Weekly Digest – 28 October 2020
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s updates and some ideas that will help us all overcome this crisis.
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 condition for all employees included in the JobKeeper scheme.
New entities enrolling for the JobKeeper will also need to enrol 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.
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, do not hesitate to contact us for guidance.
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:
- lease payments
- insurance registration
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, you may contact us so we can help you with your claims and ensure your compliance.
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 so we can sort it out for you.
Major Overhaul to Bankruptcy Laws
After the major changes to the JobSeeker and JobKeeper programs, Australia’s bankruptcy laws have been overhauled, throwing a lifeline to struggling businesses amid the COVID-19 crisis.
Under the proposed changes, businesses with liabilities of less than $1 million will be able to keep operating while they come up with a debt restructuring plan, rather than be placed in the hands of administrators.
The new rules which will become effective from 1 January 2021 follows the government’s decision earlier this month to extend its temporary insolvency and bankruptcy protection rules until the end of 2020.
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), with applications opening on 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.
Government-backed COVID-19 Loans Extended
The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
Westpac Helps AU Small- and Medium-Sized Businesses
Westpac will be accepting applications for new and existing eligible customers for equipment finance goods loans, as part of phase two of the Federal Government’s Coronavirus SME Guarantee Loan Scheme.
Those with up to $50m in annual turnover will be offered new equipment loans with interest rates starting at 2.99% fixed for 5 years on loans up to $1 million. This comes as new research from the Westpac SME COVID-19 Response Report revealed 80% of SMEs have either reduced their spending, held off making huge purchases, or held off borrowing due to economic uncertainty.
Westpac will also waive the Equipment Finance establishment fee (usually from $450) on Equipment Finance Goods Loan applications submitted under Westpac’s SMEG offer and settled between 1 November 2020 and close of business 31 December 2020.
If you need professional assistance for your loan application, get in touch. We can also help you consider other funding assistance you may be eligible for.
Get in touch
Data suggests that the Australian economy is already on the road to recovery, however we think it will be a long bumpy road out. Now is a good time to get in touch to check your road to recovery is on track.