S & H Tax Accountants

Category: COVID-19

  • COVID-19 Business Update – 15 July 2020

    Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.

    Tightening restrictions as COVID-19 cases top 10,000

    Restrictions have tightened back up in some states in an attempt to contain a fresh outbreak of COVID-19 in the country’s southeast, which pushed the total number of cases in the country beyond 10,000. While Australia has avoided the high number of COVID-19 casualties of other nations through strict measures, an increase in community-transmitted cases in Victoria and new cases in New South Wales is a cause for action.

    South Australia cancelled plans to reopen its border to New South Wales on July 20, while Queensland introduced a mandatory two-week quarantine for those who have visited two areas in Sydney’s western suburbs.

    COVID-19 Restrictions Guide for Each State

    Since the government announced a three-stage plan in May to ease restrictions across the country, Australians have been slowly emerging from COVID-19 lockdowns. However, from midnight on 8 July, the Melbourne and Mitchell shire returned to stage three lockdown for six weeks.

    As COVID-19 restrictions vary across the different parts of Australia, it can get confusing for some. This guide will help you navigate through lockdown rules, including how far you can travel, what types of businesses are open, and guidelines on social gatherings for each state.

    Australian Made and eBay Partner Up to Grow Aussie Brands Online

    Australian Made and eBay have partnered to support local manufacturers grow their online business through a dedicated ‘Australian Made on eBay’ hub. This will allow eBay Australian small- and medium-sized businesses the opportunity to be discovered by 174 million international customers. The hub will feature accredited products across a range of categories, including fashion, health, beauty, automotive, and home and garden.

    With the return to lockdown conditions in some parts of Australia, online sales will likely continue to be increasingly important throughout the remainder of 2020. If you want to re-evaluate your business model and strategy, don’t hesitate to get in touch with us for more personalised business advice.

    Payment summaries have changed

    Last year’s introduction of Single Touch Payroll (STP) means that tax time this year will be a little different.

    Employers are now required to report pays, taxes and superannuation information directly to the ATO each payday through STP.

    Employers that do report this way will not have to give you a payment summary as they usually would at this time of year. Instead, employees will get an end-of-year income statement in ATO online services through myGov.

    All employers will eventually report in this manner.

    Employers that do not report to the ATO in this way will still need to provide a payment summary at the end of financial year.

    ATO Tax Time Toolkit

    The ATO’s Tax Time Toolkit has some useful guides for small businesses on topics such as: home-based business expenses, motor vehicle expenses, travel expenses and pausing or permanently closing your business due to Coronavirus. Ask us if you have any questions.

    Boosting Your Digital Capabilities

    Small businesses across Australia can access individual support to grow their digital capabilities through the Australian Small Business Advisory Services Digital Solutions. This program offers small businesses with fewer than 20 full-time employees and sole traders with high quality advice on a range of digital solutions to meet their business needs at a subsidised rate. More information can be found here.

    Running a business in a post-pandemic world

    They say the worst of times can bring out the best in people– and this is also true for businesses. Last week, we put businesses showing resilience in the face of adversity in the spotlight, and shared the creative ways they serve their customers and communities amid the COVID-19 crisis.

    This week, we talk about the hallmarks of an organisation designed for speed, as outlined by McKinsey & Company (see page 40). Below is a list of characteristics of operating models they’ve identified that result in faster speed to market, increased customer responsiveness, greater efficiency, and enhanced employee satisfaction. These characteristics will help companies stay competitive in the post-pandemic business environment:

    • Flatter organisations with less hierarchy and streamlined decision rights
    • Faster information flows and decision-making, powered by embedded data and analytics
      • As number-crunchers – we love this one!
    • Cross-functional teams collaborating to tackle common missions through test-and-learn approach
    • Flexible ways of working, including affinity for hybrid remote/ in-person teams
    • Dynamic allocation of talent deployed against mission-critical priorities
    • Agile, resilient talent able to move fast, adapt to change, and continuously learn

    This Forbes article also shares tips on how to future-proof your business for a post-pandemic workplace, including:

    • Making flexibility as a core benefit
    • Upgrading equipment and investing in technology
    • Prioritising employee health and wellness
    • Increasing communication
    • Investing in management development
    • Creating a sustainable company culture

    The future of businesses will no longer be determined by what has worked, but instead, what will work in the post-pandemic world. While the “when” and “how” of the end of the pandemic remain unknown, reimagining your organisation and re-evaluating the way you work can help you rise to the occasion and lead your business as the “new normal” we hear so much about takes shape.

    If you want to talk about your specific situation, please get in touch with us and we’ll help you work out a strategic plan.

    Second Round of Cash Flow Boosts

    If your business has received initial cash flow boosts, you’ll automatically receive additional cash flow boosts when you lodge your activity statements for each monthly or quarterly period from June to September 2020. The amount will be equal to the total amount of initial cash flow boosts you received and will be split in either two or four installments, depending on your reporting period.

    If you lodge:

    • quarterly – you will receive 50% of your total initial cash flow boosts for each activity statement
    • monthly – you will receive 25% of your total initial cash flow boosts for each activity statement

    You can find more information here, or alternatively, you may contact us if you have a question.

    State grants and support programs

    Along with national assistance, each state and territory has announced various grants and assistance packages which you may be eligible for. You can find a roundup of these grants on the Government’s Business website. Alternatively, you can also contact us so we can discuss which options are most suitable for your business.

    Minimum Wage Increase

    The Fair Work Commission has announced a 1.75% increase to minimum wages. This will apply to all award wages and the increase will start on 3 different dates for different groups.

    You can find the complete list of awards in each group here.

    For those not covered by an award, the new national minimum wage will be $753.80 per week or $19.84 per hour. This applies from the first full pay period starting on or after 1 July 2020. If you’re not sure which award applies or if you have any questions, get in touch with us.

    Instant Asset Write-Off Expanded

    The Instant Asset Write-off has been extended to 31 December 2020, which means Australian businesses with less than $500 million annual turnover will have more time to take advantage of the write-off and invest in assets to support their business. This government initiative is designed to help the economy reopen and boost economic growth. The instant asset write-off applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided they each cost less than $150,000.

    Contact us so we can walk you through the different thresholds, exclusions, and limits.

    COVID-19 Safety Guidelines

    SafeWork Australia has put together useful guidelines for a range of industries. The guidelines provide clarification on WHS laws, workers’ rights, risk assessments, hygiene, emergency plans and more.

    What’s next?

    We’ll keep you updated if anything changes but now we’ll shift to helping you get a plan in place for the future. Please get in touch to discuss what’s next for your business.

  • Do you have more questions this tax time?

    What a year!

    We don’t need to tell you that this year has been “unprecedented”. With so many stimulus packages, support programs, tax changes and business shutdowns this financial year is set to be like we’ve never seen before.

    First and foremost we appreciate your support and patience as we continue to wade through those programs and what they mean for business owners and individuals.

    Have a question?

    We also understand that most people are more questions than normal this year and we want to let you know that we’re here to help. Some of the questions we’ve been getting recently include:

    • Do I have to pay tax on JobKeeper
    • What can I claim when I’m working from home
    • My business has to shutdown again and I’m worried about cash – what can I do?

    If you have any questions at all this financial year (or down the track), please don’t hesitate to get in touch.

    Wishing you all the best in the coming months.

  • How your business can thrive even in a recession

    The pains caused by a recession can be excruciating, which is why most of us dread the thought of it.

    A recession can mean massive layoffs, jobs becoming harder to find, and wages frozen, which means consumers hunker down and spend less– often worsening the economic slowdown unknowingly.

    For most businesses, especially small businesses, recessions can be brutal. Just take for example, the Global Financial Crisis (GFC) that struck the world in 2008. Between December 2008 and December 2010, approximately 1.8 million small businesses shut down. When Investopedia looked into the impact of the financial crisis on small businesses after a decade, they found out that business creation has not yet returned to pre-crisis levels.

    And now, as the battle against COVID-19 is far from over, global financial markets have been impacted, consumers are tightening their belts, and general demand is falling. All these signs are pointing to one thing: the next economic downturn may just be right around the corner.

    Don’t get us wrong, we are not here to scare you. Our hope is for you to build a successful, future-proof business. That means you need to be aware of the possibility of another recession so you can prepare effectively.

    In this article, we have tips to help you not just survive a recession, but thrive. Get in touch with us and we’ll chat about your specific situation.

    Stay Close to Your Numbers

    Without a crystal clear picture of your business’ financial health, you will not be able to create an effective strategy that will help you weather this major business challenge. By making the effort to understand your financials, including your revenue, expenses, profits, and cashflow numbers, you will be able to plan accordingly.

    Check in with us and we’ll help you review your cashflow forecasts. These forecasts will help you conduct best, moderate, and worst-case scenario planning. Doing this will help you make sound business decisions that are based on updated financial data, rather than being driven by emotion, intuition or just guessing!

    Improve Your Cashflow

    Cashflow is the lifeblood of your business, and ideally, you should be bringing in more income than the amount you are spending to sustain your business. However, before you can improve your cashflow, you must first ensure that you have accurate financial records and an effective accounting system in place.

    Once you have these sorted out, it will be easier for you to take control of your cash position through:

    • Payments from clients– timely invoicing, chasing payments, and offering to restructure overdue payments
    • Reducing your expenses by reviewing software subscriptions, renegotiating terms with your suppliers and lenders
    • Secure financing from government stimulus funds, take on investors, or get short-term financing. However, if you are thinking about incurring debt during a recession, we would highly recommend consulting with your accountant or financial advisor first.
    • Make extra effort in nurturing your relationship with existing customers
    • Enhance your products and services

    Maintaining, Or Even Better, Growing Your Customer Base

    If you want your business to thrive during a recession, you likely need to grow your customer base. One way to do this is by digging deeper on your target market and coming up with ways on how you can tweak your offers to entice them into buying from you even during tough economic conditions. You should also research your competitors, identify your point of difference and plan how you will communicate those selling points to interested customers.

    We understand that getting more clients during a time like this is easier said than done, but what many business owners fail to realise is the fact that their existing customers are often their best opportunity to make more sales. Keep your customers happy, identify how you can add more value into their lives, and reach out to them to take advantage of untapped sales opportunities.

    Focus On Your Strengths

    The concept of “diversification” is usually taken in the wrong way. Simply adding a host of different products and services to your offerings will not magically transform your business. In fact, it may be a waste of time and resources and stop you from focusing on the things that you do best.

    During an economic downturn, you should re-evaluate your existing products or services, and focus on your key strengths or core competencies. If you’re selling physical products, this is also the perfect time to re-evaluate your inventory management and adjust based on the products that you would want to focus on. Don’t ignore the potential of reducing your inventory costs by only ordering the items and the right amount that you need.

    Improve Your Marketing Efforts

    One of the most common mistakes of business owners is that whenever they need to minimise their expenses, they automatically cut their marketing budget or even re-allocate it entirely.

    Marketing and sales go hand-in-hand. So if you want to keep a healthy flow of sales coming in, you need to have strong marketing as well.

    In today’s fast-paced world where consumers are restless, and during a recession where they will become even more careful in their buying decisions, marketing is your tool to help them find and see your products and services as the best options in the market. So instead of quitting marketing, now is the right time to step up your marketing efforts.

    Don’t be Afraid to Play Offence

    Those who go full survival mode and simply limp through the recession will be much slower to recover and have a lower chance of catching up.

    Secure your cash reserves and know when is the right time to play offence. Think about ways to innovate your products and services, streamline your operations to boost efficiencies, expand your market share by improving your offerings to be 10 times better than your competition, and consider mergers and acquisitions.

    There is No Fool-Proof Way

    There is no ‘magic bullet’ when it comes to business, but these tips can make a difference in how you’ll navigate these difficult times.

    In the business world, ups and downs are normal and growth stalls due to cyclical reasons are inevitable. At the end of the day, thriving in a recession boils down to having exceptional industry expertise, getting better business visibility, implementing efficient processes and best practices, as well as having a business advisor who can provide you with expert guidance, fresh insights, and timely advice.

    What’s next for your business? Get in touch with us and we’ll help you work out a strategic plan.

    In the mean time use the following business plan Diagnostic to start. Call us today to book on 0387595532

    Business Plan Diagnostic

     

  • COVID-19 Business Update – 17 June 2020

    Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.

    Instant Asset Write-Off Extended

    Last week, it was announced that the Instant Asset Write-off has been extended for six months to 31 December 2020. Australian businesses with less than $500 million annual turnover will be able to take advantage of the write-off and invest in assets to support their business. This government initiative is designed to help the economy reopen and boost economic growth. The instant asset write-off applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided they each cost less than $150,000.

    You can find more information on which assets can you claim as an immediate deduction here, or contact us so we can walk you through the different thresholds, exclusions, and limits.

    Grant checker

    The business.gov.au website has a useful tool for finding grants, funding and support programs that you might be eligible for. Check out the tool online.

    COVID-19 Relief and Recovery Fund

    The Australian Government has set aside $1 billion to support regions and communities disproportionately affected by the economic impacts of coronavirus. Support is extended to these industries:

    • tourism
    • aviation and transport
    • agriculture and fisheries
    • education
    • the arts

    You can find more details here but feel free to chat to us and we can find the right support for you.

    Free Financial Counselling for regional businesses

    The Government has committed $4.7 million to provide small regional businesses affected by COVID-19 with access to free financial counselling. You can learn more about the assistance for affected regions, communities and industries here.

    COVID-19 Safety Guidelines

    SafeWork Australia has put together useful guidelines for a range of industries. The guidelines provide clarification on WHS laws, workers’ rights, risk assessments, hygiene, emergency plans and more.

    HomeBuilder Grant

    The Australian Government has recently announced the new HomeBuilder initiative, which is a time-limited, tax-free grant program to support the residential construction industry get through the pandemic. The $25,000 grant is available to eligible owner-occupiers (including first home buyers) to build a new home or substantially renovate an existing home. You will be able to apply for the HomeBuilder when your state or territory government signs the agreement. Further information will be announced in due course.

    Updates on JobKeeper Payments and Declarations

    JobKeeper payments will cease from 20 July for employees of a child care subsidy approved service and for sole traders operating a child care service. You can check the media release here.

    Also, monthly JobKeeper declarations now need to be completed before the 14th of the month, which gives you a little more time to lodge.

    What’s your Break-Even Point?

    Whatever type of business you have, calculating your break-even point is important. It tells you the amount of revenue you need to generate to cover your fixed and variable expenses. If you are not a finance or math person, don’t stress! This FREE Break-even Calculator we created will make your analysis fast and easy.

    If you need expert advice on the financial aspects of your business, especially on how you can become more profitable, please get in touch so we can help you plan your next big steps.

    What’s next?

    Over the last few weeks we’ve brought you updates on various government initiatives and cashflow schemes to help businesses impacted by COVID-19. We’ll keep you updated if anything changes but now we’ll shift to helping you get a plan in place for the future. Please get in touch to discuss what’s next for your business. S & H Tax accountants offer small business advice to business owners around Cranbourne and srounding suburbs.

  • Battling Through COVID-19: Finance Tips for Business Survival

    Battling Through COVID-19: Finance Tips for Business Survival

    We’ve heard this before: the COVID-19 pandemic is an unprecedented global health and financial crisis that has caught many off guard. While the threats to human life are very real, the damage to the health of businesses is really just starting to show.

    The seriousness of the disease and the lack of a vaccine (at the time of writing this) have prompted governments around the world to impose strict measures to contain the virus. These restrictions in people’s movements and the temporary shutting down of non-essential services have definitely taken a toll on businesses.

    While there has been a lot of talk on how to avoid contracting the virus and how businesses can operate safely to adapt to the current conditions, this article will focus on helping you manage the financial aspects of your business to survive COVID-19. Read on for our tips on cushioning the impact on your business.

    Update your financial records.

    The first step in planning your course of action in such a difficult environment is getting a crystal clear understanding of the financial position of your business– this means updating your financial records and keeping them in order. Knowing things such as your cash position and assets that can be sold quickly will go a long way in helping you make informed business decisions. Good records build a solid foundation for a successful business. They’re also really important when applying for government grants.

    Examine the financial health of your business.

    Following on from the first item, it is important to get a good grasp of your business’ current financial health through a careful analysis of your books and statements. By looking at key financial figures, you will get an idea of how your business is doing. You can see fundamental factors such as the liquidity and solvency of your business which will help you decide on the best steps forward as you deal with the crisis and the aftermath. Chat to us for help with these financial pieces.

    Improve your cash flow.

    A lot of businesses across the world are facing cash flow problems at the moment. You are certainly not alone. However, the key here is not letting the problem worsen.

    Preparing a cash flow forecast should give you some forewarning before issues even arise and will allow you to address them early on. By quantifying your forward bookings, forward orders, and work in progress, you will get to identify future cash flow and plan accordingly.

    You can also take the following measures to boost your cash flow:

    • Identifying the demand for your products or services, so you’ll know where to focus on and where you can reduce stock orders
    • Cutting back on unnecessary expenses
    • Urging your debtors to pay you, negotiating on a payment scheme that will work for both of you
    • Seeking payment extensions or debt re-structuring
    • Invoicing as soon as you deliver the product or service
    • Seeking external investors or lenders
    • Taking advantage of financial support from your government

    Increase online sales where possible.

    With the government implementing stricter restrictions to prevent the further spread of the virus, you should find ways to move your products and services online – if you can – and continue to serve existing and new clients. The situation that we are in is forcing business owners to re-imagine their business and re-evaluate their business models. You’ve got to adapt and be resilient. It’s those businesses that will survive.

    Manage Your Financials

    It’s safe to say not many of us factored a global pandemic into our 2020 business plans. Although there is no foolproof strategy to get through what’s proving to be a turbulent 2020, the finance tips shared here should be able to give you some guidance on minimising the risks on your small business.

    Want some more help? Our team of advisors love to help businesses. We’ll help you develop a plan to weather the headwinds of the coming months, while saving you time and money along the way. Contact us today and we’ll work through it together.

  • Instant Asset Write-Off Extended

    Good news!

    This week the government announced that the Instant Asset Write-off has been extended for six months, taking the initiative to 31 December 2020. Australian businesses with less than $500 million annual turnover will be able to take advantage of the write-off and invest in assets to support their business. This government initiative is designed to help the economy reopen and boost economic growth. The instant asset write-off applies on a per asset basis, so eligible businesses can immediately write-off multiple assets provided they each cost less than $150,000.

    The instant asset write-off can be used for:

    • multiple assets as long as the cost of each individual asset is less than the relevant threshold
    • new and second-hand assets.

    Changes this year

    From 12 March 2020 now through to 31 December 2020 the instant asset write-off details are below.

    • threshold amount for each asset is $150,000 (up from $30,000)
    • eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million).

    Eligibility

    Your eligibility for the write-off depends on:

    • your aggregated turnover
    • the date you purchased the asset
    • when it was first used or installed ready for use
    • the cost of the asset being less than the threshold ($150,000)

    You can find more information on which assets can you claim as an immediate deduction here. Feel free to contact us so we can walk you through the different thresholds, exclusions, and limits.

    Got a question?

    Please don’t hesitate to get in touch. S & H Tax accountants serve small business in Melbourne. Call us for free consultation now on 1300 724 829

  • COVID-19 Business Update – 27 May 2020

    Welcome back to our Weekly Digest. We hope you and your family are doing well. Read on for this week’s update.

    JobKeeper Key Dates

    The ATO’s website has a list of key dates relevant to JobKeeper which you might find handy. Not-for-profits and charities can find some JobKeeper information here also.

    If you are still wondering if you are eligible, or what schemes apply to you and your business, get in touch with us and we can arrange a chat.

    Cashflow

    If you’re not having cashflow problems right now, that’s great, you’re one of the lucky ones. Plenty of businesses across the country are struggling with cashflow right now. There are a few ways to relieve the cashflow pressure from finance through to restructuring options. Don’t stick your head in the sand – we can help.

    Here are some options that might be suitable for your business:

    • Borrow money – Businesses can access finance quite quickly through the Government’s SME Guarantee Scheme. Under this scheme the Government will guarantee 50% of new loans issued by eligible lenders. Chat to us to find out if this is the best way forward for your business. In addition to lending options, most states are offering business grants which could be worthwhile for you to investigate.
    • Restructure expenses and commitments – You can implement various measures to restructure your expenses and financial commitments. There are a range of programs aimed at providing temporary relief to debtors affected by COVID-19. We can help you work out your existing debt with your banks and creditors to improve your cashflow, so please get in touch.
    • Sell more – Consider new sales possibilities, expand your market, refine your marketing strategy– it may be difficult to increase your sales right now, but we’re sure you’re doing all you can. We can help you get your plan together for the next few months of business.

    JobMaker

    Earlier this week Scott Morrison outlined some preliminary steps in a “JobMaker” plan. The PM’s main point in his address this week was that opening up the economy is much harder than closing it down, and recovery could take years.

    While we have no details of the JobMaker plan yet, the goal is to get Australian businesses out of crisis. The focus will be on industrial relations reform as well as improving the skills and training sector. We’ll keep you updated as more details are announced.

    What’s next?

    Over the last few weeks we’ve brought you updates on various government initiatives and cashflow schemes to help businesses impacted by COVID-19. We’ll keep you updated if anything changes, but please feel free to get in touch to discuss what these schemes mean for your business.

    Get in touch

    We are happy to chat with you about the future of your business. Please get in touch if you would like to chat. S &H Tax Accountants offer Accounting and taxation services in Cranbourne and surrounding suburbs.

  • What to do when reopening your business

    As many business owners look to life after COVID-19, an important question comes up: how do we plan to reopen our business? For most businesses, the easing of restrictions doesn’t mean a return to business as usual. There are rules and regulations in place about how companies can operate, including how many people can be on their premises at one time and how employees must be protected. Customers may not come back quickly and supply chains may still be disrupted.

    Your main goal is to keep your business going after COVID-19, but reopening requires careful planning.
    Here are some tips for restarting your business.

    1. Examine your business model

    The pandemic may have shown you some ways you can pivot your business model to adapt to economic turmoil. Exploring new ways to earn money—such as additional revenue streams—can provide your business with financial stability, and help you be successful.
    Here are some questions to ask:

    • Is my current business model viable following the pandemic?
    • If not, are there ways to adjust my business model?
    • Can my expertise be used to create additional revenue streams?
    • What are current market trends that could affect how I run my business?
    • What are my competitors doing to adapt?

    Many small business owners have expertise that could go into consulting. If you own a restaurant, you could consult with new restaurant owners on setting their menu or hiring staff. You could also create passive income by writing eBooks or running courses related to your specialty.

    There are also new business models you could consider, including having clients or customers pay a monthly retainer or membership fee, selling your products online, or adapting your goods and services based on market trends. Look to businesses similar to yours to see how they’re changing, and how successful their adjustments are.

    2. Have a safety plan and procedures in place

    Given the rules and regulations regarding businesses reopening—to protect client and staff safety—it’s important that you have a safety plan in place, and ensure your teams knows and follows the rules.

    • Be clear about what needs to be disinfected and how often
    • Ensure staff knows about the safety gear they are required to wear and provide it
    • Make sure workers knows about hygiene rules and procedures
    • Train employees on social distancing within your location and post guidance throughout your premises
    • Consider including physical barriers to further protect customers and staff
    • Stagger shifts and appointments if possible
    • Determine if any areas can be repurposed—for example, see if you can use a conference room as an additional waiting room for clients or as office space to keep staff physically separated
    • Talk to your employees about their levels of comfort and their concerns
    • Be willing to adapt based on customer and employee needs

    3. Access funding and financial programs

    Even with restrictions easing, customers may not be eager to return to your business, for a variety of reasons. Many people now have limited incomes and are concerned about safety measures. It could take a while for your income to balance out.

    Local, regional and federal governments have programs available for small businesses. Additionally, financial institutions and local organisations that represent business interests may also have financial programs you can access to help you through the turmoil caused by COVID-19.

    Final thoughts

    Unfortunately for most businesses, the easing of restrictions linked to COVID-19 won’t mean an immediate return to pre-COVID-19 operations. There will be a period of transition in which you may have to make adjustments to your business.

    Evaluating and adapting your business model and strategies, planning for your business to reopen safely, and accessing financial assistance and programs will help during this time.

    What’s next for you and your business? If you’d like to chat about future-proofing your business, please get in touch with our advisors.

  • COVID-19 Business Update – 6 May 2020

    COVID-19 Business Update – 6 May 2020

    In this week’s update, as well as some updates on government support for businesses, we’ve included a number of resources to help with navigating your business out of the dire situation we’ve all been in. No doubt there are still tough times ahead but there are many reasons to be hopeful and we’re here to help you through it all.

    JobKeeper

    The first JobKeeper payments are expected to flow this week.

    JobKeeper Monthly Declaration

    Businesses accepted into the JobKeeper program are required to make monthly declarations to the ATO. This monthly declaration is to update your current and projected GST turnover and reconfirm eligible employees. Businesses need to make these declarations before they receive their payments.

    You can complete the declaration yourself by logging into the Business Portal with your myGovID, but we recommend using a qualified BAS or Tax Agent to assist you. You will need to fill out a consent declaration so this can be completed on your behalf. Ask us if you have any questions.

    Businesses aiming to back in July

    The government announced their goal to get the “overwhelming majority” of Australian businesses back open in July, in a “COVID-19 safe environment.” State and territory leaders will meet again this Friday to discuss the steps to lift restrictions, so we will have more detail then. It is said that cafes, restaurants and retail may be in the first wave of those allowed to reopen. Each state will ease restrictions at its own pace, but all will have the common goal of July. The government issued a reminder that social distancing, hygiene and international travel restrictions will remain indefinitely.

    Economic Update

    According to the Financial Review:

    • 1 million people have lost their jobs in the last 6 weeks
    • Another 5 million are receiving the JobKeeper wage subsidy
    • $7 billion in emergency cash payments has been accessed by 384,000 businesses
    • Treasury data estimates that the current restrictions are costing the economy $4 billion a week.

    Clearly, getting people back to work will help restart the economy which is good news for all of us.

    Time to revisit your business plan

    We’re guessing you didn’t factor and global pandemic and national lockdown into your 2020 business plan!

    So it’s definitely a good time to revisit your business plan for the next year. We know that writing a plan can feel like a big effort so here’s a template to make it easier. Please get in touch if you’d like to talk about your plan – especially the financial parts like cash flow.

    Cashflow

    With little revenue coming in, the old adage “cash is king” is more relevant than ever, and financial uncertainty will likely impact everyone, even those who are making good money. Lifehacker offers up reasons on why you might consider a budget, and why you should be skeptical of the great deals that cash-starved retailers may be pushing. For example, saving $20 on something that costs $100 might seem like a great idea, but you still have to spend $80, and perhaps that $80 could be spent on something more important. Keeping that cash in hand might be more valuable than saving money later.

    Jirav suggests that making a pivot to your business to capitalize on the new ways people are buying during the pandemic can help keep cash coming in the door. This a US article but the tips are great.

    Pivot don’t pause your marketing

    It’s a classic business mistake to cut marketing when cash flow is tight. This often means you’re sealing your fate as without new customers, businesses wither and die.

    This article from MYOB NZ makes some suggestions on how to refocus your marketing for the new economy we suddenly find ourselves part of.

    Is it a good time to hire staff?

    If you’re lucky to have a business in a sector not dramatically affected by the Coronavirus shutdown, it could be the perfect time to hire.

    This article from the Harvard Business Review outlines the opportunity and steps to seize upon it.

    Working from home

    Now that many of us have been working from home for a month or more, the cracks are beginning to show. Zoom meetings all day can be more fatiguing than working in the office all day. Fast Company has these tips to preserve your energy.

    Time for some good news

    Actor John Krasinksi has been running his YouTube segment “Some Good News” for a few weeks now. In a recent episode, astronauts from the International Space Station join in to share some good news, a week before two astronauts returned to earth. You can watch the segment here.

    Here to help

    We’d like to say thank you once again for your continued patience as we are dealing with significantly increased enquiries, especially with schemes like JobKeeper. We’re committed to helping you through the head winds of the next few months. If you have any questions or concerns, don’t hesitate to reach out to us. S & H Tax Accountants are committed to provide the support small business need.

  • JobKeeper + COVID-19 Update

    The COVID-19 pandemic is impacting nearly every aspect of our lives and will be remembered as a pivotal time in history. Like any other event that impacts the world, we don’t know what the future will be like, but we do know that the other side of this will require resilience and creativity from all of us. In the spirit of resilience, we have put together some useful resources to help you.

    JobKeeper

    It’s all we’ve been thinking about lately, so here are some recent updates on the JobKeeper scheme.

    JobKeeper Alternative Eligibility Tests

    Late last week the government announced alternative tests for businesses that don’t meet the basic JobKeeper eligibility test (a 30% decline in turnover). The alternative tests are good news for startups, those who have restructured, been affected by drought or have irregular revenue.

    JobKeeper Deadline Extended

    The ATO has extended the deadline for making JobKeeper payments and top ups to employees for the first two fortnights of April 2020. The time to enrol for the initial JobKeeper periods has been extended from 30 April 2020 until 31 May 2020.

    If you enrol by 31 May you will still be able to claim for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight.

    If you have any questions about JobKeeper, please let us know. We are working hard to help many individuals and business owners through this time. We appreciate your patience and support.

    How can I pay staff while waiting for JobKeeper?

    If you’re worried about finding the money to pay staff while waiting for JobKeeper to be paid by the government, chat to us. We’re not going to advise a ‘one size fits all’ approach, but you may need to speak with your bank to get an arrangement in place. Chat to us first to get some advice around your cashflow.

    Restrictions

    Some state governments have announced plans to slowly start lifting coronavirus restrictions. The relaxed restrictions would potentially allow specific activities to begin again. PM Scott Morrison confirmed no national restrictions would be lifted until at least May 11, when they will measure key statistics.

    It’s still early days but good news that our country has done well to ‘flatten the curve’.

    Are you adapting?

    Businesses that use the Coronavirus setback as an opportunity to adapt, innovate and improve are the ones that will thrive. You may need to modify your offerings, look into offering online services and see what you can do differently.

    We recommend you use this time to do those things you’ve been putting off because you didn’t have enough time. Can you improve some internal processes, conduct staff training, complete that new website project or look at your marketing efforts? How about developing a plan for when you can reopen?

    Time for some good news

    The pandemic has caused many people to adjust. We have seen innovations born out of necessity, such as hands-free door openers and rapid development and manufacturing of ventilators and masks. There’s also interesting news of video gamers being called to help develop COVID-19 treatments.

    Useful resources

    Google is offering $340 million in Ads credits for those who have spent with them in most of 2019.

    Take care of yourself

    We know that this is a hard time. Everyone is throwing words around like “uncertain” and “unprecedented”, while business feels more stressful than ever. Please take time out today to look after yourself. We will get through this.

    S & H Tax accountants offer accounting and tax services to small businesses in Melbourne. THis include accounting service in Cranbourne, Lyndhurst, Lynbrook and Clyde

  • JobKeeper Eligibility Tests

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    The ATO has just released Alternative Tests for the JobKeeper payment which expands eligibility from the initial basic test.

    This is good news for many businesses, particularly startups, those affected by last year’s droughts and those with variable revenues.

    Basic Test

    If you satisfy the eligibility requirements for the basic test, you can ignore the alternative tests below.

    The basic test is satisfied where your projected GST turnover for the period falls short of your current GST turnover for the relevant comparison period, by the specified percentage (generally 30%). We can help you work this out.

    If you don’t meet that test, you may be eligible for the alternative tests below.

    Alternative Test 1 – If your business is less than 12 months old

    This test applies to businesses established less than a year ago. They would not be able to meet the basic test as they cannot show a decline in turnover year-on-year.

    If you started your business before 1 March 2020 and you don’t have the financials to compare against for the same period in 2019, there are some options for you.

    You can use:

    1. Your average monthly current GST turnover, or
    2. Your 3 months current GST turnover if you started before 1 December 2019.

    There are some calculations to do depending on which period you’re using. We can help with this.

    Things to consider
    If your business qualified for the ATO’s 2019-20 bushfire lodgement and payment deferrals, or received any drought help concessions, then you should exclude the months covered by those from your calculations.

    But, if those were the only months you have been in business, you can disregard that, and include them all the same.

    Alternative Test 2 – If turnover has changed significantly due to acquisition or disposal

    A year-on-year comparison doesn’t make sense for a business that went through an acquisition or disposal process between this time last year and now. These businesses can use their current GST turnover for a month.

    Business owners in this situation should use the month directly following the acquisition, disposal or restructure as the comparison period.

    Alternative Test 3 – If turnover has changed significantly due to a restructure

    Similar to the above alternative test, if a business went through a restructure between this time last year and now, they can use their current GST turnover for a month.

    Essentially, if your business is not the same business in that period as it is now, you should use the month directly following the restructure as the comparison period.

    Alternative Test 4 – If your business has seen substantial growth

    This provision is for businesses that saw high-growth in the last 12 months, but have still suffered a decrease because of COVID-19.

    If your business’ turnover grew significantly by:

    • 50% over the last 12 months, or
    • 25% over the last 6 months, or
    • 12.5% over the last 3 months,

    You can use your 3 months current GST turnover.

    Alternative Test 5 – If your business has been affected by drought or natural disaster

    If you conducted business in a declared drought or natural disaster zone, which affected your turnover, you can use your turnover for the same period a year earlier (ie. 2018 instead of 2019).

    This enables a more accurate view of the effect the virus has had on the business.

    Alternative Test 6 – If your business has irregular turnover

    If your business’ turnover is not considered cyclical, you can apply for this test. Businesses will have to prove a significant difference in quarterly turnover.

    Your business is eligible if:

    • Your turnover in the lowest quarter in the last 12 months is 50% or less of your best quarter in the last 12 months, and
    • Your business isn’t considered cyclical.

    A business can calculate an average monthly GST turnover for the 12 months leading up to the test period.

    Again, there are some calculations to do which we are happy to help with.

    Alternative Test 7 – If sole trader or small partnership has been affected by sickness, injury or leave

    This provision is for a sole trader or partnership and with no employees, where you or at least one of the partners couldn’t work for all or part of the comparison period in 2019. This test applies if that leave caused a negative impact on your turnover.

    These businesses can use their current GST turnover for a month. Take the month immediately following the individual’s return to work, and use this as the comparison period.

    Got any questions?

    We encourage you to read through the details we have provided. If you have any questions please get in touch with us. We appreciate your patience as we are working through JobKeeper and other government programs.

    We at S & H Tax accountants are small business accountants in Melbourne. We offer accounting and taxation services in Cranbourne and surrounding suburbs. If you need help with JobKeepr payment then we are here. Contact us on 0387595532

     

  • Ways to run your business if you can’t open your premises

    The COVID-19 pandemic has proven challenging for many small business owners. It’s difficult to run your business remotely, especially if you’re not set up to do so. If you run a business that requires customers or clients to come to you, you might be very concerned about how you can continue to operate without opening your premises.

    If you have access to technology, are adaptable, and are willing to look into financial assistance, you can make it through this pandemic. Here are some ways to keep your business operational through COVID-19.

    1. Offer your services online

    There are many businesses that traditionally require clients or customers to be in-person to receive services. These include businesses such as gyms, dance studios, and retail establishments. If your business relies on customers coming to you, you may be able to use technology to continue with your small business.

    Online meeting programs allow gyms to offer fitness classes and dance studios to continue their lessons with students. Counsellors can use technology to have sessions virtually (just make sure the technology you use is properly encrypted). Some services can be offered via telephone or through email.

    If you own a retail store, consider opening an online storefront so customers can still buy from you.
    Moving online allows you to continue earning a living while helping customers and clients.

    2. Modify your offerings

    Many restaurants, cafes and other food establishments have changed their business to take-away or delivery only. This allows customers to still have the food they love and provides income for the restaurant owner and staff.

    Some restaurants offer curbside pickup of a limited menu, so they aren’t responsible for cooking their full menu every day. You can also offer no-contact delivery by having clients pay online or over the phone with credit card and instructing delivery drivers to leave food by the front door. Let customers know not to answer their door until the driver has left.

    You don’t have to be a restaurant to offer curbside pickup. Retail establishments could allow customers to phone an order and pay for it ahead of time, then deliver the package to the curb when the customer arrives. Some retail outlets offer personal shopping online for local customers.

    3. Find opportunities

    Your small business may provide vaulable services to people who need it during this time.

    Do you run a technology company? You might consider offering online courses in using technology for people who now work remotely. The mindfulness taught during yoga classes might be beneficial for people who are feeling anxious and stressed. Yoga instructors could consider offering yoga or other mindfulness classes online.

    The key to finding opportunities is to be sensitive to people’s emotions. Ask what your customers or clients are worried about about at this time and how you can help them address those concerns, from a distance.

    4. Look into financial assistance

    Many governments and financial institutions around the world are looking at ways to support their small business owners. These include offering grants, subsidies, loan deferrals and other financial programs aimed at small business owners.
    Information about the different programs available to you changes daily, though. If you aren’t sure what financial assistance you’re eligible for, contact us. We’ll help explain your options and help you pick the programs that meet your needs.

    Final thoughts

    COVID-19 has created a great deal of uncertainty for business owners. If you are adaptable, willing to try new technology, able to modify your business and willing to look into financial assistance, you will increase the likelihood that when this pandemic is over your business will still be operational.

    We realise this is a difficult time for everyone, and we are here to help. Please don’t hesitate to get in touch.

  • COVID-19 updates you should know

    8th April 2020

    Rental waivers and deferrals for commercial tenants

    Prime Minister Scott Morrison announced some new measures for landlords and tenants yesterday (Tuesday 7th April). The new mandatory code will apply to tenancies where the tenant or landlord is eligible for the JobKeeper program, which means those that are in financial distress. This code was described to include “good-faith principles” where landlords must not terminate the lease or draw on a tenant’s security and likewise, tenants must honour their lease.

    The PM reinforced the point that landlords and tenants should “sit down and work it out.”

    More details:

    • Landlords will have to reduce leases for businesses affected by Coronavirus.
    • The reduction will have to be in proportion to the reduction in the tenant’s business.
    • Waivers of rent must account for at least 50% of the reduction businesses
    • Deferrals refers to rental payments that need to be paid, but can be put off.
    • Deferrals can be spread over the remaining time on a lease for no less than 24 months.
    • That means if a tenant had 3 months left on a lease, they would still have at least a year to make any deferred rent payments.
    • The PM said landlords that don’t engage with their tenant to work a rent arrangement out would be “forfeiting their rights”.

    It’s clear the PM wants landlords and tenants to work together.

    JobKeeper payment

    Last week the government announced the JobKeeper payment. This is a wage subsidy aimed at helping employers keep paying their employees. Millions of workers across Australia will receive a fortnightly payment of $1500 through their employer. The goal is to help businesses start up quickly once this crisis is over.

    We expect the JobKeeper legislation to be introduced in Parliament today (Wednesday 8th April). Once legislation is passed it will take a few days to receive Royal Assent – the last step in enacting the law – so please give us some time over the Easter break to review it. We encourage you to try to take some time for yourself this Easter as well.

    There are more details and eligibility requirements of course. Please get in touch with us if you have any questions.

    • Employers must apply online, provide information to the ATO on all eligible employees and ensure that those employees receive at least $1500 per fortnight (before tax).
    • There is a maximum period of 6 months, from 30 March 2020.
    • Businesses (including not for profits) must prove their business turnover is estimated to fall by 30% or more.
    • Self-employed individuals will be eligible to receive the JobKeeper payment if they meet the same criteria.

    More information can be found here:

    Deducations for those working from home

    The ATO has created a new Working From Home Shortcut to make it easier for anyone who has to work from home to claim a Tax Deduction based on hours worked from home from 1 March.

    The new arrangement will allow people to claim a rate of 80 cents per hour for their running expenses, rather than needing to calculate costs for specific running expenses. The requirement to have a dedicated working from home area has been removed.

    Please don’t hesitate to reach out to us if you have any questions.

    We at S & H Tax accountants are willing to work with you to receive maximum support from government. We are  small business accountant in Cranbourne.

  • Sometimes we have to say no

    A little note from us

    Our role as advisors is to support small businesses, but we cannot compromise our standards along the way, particularly as the effects of COVID-19 continue to rage on for our clients.

    The Tax Practitioners Board (TPB) together with the ATO recently released a statement as a reminder of the ethical responsibilities of accountants and bookkeepers. The core of their message was that the ATO will not look favourably on businesses who seek to become eligible for grants, loans, benefits or other assistance that they would not ordinarily be entitled to.

    They are reinforcing that you will not be eligible for schemes like the Cash Flow Boost if you are found to become entitled to them when you would not ordinarily be. The statement says “any sudden changes to the characterisation of payments may cause us to investigate.”

    It’s good to remember that the ATO has your information from your activity statements, so it’s best to let things happen as they normally would, and seek only the benefits you’re entitled to. We can help you on that front.

    So, if you come to us asking to change your payroll, increase the amounts you’re paying, register you for PAYG-W have another request, we’re going to ask some questions.

    There’s nothing to worry about if you have a genuine business case for these requests, and we will always talk to you to find out what is best. We just ask you to work with us.

    We are here to support you and want to see you get through this next stage stronger than ever.

    We at S & H Tax Accountants are here to help for you business. If you are looking for a business accountant in Cranbourne then contact us on 0387595532 or book an appointment

     

  • What you can claim when your home is your workplace

    What you can claim when your home is your workplace

    Home, Office

    If you produce assessable income at home, or some of it, and you incur expenses from using that home as your “office” or “workshop”, the ATO will generally allow that a taxpayer could be in a position to be able to claim some expenses and make some deductions. Otherwise the ATO takes the view that expenditure associated with a person’s place of residence is more likely to be of a private nature.

    Deductions may be available from the use of your home to earn income in two circumstances. First, if it is used in connection with your income earning activities but isn’t a place of business (that is, your home is not your principal place of business, but you might do a few hours of work there). The second situation in which you may be able to claim a tax deduction is when the home is also being used as a place of business. The tax implications are different depending on which of these circumstances applies.

    In broad terms, expenses fall into the categories that are listed in the following table.

    Home office expenses you can and can’t claim
    Expenses Home is principal workplace with dedicated work area Home not principal workplace but has dedicated work area You work at home but no dedicated work area
    Running expenses Yes Yes No*
    Work-related phone & internet expenses Yes Yes Yes
    Decline in value of office equipment Yes Yes Yes
    Occupancy expenses Yes No No

    * Generally, an employee who works at home and who does not have a dedicated work area will not be entitled to claim running expenses or their claim for running expenses will be minimal. This is due to the fact that they can only claim the additional running expenses incurred as a result of working from home.

    Running expenses

    You can generally view running expenses as those costs that result from you using facilities in your home to help run the business or home office, so these would include electricity, gas, phone bills and perhaps cleaning costs. But again you can only claim a deduction for the amount of usage from the business or home office, not general household expenses.

    Using your floor area may be an appropriate way of working out some running expenses. For example, if the floor area of your home office or workshop is 10% of the total area of your home, you can claim 10% of heating costs. An alternative can be to compare before and after average usage for each cost. Another possibility is to keep a representative four-week diary to work out a pattern of use for your home work area for the entire financial year.

    Instead of recording actual expenses for heating, cooling or lighting, it may be easier to use the ATO’s “acceptable” rate for these expenses, which is 52 cents per hour based on actual use or an established pattern of use (from 1 July 2018, it was 45 cents before then).

    To use the 52 cents per hour method of claiming, keep a diary to record the amount of time you use your home office for work purposes. The diary must show a representative period of at least four weeks to establish a pattern of use for the whole year.  Remember to always keep these diaries with your tax return paperwork as you may be required to support this deduction should the ATO review your return.

    Communications

    If you use a phone exclusively for business, you can claim a deduction for the phone rental and calls, but not the cost of installing the phone. If you use a phone for both business and private calls, you can claim a deduction for business calls (including from mobile phones) and part of the rental costs.

    You can identify business calls from an itemised phone account. If you do not have an itemised account, you can keep a record for a representative four-week period to work out a pattern of business calls for the entire year. A claim of no more than $50 can be claimed with limited documentations

    If your work use is incidental and you are not claiming a deduction of more than $50 in total, you may make a claim based on the following, without having to analyse your bills:

    • $0.25 for work calls made from your landline
    • $0.75 for work calls made from your mobile
    • $0.10 for text messages sent from your mobile.

    If you have a bundled phone and internet plan, you need to identify your work use for each service over a four-week representative period during the income year. This will allow you to determine your pattern of work use which can then be applied to the full year.

    A reasonable basis to work out your work-related internet use could include:

    • the amount of data downloaded for work as a percentage of the total data downloaded by all members of your household
    • any additional costs incurred as a result of your work-related use – eg if your work-related use results in you exceeding your monthly cap.

    Decline in value

    There are deductions available for a “decline in value” (depreciation) of items such as electrical tools, desks, computers and other electronic devices, as well as for desk, chairs and so on.

    If you use your depreciating asset solely for business purposes, you can claim a full deduction for the decline in value (generally over its “effective life”). Remember however that if you qualify as a small business (ask us what this means) you could immediately write off most depreciating assets that cost less than $20,000 (proposed to increase to $25,000 for a limited period, but this is not law yet). You may also be able to pool most other depreciating assets and claim a deduction for them at a rate of 15% in the first year and 30% thereafter.

    However, if you also use the depreciating asset for non-business purposes, you must reduce the deduction for decline in value by an amount that reflects this non-business use. Talk to this office for more information about claiming depreciation expenses.

    Deductions for occupancy

    Occupancy expenses can only be claimed if you are using your home as a place of business, not just conveniently working from home as a salaried employee.  This means that the ATO expects you to have an area of your home set aside exclusively for business purposes. Occupancy expenses are those expenses you pay to own, rent or use your home. These include:

    • rent, or mortgage interest
    • council rates
    • land taxes
    • house insurance premiums.

    You can generally claim the same percentage of occupancy expenses as the percentage area of your home that is used to make income, and again one common way to work this out is to use the floor area put aside for work as a proportion of the floor area of your home as a whole (as can be used for some running expenses, as mentioned above).

    So if for example your home office is 10% of the total area, then you may be able to claim 10% of rent costs or mortgage interest, council rates and insurance. In some situations it may be necessary to adopt a basis other than floor area, for example where say a huge workshop attached to the home may take up a great amount of floor space but contribute much less to the value of the overall property.

    Expenses you can’t claim

    If you are working from home only due to COVID-19, you:

    • cannot claim occupancy expenses such as mortgage interest, rent and rates
    • cannot claim the cost of coffee, tea, milk and other general household items your employer may otherwise have provided you with at work.

    Calculating running expenses

    There are three ways you can choose to calculate your additional running expenses:

    • shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses

    Note that where you are running a business from home rather than having a home office you can opt to claim occupancy expenses, such as mortgage interest. However, you’ll be expected to account for any capital gain attributable to the business area of the home when you sell the house. Generally the family home is exempt from capital gains tax (CGT), but if you’ve carried on a business based on the above, that portion of the home attributable to the business activity will be subject to CGT. There are however some CGT concessions for small businesses, which we can detail for you should this be relevant to your situation.

    Reference: Supplied by Tax and Super Australia

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