This update serves to inform and assist you in navigating this changing environment. In recent news:

$10K Emergency Cash Grants Closes 1 June

South Australian small businesses and not-for-profits affected by COVID-19 who have successfully applied for the $10,000 emergency cash grant (State Government’s $650 million Jobs Rescue Package) will have begun receiving their payments.

For those that have not yet applied, time is running out with applications closing on the 1st June, 2020.

To be eligible, your business must:

  • Have an ABN and were carrying on the operation of the business in South Australia on 1 March 2020.
  • Employ people in South Australia.
  • Have annual turnover of more than $75,000 (GST exclusive).
  • Have an annual payroll of less than $1.5 million, and not be entitled to a payroll tax waiver under COVID-19 support measures introduced by the State Government.
  • Have been highly impacted or forced to close due to COVID-19 restrictions.

Applications must be made via the Department of Treasury and Finance website by clicking here https://www.treasury.sa.gov.au/Growing-South-Australia/COVID-19/$10,000-emergency-cash-grants-for-small-businesses

Expanded Instant Asset Write-Off Ends 30 June 

A reminder that there is just weeks left to make the most of the government’s increased instant asset write-off offer (five times the usual amount).

The government announced in March it is injecting $700 million to increase the instant asset write-off from $30,000 to $150,000, with the aim to encourage more businesses to buy big-ticket items such as cars and equipment.

Access to the write-off has also be expanded to include businesses with aggregated annual turnover of less than $500 million, up from $50 million.

The $150,000 threshold applies for a limited time only for depreciating assets first used or installed ready for use between 12 March 2020 and 30 June 2020.

JobKeeper – The ATO Ruling to Ease Turnover Projection ‘Predicament’

Businesses reluctant to enrol in the JobKeeper scheme due to uncertainty over their projected turnover calculations have been afforded some comfort by the ATO’s latest ruling.

Acknowledging that for many businesses projecting monthly turnover is hard at the best of times, the ATO’s recent ruling may bring some comfort to those who are fretting over their projected GST turnover.

In the ruling, the ATO notes that the commissioner’s compliance approach will allow for some tolerance around projection predictions. “If it later eventuates that your actual turnover for your turnover test period is greater than your prediction of your projected turnover, you do not lose access to the JobKeeper scheme,” the ATO ruling said.

“The commissioner will accept your assessment of these turnovers, unless he has reason to believe that your calculation of your projected GST turnover was not reasonable.” “Keeping good records… explaining how you undertook the calculation will be necessary to show how you took reasonable steps.”

A significant difference between the actual turnover and the projected turnover may trigger an enquiry from the ATO.

Note: * You have until 31 May to enrol for JobKeeper if you intend to claim for the JobKeeper fortnights in April and May.

JobKeeper – The Monthly Business Declaration

We are getting a number of calls regarding the purpose of the JobKeeper’s monthly business declaration.

To clarify, businesses only have to prove their eligibility once at the point of enrolment, with the monthly business declaration not a retest of eligibility.

Rather, the declaration will be used to track how a business is progressing under the JobKeeper scheme and will inform statistical data for the ATO in understanding how the scheme is playing out.

Tax Reform

Delivering an economic update in place of what was due to be the federal budget, on Tuesday night, Treasurer Josh Frydenberg confirmed that gross domestic product (GDP) was expected to fall more than 10 per cent in the June quarter, representing the biggest fall on record.

While the economic data is ‘sobering’ to say the least, the government will be forced to look at a much needed overhaul of the tax system (and swiftly) if it is to encourage growth.

“The proven path for paying back debt is not through higher taxes, which curtails aspiration and investment, but by growing the economy through productivity-enhancing reforms,” Mr Frydenberg said.

“Reskilling and upskilling the workforce; maintaining our $100 billion, 10-year infrastructure pipeline; cutting red tape to reduce the cost burden on businesses and the economy; and tax and industrial relations reform as a means of increasing our competitiveness.”

We both welcome and expect that a reinvigorated economic reform agenda will likely be the key focus of the October Budget.

If you have any questions or require further details regarding any of the information included in this update, please do not hesitate to contact us.