These Government announcements just keep on coming!
PLEASE NOTE - UPDATED 13th APRIL 2020 - Legislation came out from Treasury on Thursday 9th April which includes giving the ATO Commissioner the ability to apply his discretion. The ATO is responsible for administering the law. Given the 'discretion' we are awaiting the ATO's guidance on how they will administer the JobKeeper legislation, this is important! We are hoping this will be provided during the week of April 13th and will give some clarity to the turnover calculations.
Businesses significantly impacted by the coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. THIS INCLUDES SELF-EMPLOYED!!
This assistance will help businesses to keep people in their jobs and re-start when the crisis is over. For employees, this means they can keep their job and earn an income – even if their hours have been cut.
The Government will provide $1,500 per fortnight per employee for up to 6 months.
Need to have a chat? We are business as usual, despite we are all working from home, so we are available via Zoom or phone to discuss:
We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you and plan for what will happen in the weeks and months ahead. Contact us TODAY on (03) 5911 7000 to book in a complimentary 30 minute business continuity plan online meeting so we can discuss your business situation and make plans to assist you.
Please note - Any assistance in relation to the economic stimulus is considered tax planning and will require analysis on our side of your personal situation. We will provide a proposal for fees for these services.
EMPLOYERS - WHAT DO YOU NEED TO DO?
To receive the JobKeeper Payment, employers must:
SOLE TRADERS / SELF EMPLOYED - WHAT DO YOU NEED TO DO?
To receive the JobKeeper Payment,
Payment will be made monthly to the individual’s bank account or the entities bank account if self-employed.
AM I AN ELIGIBLE EMPLOYER?
Eligible employers are those employers (including non-profit entities) with:
Charities that are registered with the ACNC are subject to slightly different rules which look at whether they have experienced a drop in turnover of at least 15%.
Government entities (including wholly owned corporations) at Federal, State, Territory, and local councils are not eligible. Foreign governments and their agencies are also not eligible. Companies in liquidation or a partnership, trust or sole trader in bankruptcy, do not qualify.
See Calculating a reduction in turnover below
ARE MY EMPLOYEES ELIGIBLE?
Eligible employees are employees who:
Employees on parental leave are not able to access the JobKeeper payment if they are receiving Government Paid Parental Leave or Dad and Partner Pay. If they are not receiving these payments they are eligible for JobKeeper payments if they meet the eligibility criteria. An employee will not be eligible if they are receiving support under a workers compensation scheme.
If you employ apprentices or trainees eligible for the 50% wage subsidy, you can potentially receive this subsidy up to 31 March 2020 and
then the JobKeeper payment from 1 April 2020 onwards. Where a small business is eligible for the JobKeeper payment they cannot receive the
apprentice and trainee wage subsidy from 1 April 2020.
SOLE TRADERS AND SELF-EMPLOYED
Sole traders and the self-employed with an ABN will be eligible for the payment if the following conditions are met:
Where the business is operated as a partnership, company or trust the entity can receive JobKeeper payments in relation to one nominated partner, beneficiary, director or shareholder who works in the business.
CALCULATING A REDUCTION IN TURNOVER
Now this is the challenging part for some businesses - stay tuned for our JobKeeper Webinar on Thursday April 16th as we will also provide a checklist and example template
To access the JobKeeper payment, you need to establish that the turnover of your business has reduced by 30% or more (or 50%). Most
businesses will be expected to establish that their turnover has fallen in the relevant month or three month period compared with the same
period from the previous year. Turnover for the JobKeeper payment is assessed in the same way as turnover for GST purposes. This means that
most sales that are connected with Australia will be taken into account, although input taxed supplies such as residential rental income,
interest income, dividends etc will be ignored. Where a business was not in operation a year earlier, or where turnover a year
earlier was not representative of the usual or average turnover, it is expected that the ATO will have some discretion to consider
additional information that the business can provide to establish that it has been adversely affected by the impacts of COVID-19. The ATO
will also have discretion to set out alternative tests that would establish eligibility in specific circumstances.
HOW THE SUPPORT IS CALCULATED
The ATO will administer this program and will make the $1,500 payments based on payroll information (through single touch payroll). The payments will be made monthly in arrears, so it is essential that you ensure your business and your employees continually meet the eligibility criteria. The payment is intended to reimburse the employer for amounts that have already been paid to employees.
JobKeeper employers must, as a minimum, pay the full JobKeeper amount to employees even if the employee is normally paid less than the JobKeeper amount (failing to do so or deliberately misusing the payment may incur penalties of up to $126,000).
That is, the rules require an employer who is eligible for the JobKeeper scheme to ensure the total amount payable to a particular employee in respect of a fortnight is at least the greater of:
The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program runs until 27 September 2020, payments will stop if the employee is no longer employed by the relevant employer.
HOW DOES MY BUSINESS APPLY?
Initially, employers can register their interest in
applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020. Subsequently, eligible employers
will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the
first week of May.
WHAT ARE MY COMPLIANCE OBLIGATIONS?
DO I NEED TO PAY SUPERANNUATION AND WITHHOLD TAXES?
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment. It is not compulsory.
The JobKeeper Payment is a "subsidy" before tax, and therefore if any applicable, taxes may be withheld.
HOW DOES MY BUSINESS GET PAID?
Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
Payments will be made to the employer monthly in arrears by the ATO.
WHEN WILL THE SUBSIDY START?
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.
HOW TO MANAGE THE PROCESS YOURSELF:
Applications are not yet open. However, you should register your intent to apply for the JobKeeper subsidy with the ATO (here). The ATO will provide you with regular updates and advise you when you can lodge your application
2. Assess turnover
3. Identify eligible employees
HOW WILL IT WORK IN MY SOFTWARE?
At this stage I have only heard of Xero is updating their software to accommodate ease of processing, read more here . MYOB has not released anything yet that I am aware of, however a user has posted a workaround option on their community pages
PLEASE NOTE - THE DEVIL IS IN THE DETAIL SO PLEASE JOIN US FOR OUR WEBINAR ON THURSDAY 16TH APRIL, SEE OUR EVENTS PAGE. WE WILL ALSO INCLUDE A RECORDING.
Government Information on the JobKeeper Payment
In the 2019–20 Budget, the government announced that Single Touch Payroll (STP) would be expanded to include additional information.
Throughout March, the ATO sent letters to directors who are potentially in breach of their obligations to ensure that the company they represent has met its PAYG withholding, superannuation guarantee charge, or GST obligations.
It’s a great headline isn’t it? Spend $100 and get a $120 tax deduction. Days after the Federal Budget announcement that businesses will be able to claim a 120% deduction for expenditure on training and technology costs, we started receiving marketing emails encouraging us to spend now to access the deduction.