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J N Hartcher
Accounting & Taxation Services

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Tax 2020

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Services

   ❁  Income Tax Returns

   ❁  Accounting

   ❁  Small Business Consulting

   ❁  PC Desktop Accounting Software
          more

Whether it be 'In Office' with social distancing, electronic or digital communication, it will be quasi business as usual. Where possible, clients will be encouraged to provide documents via email. Documents needing to be signed off can be processed/delivered similarly. If contact is necessary during this period, initially you can telephone me or use the link below to email me at jnhartcher@bigpond.com
I wish you all the best during these trying times.




2020-2021 Federal Budget

7 October, 2020 View

Allows eligible businesses to claim a tax deduction on the full cost of buying a new or second hand asset upfront.

Allows eligible businesses to offset losses against previously taxed profits View




COVID-19

COVID-19 Early release of Super View

You will need and have a MyGov Account linked to the Australian Taxation Office and depending upon your security settings you may require the use of a mobile phone.
The ATO Request for Withdrawal process is brief and functional.






NSW Gov't COVID-19 Assistance

The NSW Government has Covid-19 assistance available for qualifying businesses View




JobKeeper
JobKeeper Extensions (1 and 2)

NOTE: From 28th September businesses will be required to satisfy the 'Fall In Turnover' test by comparing September 2019 quarter GST Turnover with September 2020 quarter GST Turnover to qualify for JobKeeper.

For the first extension period running from 28 September 2020 to 3 January 2021, employees who worked for 80 hours or more in the 28 day period before either 1 March 2020 or 1 July 2020 will receive $1,200 per fortnight, while all other employees will receive $750.
From 4 January 2021 to 28 March 2021 these fortnightly rates will reduce to $1,000 and $650 respectively.
For more information refer to:   JobKeeper extension






JobKeeper extension 2

Yes.

This extension period will run from 4 January 2021 to 28 March 2021.
You will need to show that your actual GST turnover has declined in the December 2020 quarter relative to a comparable period (generally the corresponding quarter in 2019). See the actual decline in turnover test. You also need to have satisfied the original decline in turnover test. However, if you: were entitled to receive JobKeeper for fortnights before 28 September, you have already satisfied the original decline in turnover test are enrolling in JobKeeper for the first time from 28 September 2020, if you satisfy the actual decline in turnover test, you will also satisfy the original decline in turnover test (except for certain universities). You can enrol on that basis.

You can be eligible for JobKeeper extension 2 even if you were not eligible for JobKeeper extension 1.
The rates of the JobKeeper payment in this extension period are:
Tier 1: $1,000 per fortnight (before tax)
Tier 2: $650 per fortnight (before tax). The full detail


It is important to note that GST turnover is a specific term which may include different revenue items to what is usually included in Business Activity Statements. For example, GST turnover for the purposes of the JobKeeper provisions includes all taxable supplies, most GST free supplies, but not input taxed supplies.

Input Taxed Supplies can be:
❁  Financial supplies (which includes most transactions relating to money)
❁  Supplies of residential rents
❁  Sales of residential premises (but not new homes)
❁  Precious metal supplies
❁  Food supplied by school tuckshops and canteens
❁  Fundraising events by charities and;
❁  Coin-operated devices




JobMaker Hiring Credit

Administered by the Tax Office, the scheme will run for 12 months from 7 October, with registrations through ATO online services, the Business Portal, or through registered tax and BAS agents now open.

The scheme will see eligible employers able to access up to $200 per week for each eligible additional employee aged 16 to 29 years, and up to $100 per week for each eligible additional employee aged 30 to 35 years.

To be eligible, the employee will need to have worked for a minimum of 20 hours per week, averaged over a quarter, and received the JobSeeker payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when they are hired.

Employers cannot be receiving JobKeeper payments at the same time and must also meet a number of eligibility conditions, including being registered for pay-as-you-go (PAYG) withholding, hold an Australian business number (ABN), be up to date with their tax lodgement obligations, and be reporting through single touch payroll (STP).

Entities exempt from STP reporting will need to meet additional requirements and provide these details by contacting the ATO by phone.

The hiring credit is paid every three months in arrears, with claims for the first quarterly payment to open on 1 February 2021.

ATO deputy commissioner James O’Halloran has encouraged businesses to check their eligibility and take the first step to register for the scheme from this week, noting that they cannot claim the credit if they are not registered.

"We encourage employers to register from now to ensure their hiring credits can be paid promptly from when the first quarterly claim period opens in February 2021", said Mr O’Halloran.

"Employers are reminded that new employees must have received the Parenting Payment, Youth Allowance (Other) or JobSeeker Payment for at least 28 consecutive days (or 2 fortnights) within the 84 days (or 6 fortnights) of being hired to allow for a claim to be made by the employer."

"There are some key dates to keep in mind, and simple steps employers can take now, but please remember that not everything needs to be done from next week."

Last week, Mr Frydenberg registered the rules of the scheme, while the Commissioner of Taxation registered a legislative instrument setting out the reporting obligations required under the scheme.


The ATO full detail




Working From Home During COVID-19

If you are working from home you may be able to claim some work related home office expenses View



Super Guarantee Amnesty

The Super Guarantee Amnesty ended 7 September More




Single Touch Payroll

Closely held payees i.e. Family Companies with Directors as the only payees, will have reporting options.

9/2/2021 - The ATO has confirmed that STP reporting for closely held payees will commence from 1 July, after it had granted these employers a one-year exemption in the midst of the pandemic last year.

Guidance released by the ATO on Monday has revealed that small employers can report payments to closely held payees through STP in three ways: reporting actual payments in real time, reporting actual payments quarterly or reporting a reasonable estimate quarterly.

The first option, reporting actual payments in real time, is in line with how employers would report information on their arm’s length employees through STP on or before each pay day.

The option to report actual payments on a quarterly basis will be due on or before the due date for quarterly business activity statements (BAS).

The final option to report a reasonable estimate quarterly will allow employers to report quarterly amounts that are equal to or greater than 25 percent of the payee’s total gross payments and tax withheld from the previous finalised payment summary annual report (PSAR).

‘A game changer’

The Tax Institute’s senior advocate, Robyn Jacobson, said that while the option was welcomed, tax practitioners would need to carefully consider the implications for clients who commonly determine salaries, wages or directors’ fees after the end of the financial year.

“For those who have for many years ascertained salaries, wages or directors’ fees to closely held payees post-year-end and either amended their BAS or just dealt with the tax obligations upon lodgement of the individual tax return, this is a game changer,” Ms Jacobson told Accountants Daily.

“The ATO will not impose any failure to withhold penalties as long as you have complied with this reasonable quarterly estimate.

“There would, however, be general interest charge, and if you have not met your SG obligations, which in this case would be 28 July, then there would be SGC liabilities.

“What this does is allow a concessional approach to reporting the information through STP, and as far as PAYG withholding is concerned, you have got the ability to adjust post-year-end subject to the imposition of GIC.”

While a finalisation declaration for arm’s length employees is required by 14 July each year, the ATO will allow employers with closely held payees up to the due date of the payee’s income tax return to make a finalisation declaration.

The ATO also notes that STP reports will need to be lodged through an STP-enabled solution, and cannot be lodged through the ATO portals or through a BAS.

Reference: Accountants Daily



TAX 2020

Overview of Tax changes for 2020 view



Residential Rental Property Travel

Travel to inspect, maintain or collect rents for residential rental properties is no longer deductible.more



Other Tax Time Considerations
❁ Superannuation
❁ Rental Property
❁ Depreciation
❁ Travel and Meal Allowances
❁ Record keeping for Home Office and other minor expenses
❁ Motor Vehicle Record keeping
❁ HELP, HECS & other Loan Schemes
more



Instant Asset Write-Off

New or Second hand Plant and Equipment purchased prior to June 30th will qualify for the Small Business Instant Asset Write-Off. Acquisitions must be below the threshhold at the time of purchase which was $30,000 until 12th March and increased to $150,000 from that day until 31st December, 2020 for new or 2nd hand acquisitions. From 6 October 2020 till 30th June, 2022 temporary business expensing allows a deduction for the cost of the business portion of eligible business assets. more



Profile
JH   I commenced my Accounting Profession with a prominent firm in the Newcastle CBD and remained there from 1971-1985.
Eventually I moved on and opened my own Practice in downtown Raymond Terrace where I remained from 1986-1999.
In 2000 I relocated the Practice to a Home Office where my focus is now Small Business Accounting/Consulting and Taxation Services.
And there but for the grace of God, I still remain.

I have been using my own accounting software The WorkBench Delphi since the mid 1980's and it is now used by many of my clients. The package was purposely written with simplicity of use in mind and users rarely require assistance. Remote assistance is available for those who may.


Resident Tax Rates 2020-21
Taxable income Tax on this income
0 - $18,200 Nil
$18,201 - $45,000 19c for each $1 over $18,200
$45,001 - $120,000 $5,092 plus 32.5c for each $1 over $45k
$120,001 - $180,000 $29,467 plus 37c for each $1 over $120k
$180,001 and over $51,687 plus 45c for each $1 over $180k

These rates do not include the Medicare levy of 2%

HELP loan repayment rates: View


Tax