Tag Archives: SOLE TRADER

Small Business and Payroll Tax Support
The NSW government is supporting businesses who are experiencing financial distress as a result of COVID-19 with a new support measures. The table below outlines the various packages available depending on your circumstances. For the Small Business Support Grant evidence may be required to support your eligibility including BAS information and a letter from an accountant. For payroll tax the deferral arrangements are still being completed however we will advise you when the details are released. We ask that you prepare supporting document in preparation and as always or partners and managers are ready to assist.

Small Business Support Grant
The NSW small business COVID-19 support grant of up to $10,000 is available to eligible NSW small business owners.

Available Funding – Grant amount is up to $10,000

Eligible Criteria:

  • Must have between 1-19 employees and an annual turnover of more than $75,000
  • Must have total Australian wages below the NSW Government 2019-20 payroll tax threshold of $900,000
  • Must have an Australian Business Number as at 1 March 2020, are based in NSW and employ staff as at 1 March 2020
  • Are highly impacted by the Public Health (Covid-19 Restrictions on Gathering and Movement) (see list on further reading link below) by the NSW Government Shutdown Restrictions defined as a decline in turnover of 75 per cent compared to the equivalent period (of at least two weeks) in 2019; and
  • Have unavoidable business costs not otherwise the subject of other NSW and Commonwealth Government financial assistance measures. Such as utilities, overheads, legal costs and financial advice, more examples can be found in further reading link below.

Assistance Delivery Method – $10,000 Cash Grant

How funding may be used – Grant must only be spent on unavoidable business expenses for which no other government support is available.

Evidence in support of eligibility

  • Must certify to the administrating agency that business meets the Eligibility criteria
  • Must provide a Business Activity Statement (BAS) to demonstrate that the business has an annual turnover of $75,000
  • Must lodge supporting documents as may be required to demonstrate that they meet the eligibility criteria
  • For small businesses that are not on the list of highly impacted industries, a letter from an accountant confirming the decline in turnover will be required

Additional information can be found on the Service NSW website.

Payroll tax relief for businesses with grouped Australian wages of no more than $10 million
Businesses whose total grouped Australian wages for the 2019/20 financial year are no more than $10 million will have their annual tax liability reduced by 25% when they lodge their annual reconciliation, which is due on 28 July. For businesses who lodge and pay monthly and whose total Australian wages will be no more than $10 million for the current financial year, no payment for the months of March, April or May 2020 will be required. Businesses will also have the option of deferring these payments for an additional three months. When lodging your annual reconciliation, you will still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax you would have had to pay for 2019-20.

NSW Payroll Tax Relief

Available Funding – Annual tax liability reduced by 25%

Eligible Criteria

  • Total grouped Australian wages of no more than $10 million
  • Be paying NSW Payroll Tax

Assistance Delivery Method

  • Businesses who lodge and pay monthly, no payment for the months of March, April or May 2020 will be required
  • Businesses will also have the option of deferring these payments for an additional three months
  • When lodging your annual reconciliation, businesses still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax you would have had to pay for 2019-20

How funding may be used – To reduce 2019/2020 Payroll tax liability

Evidence in support of eligibility – 2019/2020 Payroll Tax Reconciliation

Additional information can be found on the Revenue NSW website.

Payroll tax deferral arrangements for businesses with total grouped Australian wages over $10 million
Businesses whose total grouped Australian wages for the 2019/20 financial year are over $10 million, will have the option of deferring the payment of payroll tax for up to six months. These businesses will not need to make their payment for the March period, normally due on 7 April 2020.

NSW Payroll Tax Deferral

Available Funding – Option of deferring the payment of payroll tax for up to six months

Eligible Criteria

  • Total grouped Australian wages over $10 million
  • Be paying NSW Payroll Tax

Assistance Delivery Method

  • Businesses have the option of deferring the payment of payroll tax for up to six months
  • Businesses will not need to make their payment for the March period, normally due on 7 April 2020.

How funding may be used – To defer 2019/2020 Payroll tax liability

Evidence in support of eligibility – 2019/2020 Payroll Tax Reconciliation

Further information – Payroll Tax Deferral
More information regarding the deferral arrangement will be released in the upcoming days.

Please review the information provided in the Government links provided above. If you have any questions, please contact your Partner or Manager.

JobKeeper Payment: Enrolment Reminder

From 20 April 2020 you need to enrol for JobKeeper by either using the Business Portal and authenticate with myGovID or have enrolment processed by a tax professional through the online tax agent portal.

* If you require our assistance please contact the firm to request the enrolment of your business. *

As per previous email correspondence  you should have completed items numbers 1 to 4 below. If not, please do so as a matter of urgency.

  1. Check if you, as an employer, and their nominated employees meet the eligibility requirements.
  2. Notify eligible employees that you (their employer) intend to participate in the JobKeeper scheme.
  3. Send eligible employees the JobKeeper Employee Nomination Notice to complete and return to you to confirm that they agree to you being nominated as the employer to receive JobKeeper Payments.
  4. Keep the Employee Nomination Notice Form on file for five years.

IMPORTANT NOTE: If you want to undertake the Job Keeper process yourself you need to have access to the business portal via myGovID.

We will be offering our services on a do and charge basis depending on the complexity of your personal situation. More information can be obtained from your partner or manager.

Last week the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and the Rules were passed by parliament.

This Act and the accompanying rules with explanatory memorandum encapsulates the rules for receiving the JobKeeper payment.

Light reading can be found here: https://www.legislation.gov.au/Details/F2020L00419

The JobKeeper payment requires an application to the ATO. The ATO application is almost ready.

The ATO have provided a link to register your interest in the JobKeeper payment (LINK BELOW), so the ATO can contact you when applications are ready.
The ATO have furthermore updated their website to include the most recent developments.

The Link is here: https://www.ato.gov.au/general/JobKeeper-Payment/

What to do next….

If you would like Economos to handle to JobKeeper matter for you:

  • Please let us know ASAP that you want us to assist you with the matter
  • There will be an administrative fee for any applications and ongoing reporting made on your behalf

If you would like to look after the JobKeeper matter yourself:

Due to the matter above being time critical, you may receive numerous, similar emails from our office.

Underneath some quick discussion points from an initial reading of the legislation and explanatory memorandum:

  1. Businesses need to understand Jobkeeper in fortnights. Each of the following is a “JobKeeper fortnight”:
    i) the fortnight beginning on 30 March 2020; and
    ii) each subsequent fortnight, ending with the fortnight ending on 27 September 2020.

Admin process

  1. Businesses need to nominate to participate (with the ATO)
  2. Employees need to respond in writing to employers that they agree to be nominated to participate (this response does not need to be sent to ATO)
  3. Once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme. The employer cannot select which eligible employees will participate in the scheme. This ‘one in, all in’ rule is a key feature of the scheme
  4. qualifying employers that decide to participate in the JobKeeper scheme must, as a condition of entitlement, notify all employees in writing that they have elected to participate in the scheme and that their eligible employees will all be covered by the scheme (if the employee so agrees).
  5. The nomination requirements in subsection 9(3) of the Rules require an employee to provide a notice in the approved form to their employer agreeing to be nominated by the employer for the purposes of the JobKeeper scheme:  The employee:
    • Agrees to be nominated by the employer as an eligible employee under the JobKeeper scheme as the employer with which the employee will participate in the JobKeeper scheme;
    • that they confirm they have not agreed to be nominated by another employer; and
    • that they do not have permanent employment with another employer if they are employed as a casual employee with this employer.

The required wording and forms are available on ATO.gov.au

Turnover Test

  1. Once an entity satisfies the Turnover test in March or April it does not need to retest its turnover in later months.
  2. The Test periods for the turnover test being compared by can be periods of one month or three months (if three months, then those Quarters reporting periods begin 1 April 2020, and 1 July 2020)
  3. An alternative decline in turnover test applies if there is not an appropriate relevant comparison period in 2019. This might be the case for a new business, started for example in January 2020 or a business that made a major business acquisition in 2020.

Components of the $1500

  1. The component amounts that together must equal or exceed $1,500 are
    i) salary and wages
    ii) PAYG WHT
    iii) super contributions
    iv) Salary sacrifice
  2. The requirement that the component amounts be at least $1,500 applies regardless of whether the employee ordinarily receives more or less than that amount.
  3. If an employer’s ordinary arrangement is to pay its employees less frequently than fortnightly, then the payment can be allocated between fortnights in a reasonable manner.
  4. There are timing rules.  Where the employer wishes to participate in the scheme and receive the first or second JobKeeper payment (relating to the JobKeeper fortnights commencing on 30 March 2020 and 13 April 2020 respectively the employer has until the end of the second JobKeeper fortnight, that is, 26 April 2020, to provide the Commissioner with its election to participate;

Eligibility

  1. A business owner is entitled to participate even if they are not an “employee”
    i) Sole trader
    ii) Beneficiary of a trust
    iii) Director or shareholder of company
    iv) Partner in a partnership
    The individual must be actively engaged in the business
  2. Under s.16 of the ACT participation in the JK scheme requires monthly reporting
  3. The Jobkeeper scheme effectively ceases after the last Jobkeeper fortnight – after 27 September 2020.

But importantly please register your interest and please explicitly advise if you wish us to register for you and maintain reporting (fees will apply).