Potential retrospective JobKeeper payments

The Full Federal Court has ruled the ATO’s discretion in denying certain businesses access to JobKeeper and the cash flow boost was applied narrower than it was intended to be.

  This court ruling was handed down in March, with the ATO confirming they will begin a review of certain previous decisions, using the wider discretion deemed appropriate, to assess if a different outcome is possible.

  This broadening of scope will grant further time for a business to hold an ABN, and further time to provide notice to the commissioner of assessable income or supplies. Robyn Jacobson from the Tax Institute expects ‘it [to] affect thousands of taxpayers’ who were told they weren’t eligible.

  This automatic review of decisions by the ATO will only apply to applications that have met all other eligibility criteria for the COVID-19 stimulus payments. Each case will be reviewed by the commissioner and if overturned, ATO will contact taxpayers individually for more information.

  For more information, including how this might affect you and what happens next, please visit the ATO’s website here.

 

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If you’ve been trading cryptocurrencies, you may have to report it on your tax return. Working out your cryptocurrency tax can be complicated, and there are a lot of different factors you need to consider when preparing your tax return. To help you out, we have developed a quick guide to break down everything you need to know about cryptocurrency and tax in Australia.

 

What are cryptocurrencies? 

Simply put, cryptocurrency is a new form of digital money that operates on blockchain technology. They don’t physically exist. Like regular cash, digital currencies are accepted as a means of payment and can be used to purchase goods and services online. Bitcoin is the most popular cryptocurrency, but there are many others out there.

 

How they work

The Australian Tax Office (ATO) classifies cryptocurrency as an asset; therefore, you will need to assess your Capital Gains Tax every time you trade, sell or give away your cryptocurrency. Cryptocurrencies are subject to Capital Gains Tax (CGT) and income tax, however, exempt from the Goods and Services Tax (GST).

Capital gains are the tax you pay when you make a profit on a transaction. For example, if you buy a Bitcoin for $3,000 and sell it six months later for $5,000 then you’ve made a capital gain of $2,000 and will need to pay tax on that amount.

On the other hand, when cryptocurrency service providers send free coins to users (also known as airdrops), this can trigger income tax. The value of those coins must be declared as ordinary income.

 

How does the ATO figure out how much crypto tax I owe? 

In late 2019, the ATO started collecting records from Australian cryptocurrency service providers to ensure people were tax compliant. Each time you make a transaction, there is an electronic record that is reported to the ATO from your service provider. That’s why it’s more important than ever to know what you’re doing and report your income correctly.

 

Am I an Investor or Trader?

The first thing you need to do is to determine whether you’re classified as an investor or trader by the ATO.

An investor is someone who buys and sells cryptocurrency for long-term personal gain. The majority of people who engage in cryptocurrency are considered to be investors, therefore their transactions are subject to Capital Gains Tax.

On the other hand, a trader is someone who carries on a business to earn income from buying and selling cryptocurrency. Rather than putting a value on capital gains, they treat their profits as business income instead. For traders, different Income Tax rules apply compared to Investor CGT Events.

 

To give you a better understanding, in each scenario below, we determine the type of tax liability that applies.

Buying Cryptocurrency – There are no taxes involved when you buy cryptocurrency in Australian Dollars.

Selling Cryptocurrency – Selling cryptocurrency will trigger Capital Gains Tax. Capital gains or loss can be calculated by subtracting the amount you paid for a cryptocurrency from the amount you sold it for. This figure forms part of your income and needs to be declared on your tax return.

Trading Crypto for Crypto – Buying one cryptocurrency with another will trigger Capital Gains Tax. The ATO sees a trade as two separate transactions, first, you are selling your cryptocurrency for X amount, then buying another with those earnings. So, even though you never receive the money in hand, you still need to pay tax on the sale.

Gifting Cryptocurrency – Gifting crypto is considered the same as selling it, so it is a taxable event and subject to the Capital Gains Tax. You don’t have to pay taxes when you receive cryptocurrency as a gift. However, you will be subject to the Capital Gains Tax when you dispose of the gifted cryptocurrency.

 

What records do I need to keep?

Whether you’re an investor or a trader you need to keep clear records, including the following information:

• The value of the transaction
• The date the transaction was completed
• The purpose of the transaction
• The details of the other party involved

Examples of useful records to keep include:

• Receipts of your cryptocurrency purchase
• Records of agent, accountant, and legal costs
• Exchange records
• Digital wallet records
• Software costs associated with the management of your tax affairs

 

Where do I keep these records? 

There are a number of different cryptocurrencies tracking software available in the marketplace that can help you keep track of all your transactions. (CoinTracker is one example of no doubt many – however, please be aware we are not recommending this product. You should conduct your own research and investigations before deciding on a specific product).

If you need assistance with your tax return or need more information about how cryptocurrencies may affect your taxes, please contact The Hrkac Accounting Team on 03 5224 2366.

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Are you looking at buying a property but worried about having the cash handy for a deposit? You could consider a deposit bond.

A deposit bond is a financial agreement that can be used in place of a cash deposit when purchasing a property, guaranteeing to the seller that the buyer will pay the full deposit at a later date.

Deposit bonds are used instead of cash to pay a deposit on a property. If you decide to use a deposit bond, you will pay the purchase price, plus the deposit and stamp duty at settlement.

Here are 10 things you need to know about deposit bonds:

1. Vendor Approval Is Essential

Before lodging your application, it’s crucial that you seek approval from the vendor/real estate agent to use a deposit bond to purchase the property, instead of a cash deposit.

 

2. Eligibility Requirements Must Be Met

To be eligible for a deposit bond:

• You must have a formal finance approval; or
• You must have at least a pre-approval that’s subject to valuation only; or
• If you’re selling a property and funds from the proceeds of the sale are enough to purchase your new property outright, then you are eligible.

If none of the above applies to you, please talk to one of our specialist mortgage brokers.

 

3. The Cost Of Deposit Bonds Vary

The cost of a deposit bond depends on the value of the property and the length of time to settlement.

If you were to purchase a home for $500,000 and need a 10% deposit of $50,000. It would cost you around $600 for a deposit bond. If you’d like a rough estimate, contact our specialist mortgage brokers.

 

4. Deposit Bonds and Bank Guarantees Are Different

A deposit bond and a bank guarantee are similar in that they provide a guarantee to the vendor that the purchaser will pay the deposit at settlement. However, there are some key differences that you should consider before making a decision.

Security – Deposit bonds are unsecured, and bank guarantees are secured.

Although deposit bonds require an eligibility assessment to ensure you have the financial capacity to settle on your purchase, they are unsecured. Whereas bank guarantees are secured and require real estate or cash security to release.

Cost – Deposit bonds have a one-off fee, but bank guarantees have higher set up and ongoing costs.

Time – Deposit bonds are usually faster to obtain than a bank guarantee, as they require less paperwork and have a simple application process.

 

5. Time Needed For A Deposit Bond When You Have An Off The Plan Purchase

Most of time, when you buy an off the plan purchase a deposit bond is issued up to the ‘sunset clause’ date. A sunset clause date is found in your contract of sale and allows the vendor or purchaser to rescind the contract if the title of the property has not been created by a specific date.

 

6. First Home Buyers Are Eligible

As a First Home Buyer, you can obtain a deposit bond if you:

• Already have formal approval for your finance through a family guarantor loan, and
• Your property settles within six months.

If settlement is more than six months or you don’t have finance approval, your guarantor will need to apply with you for your deposit bond. You or your guarantor will need to have a property with the equity to release a deposit bond. This is to ensure the guarantor can pay back the deposit bond amount in the unlikely event of a claim on your bond.

 

7. No Repayments

If you use a deposit bond, you never actually pay back the deposit unless there is a claim. Its purpose is to provide reassurance to the vendor that you have sufficient funds to complete the purchase at settlement. Therefore, at settlement, you will pay the purchase price, plus the deposit and stamp duty.

The only cost involved is the deposit bond fee, which is provided to the lender up front.

 

8. No Interest Payments

No interest payments are required, besides the one-off deposit bond fee.

 

9. Deposit Bonds Can Be Issued Within 4-48 Hours

Once the lender has received your signed application with the bond fee payment, your deposit bond can be approved and issued within 4 to 48 hours. Once approved, the bond deposit is released immediately. The Hrkac Group typically have your deposit bond ready in less than one business hour!

 

10. The Best Way To Obtain A Deposit Bond Is Through A Mortgage Broker

The Hrkac Group make it easy to apply for a deposit bond. Contact our team and we will work with your deposit bond provider on your behalf, so you don’t need to add another thing to your list.

The supporting documents you need will depend on your application type, so we’ll tell you exactly what you need to provide. Then, when the application is ready, we’ll send it to you for electronic signing. It’s as easy as that!

If you have any questions about the topics discussed in this blog, feel free to contact our specialist mortgage brokers, who will provide a personalised and custom service based on your individual circumstances.

 

 

H G Financial Services Pty Ltd ABN 25 123 478 907 is a Corporate Authorised Representative no.401592 of Alliance Wealth Pty Ltd
Alliance Wealth Pty Ltd ABN 93 161 647 007
AFSL 449221
FSG – www.centrepointalliance.com.au/fsg/aw

There’s a lot of talk about growing wealth and protecting assets when it comes to financial advice, but do you really know what that means?

When you engage a Financial Advisor, you expect them to give you advice on how to make your money work for you. Whilst this is true, it’s a broad description and doesn’t cover the nitty gritty of what they can do for you and your future.

Like anything, you are paying a Financial Advisor for their experience and knowledge, and ability to assist you in meeting your goals and ultimately leave you in a better position.

We all have goals to achieve; whether it’s buying your first house, retiring in style, paying debts or investing for long-term gain, Financial Advisors are here to help you manage your money, assets and expectations so you can plan for the future lifestyle you pictured.

 

So, what do financial advisors actually do?

For Superannuation

As we’ve written about previously, the second best time to start planning your retirement is now, so with that in mind when it comes to Superannuation a Financial Advisor does many things to help you, well before retirement:

• Choosing a super fund
• Investing your super
• Organising insurance through your super
• Contributing to your super
• Implementing tax effective strategies

Throughout your working life, you will accrue super to help you later in life when you no longer can (or want) to work. This money will be invested and continue to grow as you work, setting you up for the future.

Choosing the right super fund for you can be daunting, do I go for a Retail fund or an Industry fund or a SMSF? Can I choose where the money is being invested? Do I need to make personal contributions? All these questions can be answered by a Financial Advisor once they have gotten to know you and assessed your future goals.

Financial Advisors add value to your Superannuation by using their experience to educate you on the ins and outs of Superannuation, making sure that your individual set up is in alignment with what you want to achieve.

Financial Advisors will help you get involved early so that you can achieve your retirement lifestyle goals.

For Retirement Planning

As you approach retirement and the vision of your future comes more into focus, it might not look as you had pictured. If this is the case a Financial Advisor can help you to:

• Determined your retirement income needs
• Maximise super contributions
• Ensure you’re invested appropriately
• Regain control
• Or transition into retirement early

For those whose retirement is fast approaching, Financial Advisors can help you to figure out how much income you’ll need to generate from your Superannuation throughout retirement, to fulfil your lifestyle. If things aren’t aligning, they can take you through any adjustments that need to be made in order to bring you closer to your goals.

Not only do Financial Advisors look at whether you’ll have enough to sustain your lifestyle, they also provide you with the reassurance you need to reduce the stress of retiring and give you back control of your future.

For Post-Retirement Income Strategies

After retirement, your money doesn’t stop working for you. Although you are accessing your Superannuation, the funds continue to be invested and grow with you so, it’s important that they are monitored and adjusted on an ongoing basis – this is where Financial Advisors can help.

It’s not just Superannuation that can assist you in funding your retirement either. There are many income generating investments that can be utilised to build your bespoke retirement income plan, such as managed funds and annuities. A Financial Advisor can ensure that your entire financial position is incorporated to provide you with the best possible outcome to support you throughout retirement.

For Insurances

Often a daunting topic, Financial Advisors are well versed in which insurances are available to you through you Superannuation, or directly, and how to best to structure them. If you don’t know what insurances you might have, or even what you might need, Advisors will assess your situation and help you understand the levels of cover that you need in order to protect yourself and your family if the unexpected should happen. The types of insurance cover that should be considered are:

• Life
• Total and Permanent Disability
• Trauma
• Income Protection

Unfortunately, not all cover is made equal and with so many provider options, it is easy to settle for an insurance policy that may not give you what you and your family need. A Financial Advisor will undertake a full assessment of your personal situation, and recommend the right comprehensive cover for you.

For Personal Investments

So, you’ve got savings in the bank and you know that property is an option, but you’re wondering what else is out there to invest your money in for a good future return?

There’s a lot to think about when it comes to investment options:

• What do you want to achieve?
• How long do you want to invest for?
• How much risk do you want to take?
• Are you looking for tax effective investments?
• Do you have specific ethical preferences?
• Are you more cost conscious?

There are many investment options available, and each serve a different purpose. Whether it’s shares or ETF’s, managed funds or bonds, a Financial Advisor will have the skills and knowledge to recommend an investment strategy to achieve your goals.

So, do you need a Financial Advisor?

Planning for your future involves a lot more than writing down your financial goals and wishing they will come true. Creating a financial plan is all about making your money work effectively, by choosing the right strategies for your individual circumstances.

Daunting as it is, Financial Advisors are here to give you the tools you need meet your goals and take control of your financial future. Here at the Hrkac Group, we are a team of experienced, capable and respected advisors who are passionate about educating you on the strategies and options available to get the best possible outcome for you.

Why use Hrkac Group’s Financial Advisors?

Our Financial Planning team are here to bring you value through their experience and wealth of knowledge. They are here to educate you on how to make your money work for you and achieve the goals you’ve set together.

The team of experienced advisors will use the initial meeting to get to know you, do a deep dive to assess your situation and help you to realise your financial goals.

Once your goals are in place, they will create a bespoke financial plan that will leave you with the best possible outcome. But the process does not end here, you can feel assured that our team of advisors will monitor your financial plan closely and ensure that it continues to meet your goals at each annual review, so that you’re free to live your life with a little less stress.

Find out more information about our Financial Advice services here.

Contact us today to start your Financial Planning journey: email or phone 03 5221 2355.

H G Financial Services Pty Ltd ABN 25 123 478 907 is a Corporate Authorised Representative no.401592 of Alliance Wealth Pty Ltd
Alliance Wealth Pty Ltd ABN 93 161 647 007
AFSL 449221
FSG – www.centrepointalliance.com.au/fsg/aw

As a result of everything that has happened this year, we are seeing the lowest interest rates on offer from the major banks in a long time. With rates dropping below 2.5%, now is the best time to get one step ahead on one of your biggest debts.

Whether you’re looking at purchasing a new property, or already have a home loan to pay off, these low rates are going to be in your favour.

If you already have a home loan, the temptation to drop your repayments is there, now that your loan is accruing less interest however, we have some top tips on how to use this drop in interest rates to your advantage and come out the other side a winner:

 

Don’t decrease your repayments.

If you can afford to, leave your repayments at their current rate (or even increase them!) so that you are effectively overpaying on your loan. By simply putting away an extra $50 on top of your minimum repayments you could save yourself over $14,000 in interest over the life of your loan (based on a $300,000 loan with 5% interest over 25 years) – more money in your pocket!

 

Choose a fixed loan.

Fixing all or part of your home loan is the best way to take advantage of the low rates and protect yourself against sudden rate increases over the next few years. This gives you some peace of mind that you won’t be surprised by any sudden or dramatic rate increases and you’ll know exactly how much you need to put away each month to make the repayments.

 

Open an offset account.

Some loans come with the ability to offset your savings account against your home loan. This in turn reduces the interest you pay on your home loan, by offsetting the interest your savings accrues. This is another way to add a buffer to the amount of interest you pay on your home loan.

At The Hrkac Group, our Finance team can help you find the right loan, set up an interest rate to suit your needs. Give us a call today on 5224 2366 with your questions.

As one of the hardest-hit groups throughout COVID restrictions, The Government is now encouraging businesses to employ workers aged between 16 and 35 who were receiving income support in the last 3 months.

The new JobMaker Hiring Credit will provide employers with an incentive payment for each additional eligible worker hired after October 7^th, 2020 which will help to subsidise the costs associated with additional workers for the next 12 months.

The payments will be made to employers directly if their nominated employees are between the ages of 16 and 35 when they began employment and they were receiving one of the following income support services: JobSeeker, Youth Allowance or Parenting Payment consistently for 1 month at least, in the last three months.

Applications are open for employers to register for the JobMaker Hiring Credit as of December 6^th, 2020 and you do not need to register before you hire eligible employees. For workers between the ages of 16 and 29, you (the employer) will receive $200 a week, and for those workers aged between 30 and 35 you will receive $100 a week in support.

There will be eight claim periods between now and early October 2021. The first claim period begins on February 1^st (for employment between 7/10/20 and 6/1/21) and payments will be made in arrears.

You can find more information about this scheme here:

JobMaker Hiring Credit Scheme

Key Dates

Registration

Please reach out to The Hrkac Group if you have any questions or need assistance with the JobMaker Hiring Scheme.

As part of the Victorian Governments Business Resilience Package, details about the different grants available to industries have been announced.

The $3 billion put forward is to help Victoria businesses feeling the ongoing effects of Covid-19 restrictions, move to Covid-normal operating levels.

See details about each new package below:  

Outdoor Eating and Entertainment Package

This Package is designed to help businesses create safe outdoor dining spaces. Grants of up to $5,000 will be available to hospitality industries with an annual payroll of less than $3 million to enable outdoor spaces to be set up, adapted and expanded. These venues must be located outside the City of Melbourne local government area.

Full eligibility criteria will be in the application due to come out on Monday 28^th September, 2020. More information.  

Licensed Hospitality Venue Fund

This grant is designed to assist hospitality businesses with cash flow and support them to survive trading restrictions. Grants of up to $30,000 will be available to eligible businesses based on location and patron capacity.

**Please note businesses eligible for the Licensed Hospitality Venue Grant will NOT be eligible for the third round of the Business Support Fund Grant.

Full eligibility criteria will be in the application which will open in the coming days. More information.  

Sole Trader Support Fund

This grant is primarily for eligible sole traders that operate from commercial premises or locations. Grants of $3,000 will be received by those sole traders to help see them through the restricted trading period.

Full eligibility criteria will be in the application which will open in the coming days. More information.

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Please visit previous blog posts for more information on the support available to Victorian businesses:

Business Support Fund Round 3 JobKeeper Extensions Instant Asset Write-Off Extension Covid-19 Business Guide

If you need assistance with applying for the available grants, please contact us at the office to organise an appointment.

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**Applications are now open.

The Victorian Government has recently announced more support measures as ongoing help to businesses that have been impacted by the restrictions imposed, through the new Business Resilience package.

$3 billion will be available to Victorian Businesses in varying formats to help prepare everyone for Covid-normal operations.

Amongst the support on offer is round 3 of the Support Fund where grants of up to $20,000 will be made available, as well as: up to $30,000 grants for Hospitality venues; up to $3,000 for Sole Traders and up to $20,000 for Alpine businesses.

Below is a link to the Business Victoria website outlining the range of grants as well as other forms of support now available including funding, tools, resources, and waivers and deferrals for tax support:

Business Resilience Package.  

Applications are now open and close at 11.59pm on 23^rdNovember, 2020 or when funds are exhausted.

Your business must have an ABN that falls within the ANZSIC codes that have been deemed as eligible to qualify.

How to apply.  

**Please note businesses eligible for the Licensed Hospitality Venue Grant will NOT be eligible for the third round of the Business Support Fund Grant.

If you require any assistance please do not hesitate to contact our office. We are here to help.

The JobKeeper Scheme has now been extended to include any eligible employees who were employed as of 1st July 2020 and are not currently nominated by an employer for JobKeeper payments.

Under the new ‘one in, all in’ principle for JobKeeper, employers must have their new employee nomination notices lodged by August 24th, to be covered under the scheme. This eligibility retest allows employees who weren’t eligible for the scheme initially to be captured and included in the extension.

This retest will allow new employees hired after March 1st, long-term casuals, and those who now qualify based on age or visa status to be able to receive payments from 3rd August 2020 – this is Fortnight 10 under the current JobKeeper Scheme. Employers must pay Fortnight 10 and 11 by August 31st to qualify.

The clock is ticking. You can find more information about this urgent update on the ATO website here or you can call us at the office on 03 5222 2366. IMPORTANT: Employers must provide a nomination form to employees to complete by 24th August 2020 and also have paid their employees the JobKeeper amount of $1500 per fortnight for Fortnight 10 and Fortnight 11 by the 31st August to qualify.

With new stage 3 and stage 4 restrictions in place as of August across Victoria, the Business Support Fund grants have been extended to accommodate further impacts to businesses as a result.

Businesses who employ staff in Victoria who are impacted by stay-at-home restrictions and operating at a limited capacity, or no longer operating, may be eligible to receive one-off grant payments under this Expansion program.

To support businesses that have encountered hardship due to current restrictions, one-off grants will be made available to eligible businesses under the Business Support Fund – Expansion program:

• $10,000 for employing businesses in metropolitan Melbourne and Mitchell Shire in recognition of spending longer under restrictions (if your business has already applied for the initial $5,000 grant under Stage 3 restrictions you will automatically receive the additional $5,000 and do not need to re-apply)
• $5,000 for employing businesses in regional local government areas (except Mitchell Shire)

In order to apply for the Expansion package, all businesses in both Metro Melbourne and Regional Victoria must meet all of the following criteria:

• operate a business located within Victoria;
• be a participant in the Commonwealth Government’s JobKeeper Payment scheme;
• employ people;
• be registered with WorkSafe on 30 June 2020;
• have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis;
• be registered for Goods and Services Tax (GST) as of 30 June 2020;
• hold an Australian Business Number (ABN) and have held that ABN at 30 June 2020; and
• be registered with the responsible Federal or State regulator.

** Please note applications close on 14^th September 2020.

Visit the Business Victoria website for more information here. View the Expansion program Fact Sheet here.

If you need assistance assessing your eligibility or preparing your application, we are here to help. Contact us on 03 5224 2366 to get started today.

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Originally announced in March 2020, the JobKeeper Payment scheme was introduced to allow employers, sole traders, and other entities, who are significantly impacted by COVID-19, to continue paying their employees’ wages and keep Australian’s employed.

This Government scheme was intended to close on September 27^th, 2020 however it was announced this week that a six-month extension has been given to the subsidy payments.

Under the current scheme, employers can apply to receive $1,500 per employee per fortnight as a subsidy to assist in paying wages. Under the latest revisions, this payment amount will continue to be claimable until September 27^th, 2020 where the payment will then be reduced to $1,200 per fortnight per employee. From this date, new lower payment rates will also apply for employees that work less than 20 hours a week.

Further reductions in payments will be made from January 4^th, 2021, where the fortnightly subsidy will reduce to $1,000 per employee. The scheme is now projected to finish on March 28^th, 2021.

From September 28^th, businesses and not-for-profits will need to reassess their eligibility for the quarter, to demonstrate their continued decline in turnover.

The application process remains the same and will continue to be open to new recipients during the extension period, providing they meet eligibility requirements.

For more information on the extension and further eligibility requirements from September onwards click here.

For more information on how to check your eligibility and apply to receive JobKeeper payments click here.

There is more detailed information on what steps businesses are required to take each month in order to continue to receive the subsidy payments. You can view that information here.

If you need any assistance with applying for the JobKeeper scheme, please contact the Hrkac Group on 03 5224 2366 and we will help you through the process.

Liability limited by a scheme approved under Professional Standards Legislation.