$25k HomeBuilder payment
To support a substantial amount of residential construction workers, the Australian Government has introduced a new HomeBuilder package to inject $688 million into the industry, which is falling as a result of COVID-19.
Seeing a drop in approvals of ~2%* since March, the Building Industry is still feeling the effect this pandemic is continuing to cause.
This $25,000 grant comes with income and valuation eligibility requirements as well as restrictions on what type of construction the funds can be used for.
Homeowners will be able to use the money to put towards building a new owner-occupier home or any substantial renovations on their primary place of residence.
To be eligible to receive the one-off cash payment, singles must earn less than $125,000 and couples $200,000 between them, in the previous financial year. The building work contract must be signed between now and December 31, with works to begin within 3 months of the contract date.
For homeowners wishing to renovate, their renovation costs must be valued between $150,000 and $750,000, with the home valued as less than $1.5 million (before the renovations) to be eligible.
For people looking to build a new home to live in, the house and land must be valued at less than $750,000 to be able to take part in the incentive.
Types of construction not covered in the incentive:
- swimming pools, tennis courts, outdoor spas and saunas, sheds, or garages.
- new builds or renovations of any investment properties
The new HomeBuilder Package will be available alongside any current first homeowner incentives in place by governments in each state and territory.
Contact Paul Duncan at The Hrkac Group and our lending team for more information on the HomeBuilder Grant, how to apply, and to assess if you’re eligible.
* Source.
HG Financial Services – Corporate Authorised Representative 401592 of Alliance Wealth Pty Ltd ABN: 93 161 647 007 AFSL: 449221
As part of the Government’s measures to support businesses survive the economic impact of COVID-19, the instant asset write-off (IAWO) threshold amount was increased from $30,000 to $150,000 as of 12th March, 2020.
Initially intended to end on 30th June 2020 and revert back to different, less beneficial depreciation rules from the 1st July 2020; the Federal Government has decided to extend the period up to and including the 31st December, 2020. This proposed extension is currently being processed by the Government, and is yet to be finalised at the time of posting this blog (see here for more information).
This IAWO increase is available to all businesses with an annual turnover of less than $500 million and will help to further support planned investments for around 3.5 million businesses in Australia.
Here are the facts:
- Eligible businesses will be able to claim immediate deductions on their annual turnover for assets purchased for $150,000 or less (excluding GST where applicable)
- There is a cap for some “Motor Vehicle” purchases – which are limited to a maximum of $57,581 for the 19/20 Tax Year ($59,136 for the 20/21 Tax Year)
- This deduction will be claimable on a PER asset basis (i.e. you can write off multiple assets at $150,000 each) (grouping rules do apply in some instances)
- To be eligible your business must have an annual turnover of less than $500 Million
- This IAWO increase is in effect from 12th March 2020 until December 31st, 2020 for assets first used and installed by the end date
- This will result in a lower payable tax amount at the end of the financial year
We will endeavour to keep you updated on when this extension is confirmed by the Government. In the meantime, if you have any questions or queries relating to the IAWO increase please contact our Accounting team here.
Liability limited by a scheme approved under Professional Standards Legislation
Many businesses are experiencing great difficulties due to the COVID 19 Pandemic, with a significant or even complete drop in turnover.
The Federal and State Governments have announced restrictions on landlords taking action against tenants for falling behind on rent. The new measures also require that tenants and landlords negotiate in good faith to try to reach an agreement.
The COVID-19 Omnibus Emergency Measures Act and Regulations 2020 have been passed and they set out the rights and responsibilities of the parties involved in Commercial Leases and Licences.
As stated in the Act, if the landlord and tenant reach an agreement on any rent reduction then, that agreement will remain in place as long as both parties agree to do so.
In order for a tenant to be eligible for rent relief the following must apply:
- The lease is an ‘eligible lease’ pursuant to the regulations;
- The tenant must be small to medium enterprise (SME), and;
- The tenant must be a participant in the JobKeeper scheme.
If an agreement hasn’t or can’t be reached, then the tenant should immediately write to the landlord:
- Stating that the lease is an eligible lease and the lease is not excluded from the operation of these Regulations (under section 13(3) of the Act);
- Provide evidence that the tenant is an SME and is a participant in the JobKeeper scheme
Once received, under The Act the landlord must offer rent relief within 14 days.
If an agreement still cannot be reached between the parties then either the landlord or the tenant may refer the dispute to the Small Business Commissioner for mediation.
Here at the Hrkac Group, we’re here to help.
If you are a tenant and you have qualified for the JobKeeper scheme and you need a rent reduction, you should immediately write to your landlord.
As part of our professional services, the Hrkac Groups Legal team is across the latest measures and can offer assistance with rent relief negotiations.
Contact us today on 03 5224 2366.
Preying on members of the public, scammers are targeting JobKeeper applicants by impersonating the ATO.
Stating they are calling on behalf of the ATO, scammers are asking for bank account details in order to process JobKeeper payments.
The ATO has advised that this is most definitely a scam and to hang up the phone.
JobKeeper payments are reimbursed to the employer, not directly to the employee, so therefore no individual employee bank details are required.
People are encouraged to call the Tax Office if they’re unsure a call from the ATO is legitimate on 1800 008 540.
Valid as at Monday 31st March 2020 Last updated Thursday 25th September 2020
This page has a summarised checklist of measures that may apply to you and then the following information is more detail on some of the current measures. We stress that this is in no way intended as advice or a replacement for your Accountant and/or Financial Advisors assistance.
We will be updating this post regularly as new information comes to light. Please continue to check back on this page for the latest information.
Various Stimulus Measures:
- JobKeeper Payment – Confirm eligibility, gather required information and apply online
- Employers – Lodge all Activity Statements correctly and in a timely fashion to get access to the Business Cashflow Boost
- Apprentices/Trainees – Talk to your Apprenticeship/Trainee body to lodge your Application ASAP
- Banking – Talk to your Business Banking Manager to determine what your eligibility to various measures are
- ATO – Speak to the ATO or your Accountant to organise Debt deferrals where applicable/eligible
- Payroll Tax – Apply for Refund of any Payroll Tax paid this year where applicable (Please continue lodging where required)
- Victorian Business Support Fund – A third stream of funding is now available to eligible small businesses (applications open)
- Victorian Business Resilience Package – Further grants are available to both Metro Melbourne and Regional Victoria as a result of further lockdown restrictions in place.
- Rental – have you spoken to your Landlord and negotiated your lease payments?
Other Tasks:
- Ongoing Employment Arrangements – Work out on what basis you are going to pay employees or send onto unpaid leave etc
- Suppliers – speak to your Suppliers. Negotiate payment terms for any accounts and/or negotiate rates for a period
- Have you reviewed all Overheads? Cancelled or Suspended any Subscriptions not required during this period?
- Accounts/Bookkeeping – Stay on top/up to date with your Accounting/Bookkeeping during this period – you will hopefully be to busy to worry about trying to catch back up when things pick back up
- Floor plans for applicable businesses – Speak to your Financier to negotiate terms
- Other Financiers (E.g. Car finance, Equipment finance etc) – Contact them and negotiate terms
Members personal matters:
- Personal Mortgage – Per above – speak to your banking manager – some banks are offering repayment holidays etc.
- Superannuation – Are you eligible to draw down up to $10,000 from your Superannuation Fund? More information here
- Centrelink – Are you eligible for Job seeker stimulus payments? More information here
Employers
JobKeeper Payment
You may be eligible to receive assistance in paying your employees if your business is affected by COVID-19.
Extended to March 2021
Originally due to run until September 27 2020, the JobKeeper payment will now continue until March 28 2021. From September 28 2020, the payment rate of $1500 per fortnight (per employee) will reduce to $1,200, reducing further for $1,000 per fortnight (per employee) on January 4th 2021.
More information on the extension changes here.
More general information here.
JobKeeper changes to the Fair Work Act information.
Each month
You must make a business monthly declaration each month to:
- re-confirm your business and employee eligibility
- provide your business’s current and projected GST turnover.
- By the 14th of each month: complete Step 3: Make a business monthly declaration to claim JobKeeper payments for the previous month.
- You should also make any updates to your employees’ eligibility using the ‘Maintain’ function as part of your business monthly declaration.
- **You need to do this between the 1st and 14th of the following month (for example, to be reimbursed for JobKeeper payments in May you need to complete your declaration by 14 June).
**After May: If you are enrolling and identifying your employees and business participant for the first time after May, you must complete Steps 1 and 2 in the month you wish to claim for.
For more information on key dates click here.
To apply for future month’s click here.
We recommend you review the relevant ATO and/or Federal Treasury websites for the current situation.
JobKeeper Scam
Preying on applicants, scammers are targeting the public by pretending to call on behalf of the ATO and ask for bank details over the phone. The ATO has announced that is definitely a scam.
The ATO does not need individual employee bank account details for the JobKeeper payment.
Providing Cashflow boost to Employers
Stimulus payment tied to PAYG Withholding and Activity Statement Lodgements. Entitlements may be between $20,000 to $100,000 over the relevant period depending on your circumstances.
Boosting cashflow overview Treasury Support for Businesses Assistance Fact Sheet.
You do not need to apply for this – but it is based on your Activity Statement lodgements. Therefore timely and correct lodgement of your Activity Statements are crucial to receiving your entitlement.
The cash flow boosts will be made from the Government’s announced date of 28 April 2020. If you lodge early, you will not receive the cash flow boost before this date.
Supporting Apprentices and Trainees
The government will pay some of the wages of your qualifying Apprentices/Trainees.
Support Fact Sheet (page 5)
You need to apply for this. It is best to discuss this with your contact through whom you complete the Apprenticeship paperwork etc.
Other Notes
If you stand down employees on no pay – please be aware some awards may require Annual and/or Sick Leave to continue accruing.
Banking/Lending
Government Measures
Banks may provide some unsecured loans to eligible businesses. Each bank’s offering may vary. Banks were still developing (yet to announce) their policies and offerings at time of writing this guide.
The Government will provide eligible lenders with a guarantee for loans with the following terms: * Maximum total size of loans of $250,000 per borrower * The loans will be up to three years, with an initial six month repayment holiday * The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan
Bank Measures
Each bank will have its own support measures. Many are offering repayment holiday periods for example. Don’t dig your head in the sand – speak to your Business Banking Manager – they are there to help.
Links to the big four Bank sites: Commonwealth Bank of Australia Ltd Westpac Group National Australia Bank Ltd ANZ
ATO (Australian Tax Office)
Increasing Instant Asset Write-Off
Business assets only. Was $30,000 and is now $150,000. (We believe that Motor Vehicles may be limited to $57,581 but are awaiting advice from the ATO on this). Only applies to Capital Purchases contracted to purchase and take possession of between the 12th March 2020 and 30th June 2020. The Federal Government has decided to extend the period up to, and including, the 31st December 2020 (pending parliamentary approval). Provides an instant deduction for eligible Capital Purchases for eligible businesses (rather than depreciating/claiming Tax Deductions over their effective life).
Support Fact Sheet ATO information Extensions details.
Other depreciation incentives may apply to 30th June 2021.
Debts – Payment Deferrals
The ATO will work with businesses that have been severely affected. You can contact the ATO to discuss whether you are entitled to have your Debt put on hold up until the 12th of September 2020. The ATO may also consider other items such as remitting or reducing the interest charged etc.
Changing the GST Cycle
Businesses can temporarily change their Activity Statement reporting cycle from Quarterly to Monthly where you may be entitled to a refund.
Victorian State Government
Payroll Tax Relief
Eligible businesses will not be required to pay any Payroll Tax for the 1st July 2019 to 30th June 2020. Eligible businesses can apply on the SRO PTX system to have any any Payroll Tax paid to date, refunded. **Please note that you are still required to furnish all required lodgements as normal.
Land Tax Deferral
Eligible Landowners can defer their 31st December 2019 Land Tax Assessment payment.
Business Support Fund – Expansion Program
**Applications are now open for the further support grants
If you submitted an application before 11.59pm, 1st June, 2020 and require any further assistance please call Business Victoria on 13 22 15 or email info@business.vic.gov.au.
Expansion Fund Grant Details:
Eligible businesses will receive grants of $10,000, $15,000 or $20,000, depending on the business’ annual payroll.
Applications are now open and close at 11.59pm on 23rdNovember, 2020 or when funds are exhausted.
See our blog for more information here. More Information Expansion Program Fact Sheet Support Fund FAQs.
Please note this link is only for the Victorian State Government Business Support Fund Grant. If you are located outside of Victoria please check your State Government website for any similar grants available in your home state.
Business Resilience Package
The $3 billion put forward is to help Victoria businesses feeling the ongoing effects of Covid-19 restrictions, move to Covid-normal operating levels.
$5,000 will be available to Outdoor Eating and Entertainment venues $30,000 will be available to Licensed Hospitality Venues $3,000 will be available to Sole Traders
See our blog here for more information Business Resilience Package information.
Rental Agreements
The State and Federal Governments have started making announcements on this topic. Please familiarise yourself with the current state of play as we expect further announcements and changes post production of this guide.
Commercial Rent Relief
There is a temporary hold on evictions plus a mandatory code of conduct for commercial tenancies to support small and medium sized enterprises (SMEs) affected by coronavirus.
We will be updating this post regularly as new information comes to light. Please continue to check back on this page for the latest information.
If you would like to discuss any of these matters – please feel free to contact one of the members of The Hrkac Group on 03 5224 2366 or accounting@hrkacgroup.com.au.
** Important Disclaiming – Neither The Hrkac Group or SIBS can provide any form of payroll or Human Resources advice. The information contained on this page is of a generic nature only and have not been tailored to and therefore do not take into account your personal or business objectives, situation or needs circumstances. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice you should consult your qualified Accountant or Financial Advisor as applicable.
Liability limited by a scheme approved under Professional Standards Legislation
You could be eligible for a tax rebate or cash payment.
In response to the COVID-19 pandemic, the Australian Government has announced several initiatives to assist individuals and businesses through these trying times.
Whilst this is not an exhaustive list of the measures the Government is initiating, we will take you through some of the more relevant programs for our clients. It is also important to note that at time of publishing, these proposed measures are yet to be legislated so, we cannot guarantee these details are correct or final.
We will take you through each of the following changes so you know which incentives you may be eligible for.
For businesses, these are the new initiatives:
- Business Cashflow Assistance
- For businesses with employees
- For businesses with apprentices/trainees
- Instant Asset Write Off (IAWO) increase
- Backing Business Investment
- Other Business Support
For individuals, you could be eligible for:
- House Hold Stimulus payment
Business Cashflow Assistance – boosting cashflow for employers
Facts:
- Eligible businesses could receive 50% of their employees’ withheld tax payments back.
- This would be received in the form of a credit on your Activity Statements (either monthly or quarterly) between March and June 2020.
- The maximum Activity Statement credit is $25,000 over this period.
- To be eligible, your annual turnover must be LESS than $50 million and have employees (sole traders may not qualify).
- If you do not meet the tax threshold for tax withheld, you would receive a credit of $2,000 on your activity statement over the period.
The aim of this assistance package is to support cashflow challenges faced by businesses; more specifically to allow businesses to retain their employees and continue to pay their wages.
For more information on the proposed Cashflow Assistance for employers, see this fact sheet from the ATO.
Business Cashflow Assistance – supporting apprentices and trainees
Facts:
- Eligible businesses could apply to receive 50% of their apprentices/trainee’s wages back.
- This will be received as a reimbursement, accessible after an assessment.
- The maximum reimbursement amount is $21,000 per apprentice/trainee for their employment period between the claimable dates.
- The total claimable period is between January 1st and 30th September 2020. The apprentice/trainee must be with your business as of March 1st, 2020 to qualify.
- To be eligible, you must have less than 20 full-time apprentices/trainees.
This assistance will assist small businesses in retaining their apprentices/trainee’s over difficult months ahead. If there is no opportunity to retain your apprentices/trainees, there is support in place to organise re-employment of those individuals.
For more information on the proposed Apprentice/Trainee Support assistance, see this fact sheet from the ATO.
Instant Asset Write Off increase (IAWO)
Facts:
- Eligible businesses will be able to claim immediate deductions on their annual turnover for assets purchase for ~$150,000 or less (the cap for vehicle purchases could be limited to a maximum of $57,581)
- This IAWO increase is in effect from now until June 30th, 2020 for assets first used or installed by the end date.
- This deduction will be claimable per asset (i.e. you can write off multiple assets at $150,000 each)
- To be eligible your business must have an annual turnover of less than $500 Million.
- This will result in a lower payable tax amount at the end of the 2019/2020 financial year.
This IAWO increase will back businesses to invest in the economy to help recover from the economic impact of COVID-19.
For more information on the proposed IAWO increase, see this fact sheet from the ATO.
Backing Business Investments
Facts:
- Eligible businesses may be able to claim an extra depreciation deduction of 50% of an asset’s costs, on top of the standard 30% depreciation, in the first year.
- This will result in a tax benefit over the life of the asset, as well as provide better cash flow.
- This applies to assets purchased & first used/installed between now and June 30th, 2021.
- To be eligible your business must have an annual turnover of less than $500 Million.
This accelerated depreciation deduction scheme will allow businesses to purchase equipment, support the economy, and lower taxes over the next financial year.
For more information on the proposed Backing Business Investments scheme, see this fact sheet from the ATO.
Other business-related support
Along with the above-proposed measures, the ATO has also released a list of optional relief support, available to certain businesses facing financial difficulties.
These support options include payment deferrals, GST cycle changes, and credits, Pay As You Go (PAYG) installment variations, and low-interest tax re-payment plans.
Of particular interest is the support offered to PAYG payers. If you pay quarterly PAYG installments, you can lodge a revised activity statement for the March 2020 quarter, to vary your installment payment and potentially claim a refund for payments already made.
For more information about PAYG variations and other relief support options for businesses, visit the ATO website here.
House Hold Stimulus payments
Facts:
- Eligible individuals could receive a ONE-OFF payment of $750 (payment is per person, not per household).
- This would be received as an automatic deposit into your bank account.
- To be eligible, you must hold a certain concession card or receive a certain support payment (for a full list see here).
- You must hold an eligible concession or receive an eligible support payment as of March 12th, 2020 to receive the one-off stimulus payment.
- This one-off stimulus payment will be paid automatically from March 31st, 2020.
- If you are under 22 years of age and do not have employer leave entitlements, you may be eligible for the JobSeeker Payment.
In order to support lower-income Australians, pensioners, and income support recipients, this stimulus payment will be made to assist the increased demand on the economy.
For more information on the proposed House Hold Stimulus payment, see this see here from the ATO.
If you believe you qualify for any of these proposed initiatives summarised above and would like to know more information specific to your situation please contact us and we will be happy to help.
Again, it is also important to note that at the time of publishing, these proposed measures are yet to be legislated so we cannot guarantee they will be enacted according to these details.
There is talk of an additional stimulus package on the agenda and soon to be announced, however, this has not been confirmed at the time of posting this article. As this is passed and comes to fruition, we will update you. You can stay informed here.
