Digest. We hope you and your family are safe and doing well.

Claiming Motor Vehicle Expenses

The ATO allows you to claim motor vehicle expenses that are part of everyday business operations, including travelling between different business premises and visiting clients.

Common expenses include:

• fuel
• repairs
• lease payments
• insurance registration
• depreciation

You may work out your claim using the cents per kilometre method or the logbook method.

For the cents per kilometre method, the rate is 72 cents and applies for a maximum of 5,000 business kilometres per car.

Meanwhile, for the logbook method, you must keep a logbook for at least 12 consecutive weeks and work out the percentage of business use for each car expense.

Remember to claim only the business portion of the expenses and keep records of how you calculated your claim. Alternatively, contact us so we can help you with your claims and ensure your compliance.

Small Business Superannuation Clearing House – Pay Your SG by 23 October

Due to essential ATO system work, the Small Business Superannuation Clearing House will be unavailable between 11.30pm 27 October 2020 and 7.00am 28 October 2020 (AEDT).

The next quarterly due date for SG payments was originally on 28 October 2020, but because of this scheduled outage, the new deadline is on 23 October 2020 (5.30pm) to allow for normal processing.

Need help with the processing of your super guarantee payments? Our registered tax agents can help.

Proposed Superannuation Reform Measures

The Government has announced that it will spend $159.6 million over the next four years to implement a number of reforms to the superannuation system that will save fund members $18 billion in fees and other costs between now and 2030. The key elements of these reforms include:

• From 1 July 2021, when a person changes jobs, their super account will be ‘stapled’ automatically to them. At the time of starting a new job, and unless a member decides otherwise, their employer will pay superannuation contributions into their existing ‘stapled’ fund.
• By 1 July 2021, the Government will develop a new interactive online ‘YourSuper’ comparison tool, which will be administered by the ATO, to allow people to research and select a MySuper fund to manage their super savings.
• MySuper products and other trustee-directed superannuation products will be subject to an annual objective performance test, based on net investment returns. A fund determined to be underperforming will be required to notify its members and provide them with information and tools to switch to a better performing fund

The government has not yet announced any change to the already legislated SG increases from the current 9.5% to 10% from 1 July 2021, with further gradual increases to 12% by 2025.

JobKeeper Key Date: 31 October 2020

For the JobKeeper fortnights starting 28 September and 12 October only, the ATO is allowing employers until 31 October to meet the wage conditions for all employees included in the JobKeeper scheme.

New entities enrolling for the JobKeeper will also need to enroll and submit their ‘Check decline in turnover’ form to the ATO online on 31 October. You can find more details on the actual decline in turnover test here.

Australians to Receive Tax Cuts

The Government approved $17.8 billion in personal tax cuts, quickly pushing through measures announced recently.

More than 11 million Australians and 1 million businesses will begin receiving tax relief within weeks.

Under the new tax package, people earning $48,000 to $90,000 will gain an extra $1,080 in 2020-21 from a one-off extension of the low and middle-income tax offset. Meanwhile, those earning more than $120,000 will have a permanent cut of $2,430 in 2020-21 and beyond.

If you need help with your taxes, get in touch with us as we can provide practical assistance.

Federal Budget 2020 Released

The Federal Budget was released earlier this week. Here is a quick rundown of the key points:

• This budget is based on economic assumptions including that there will be a COVID-19 vaccine rolled out by the end of 2021.
• Asset write off – businesses that make new investments will be able to write off the entire cost in one year, rather than having the asset depreciated over several years. Businesses with a turnover of up to $5 billion will be able to write off the full value of any eligible asset they purchase up to $150,000.
• Cash payments for pensioners. Tax-free payments of $250 will be made to pensioners and others on government support, including those on a Disability Support Pension, Carer Allowance. Find the full list here.
• Mental health support increases – the number of Medicare-funded psychological services doubled from 10 to 20. More announcements are set to come.
• A $240 million Women’s Economic Security Statement was unveiled in the budget.
• Funding for Infrastructure and Construction. $7.5 billion has been announced for national transport infrastructure, aimed at boosting state and territory projects that are currently in the planning phase. Also, the $688 million HomeBuilder scheme gives cash grants for people to renovate or build new homes and builders will benefit from extra support for first home buyers.
• Manufacturing- $1.5 billion has been allocated to boosting Australia’s manufacturing sector and securing supply lines.
• No changes to JobKeeper or JobSeeker.

JobMaker Hiring Credit scheme

While there are no changes to the JobKeeper scheme set to end in March 2021, a fresh wage subsidy program called the JobMaker Hiring Credit has been announced.

The JobMaker Hiring Credit will partially subsidise the wages of young employees who are hired from 7 October 2020. As always, there are some conditions for both employers and employees to meet.

Employers will be able to claim $200 each week for every employee hired after 7 October 2020 aged between 16 and 29, and $100 each week for every employee aged between 30 and 35.

$800m Digital Business Plan to Drive Economic Recovery

The Australian Government has announced a Digital Business plan to enable businesses to take advantage of digital technologies to grow their businesses and create jobs in the wake of COVID-19. PM Scott Morrison and Treasurer Josh Frydenberg announced the almost $800 million scheme on Tuesday that will facilitate doing more business online in a post-pandemic world.

Under the plan, the rollout of Australia’s 5G network will be accelerated, the digital capacity of the agriculture, manufacturing, mining, logistics and financial services will be boosted, and Australians will be able to start a new business in 15 minutes using online government services.

If you need our expert advice on how you can start a business or pivot to adapt to the crisis, contact us.

Australian Business Growth Fund Launches

The government-backed Australian Business Growth Fund has launched to ensure small- and medium-sized businesses have access to equity finance, as the country recovers from the COVID-19 crisis.

Initially, the Australian Business Growth Fund will have an initial investment capacity of $540 million, with a goal to grow the fund to $1 billion.

The government is making a $100-million investment, while major banks including ANZ, Commonwealth Bank, NAB, and Westpac have also committed $100 million each.

The fund will allow Australian businesses to apply for long-term equity capital investments between $5 million and $15 million, where they have generated annual revenue between $2 million and $100 million and can demonstrate three years of revenue growth and profitability.

If you need help in assessing your eligibility or to consider other financing options, please contact us for guidance.

Unemployment Rate Increase to 6.9% in September

Australia’s jobless rate edged up 6.9% in September and employment declined by 29,500, indicating that the economy is still struggling despite the significant fiscal and monetary policy stimulus. In August, employment increased a solid 111,000.

Supporting Apprentices and Trainees Wage Subsidy Extended

The Supporting Apprentices and Trainees wage subsidy has been expanded and extended to include medium-sized businesses who had an eligible apprentice in place from 1 July 2020.

Eligible employers will receive a wage subsidy of up to 50% of the wages paid until 31 March 2021 worth up to $7,000 per quarter, per eligible apprentice or trainee, to manage their cash flow challenges. Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small- or medium-sized business.

This may be of particular interest to employers who are not eligible for the JobKeeper extension. For professional assistance in applying for this wage subsidy or any other funding assistance, feel free to contact us.

Business Resilience Package for Victorian Businesses

The Victorian government is investing $3 billion in cash grants, tax relief, and cashflow support to aid businesses hit by the tight restrictions and help them prepare for COVID Normal. The types of support included in this package are divided into three categories: Business Support, Business Adaptation, and Waivers and Deferrals.

Included in Business Support is the third round of the Business Support Fund for small- and medium-sized business ($822 million), applications have been opened since 18 September 2020.

Meanwhile, Business Adaptation involves funding, tools, and resources to help businesses adapt to COVID Normal. Tax and cashflow support amounting to $1.8 billion will be provided by the government under the Waivers and Deferrals scheme.

For a detailed rundown of the inclusions of the Business Resilience Package, click here. Let us help you assess your eligibility and gain access to government support. Get in touch with us so we can schedule a consultation.

Sole Trader Support Fund

The Victorian Government has announced the Sole Trader Support Fund for eligible non-employing businesses affected by COVID-19 restrictions. Under this scheme, sole traders will receive a grant of $3,000.

Grant applications will open in the coming days and the full list of eligibility criteria will be published soon. We will keep you updated as soon as more information is available.

Get in touch

We have covered many topics this week, with so many changes and updates let us know if we can assist with anything.