No images? Click here 28 May 2020 Synstrat Update - May 2020
The world breaks everyone, and afterward, some are strong at the broken places. Ernest Hemingway Australians are making slow steps to come out of the shadows, cautious that we may have to retreat at some stage. Businesses are re-opening, traffic is increasing and boot-camps have returned to local parks. Even the government has found some joy by way of a $60b saving on their JobKeeper program! Make of that what you will, but we will all be paying for this downturn for quite some time. If we can pay it back while we’re as gainfully employed as we hope, that may be the best we can ask for at the moment. JobKeeper subsidies for April Many businesses have already ridden the wave of paying two fortnights worth of wages in April in advance of receiving their JobKeeper subsidy in May. For those businesses hoping to join them, you have until 31st May 2020 to report the business participant, employees and turnover levels for April. If you miss out in April, you may still qualify for May and can report then. Reporting is done on the ATO’s Business Portal, MyGov website, or through your tax agent. Monthly reporting for JobKeeper purposes will be due by the 14th of each month. To claim the payment for your May wages you will need to lodge the monthly declaration by 14th June. We will contact those clients we are assisting next week to get the May report submitted. While business turnover starts to recover, many are concerned that their JobKeeper payments will stop. This is not the case. Once you have demonstrated a 30% (or greater) decrease in turnover since March, you are eligible for the life of the program. A reminder that the JobKeeper subsidies from the ATO are taxable income to your business; meaning we’ll start paying back our share of the government’s debt soon enough. June 2020 Super contributions Any businesses still using the Small Business Superannuation Clearing House (SBSCH) are being reminded to pay your employee’s super by 23rd June 2020 in order to get a tax deduction in your 2020 tax returns. To get a tax deduction for superannuation, the payment needs to be held by the Super Fund. Using a clearing house can delay the transfer of funds between your bank account and the Fund by up to 10 days in some cases. The timing requirement for super contributions for employees is 28 days after the end of each quarter. If your cashflow won’t allow the payment of your April-June super obligations before 23rd June, you still have until 28th July to get your payment in; it will just delay the deduction until next financial year. New assets and depreciation changes With JobKeeper being such a difficult beast to tame, many of you may not be focused on the recent changes to depreciation deductions. Equipment tends to fail at the most inconvenient time and you may be considering replacements or upgrades at the moment. If you’re in this situation, the good news is that assets costing up to $150,000 for small businesses which have been purchased between 12 March and 30 June 2020 can be written off in full in the 2019/20 year. This limit excludes cars, which are subject to a deductible limit of $57,581. Next financial year there is an increased depreciation rate of 57.5% on brand new assets (ie not second-hand) up to a value of $150,000 for small businesses. The asset will need to be owned by your business so leased assets won’t qualify. While these changes seem attractive, they are only altering the timing of your deduction, not its value. Cashflow forecasts should be analysed before committing to large purchases, particularly in a time where turnover may take some time to recover. State government grants Most state government grants have been extended beyond their original reach of certain industry types. Application processes vary by state and have different qualifying criteria. Cut-off dates for applications are imminent so we recommend that any last-minute submissions are completed as soon as possible. End of year payroll Employees will no longer receive a Payment Summary detailing their wages for the year, unless they are family members working in a small business. Your payroll software has been reporting earnings to the ATO all year with your Single touch Payroll (STP) reporting. This will create an Income Statement which your employees can access via their MyGov account. Tax agents will have access to the Income Statements of any individual clients, but not if they only act for the business. STP reporting must be finalised for the 2019/20 year by 14th July for most employers. Feel free to contact our office if you have any questions before you finalise your last pay run of June. For those who have not moved to STP yet, there are a number of free and low-cost options out there to chose from. The best time for a new payroll solution is 1 July - so the time to move is now! We wish you all well in the lead up to the new financial year. Should you have any questions regarding any of the above issues, please contact your Synstrat Accountant on 03 9843 7777. The Synstrat Team The above information is general advice only. To discuss how this may affect your personal situation, please contact your Synstrat Adviser before taking any specific action on (03) 9843 7777 or office@synstrat.com.au The Synstrat Group provides Business Advice, Accounting and Financial Services. Prepared by Synstrat Accounting Pty Ltd for clients of Synstrat Group. 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