Small Business – $5,000 Business Basics Grant – Round 4

The Queensland Government have recently announced the fourth round of the Business Basics Grant to help Queensland small businesses continue to recover and grow.

The Business Basics Grant provides up to $5,000 to help businesses increase core skills and adopt best practice. 

Activities financed:

The grant will fund activities from one of the following priorities:

1. Training and coaching (including business development, marketing, HR or business planning topics)
2. Website build or upgrades (including developing new website content, adding e-commerce)
3. Professional business advice (including business plans)
4. Strategic marketing advice (including search engine optimisation advice)
5. Business continuity and succession planning (including cyber-safety training and tools)

The grant will not fund the following:

• Activities bought using cryptocurrencies, barter, or services in-kind;
• General operating expenses;
• Real estate/property, hire, lease or rental fees;
• Goods, services or fees from related parties;
• Travel;
• Franchise fees;
• Purchase of stock;
• GST, registration and fees;
• Maintenance of existing digital technologies;
• Computer hardware;
• Other hardware/devices/equipment (eg. televisions, EFTPOS, card and chip readers);
• Activities purchased through direct selling (eg. by party plan or network marketing);
• Delivery, credit card and transaction fees;
• Memberships and joining fees;
• Salaries;
• Website Hosting;
• Implementation of marketing tactics such as advertising, direct marketing (eg. telemarketing) or campaign delivery (eg. Google AdWords, Facebook advertising or similar expense).

Eligibility:

To be eligible for the grant, your businesses must:

• not have been approved for funding under Round 1, 2 or 3 of this Grant;
• have fewer than 20 employees at the time of applying for the grant (by headcount);
• have an active ABN and be registered for GST;
• have a Queensland headquarters;
• have a turnover of $300,000 or less in the current financial year;
• not be insolvent or have owners/directors that are an undischarged bankrupt.

Your business must also maintain this eligibility for the duration of the grant funded activity.

Application process:

Grants will be awarded through a two-stage process (which is different to the previous rounds of the grant).  Businesses can register their interest to apply by completing an online form (which collects basic business information).  Businesses will then be selected by a ballot to submit a full application.  This will ensure that all small businesses have equal and fair opportunity to register their interest at any time once registrations open.

Key details:

• Funding available: up to $5,000
• Registration of Interest (ROI) Opens: 24 November 2022 (closes 5 December 2022)
• Full Applications Open: 12 December 2022 (selected ROI applicants only)

To apply (and for more details) go to: https://www.business.qld.gov.au/starting-business/advice-support/grants/business-basics-grant

!! UPDATE – 30 SEP 22 !!

It is being reported today that Queensland Premier Annastacia Palaszczuk has decided to “shelve” the controversial land tax changes (outlined below).  We will provide more details as they come to hand. 

Queensland Land Tax Changes

From 30 June 2023, Queensland land tax will be calculated using the total of your Australian landholdings.

The total of your Australian landholdings will be used to determine:

• whether the tax-free threshold has been exceeded;
• the rate of land tax that will be applied to the Queensland proportion of the value of your landholdings.

The current tax-free thresholds are $600,000 for individuals (other than absentees) and $350,000 for companies, trustees and absentees.

You’ll only pay tax on the land you own in Queensland (ie. Queensland land tax is not being imposed on land outside of Queensland).

Queensland land only

If you only own land in Queensland, you will not be affected by this change.

Queensland and interstate land

If you own land in Queensland and in another state or territory, you will need to declare your interstate landholdings.

You will need to setup a QRO online account and complete the declaration (including land description, value and percentage of ownership).

From 30 June 2023, you will need to complete this declaration by the earlier of the following:

• within 30 days of receiving a land tax assessment notice
• on or before 31 October.

Calculation land tax with interstate land

The land tax rate that applies depends on what type of owner you are and the value of your land.  This rate (and surcharge, if applicable) is applied to the total value of your Australian land.  Then this figure is applied to the Queensland proportion to get the annual land tax liability.

You can use the interstate estimator to get an idea of how much land tax you may have to pay from 30 June 2023.

Exclusions

For land in Queensland, you may be eligible for a land tax exemption depending on the ownership and use of the land.  If your interstate land meets certain eligibility criteria requirements, you can apply to have its value excluded from the land tax calculation.

Exclusions available for Qld and interstate land

• Home (principal place of residence)
• Primary production
• Supported accommodation
• Moveable dwelling (caravan) park
• Retirement village
• Transitional home
• Charitable institutions
• Aged care

Exemptions available for Queensland land only

• Government land
• Port authority land
• Societies, clubs and associations

Action to take

If you own land in Queensland and interstate, you need to:

1. Review the total value of your landholdings;
2. Setup a QRO online account and complete the declaration of your landholding.
3. Calculate your potential land tax liability using the online calculator to ensure you budget for the new liability.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Small Business Skills and Training Boost – Draft Legislation

The Federal Government has recently released Exposure Draft Legislation for the Small Business Skills and Training Boost.  The Boost is a temporary measure to incentivise small businesses to upskill their employees or train new employees.  Under the Boost, businesses will be able to claim a 120% deduction for eligible expenditure.

* Please note, that the Boost has only been released as Exposure Draft Legislation and will not be law until the relevant legislation has been passed by Parliament.  We will keep you updated on the status of the proposed measures.

Who is eligible?

Businesses with an aggregated turnover of less than $50 million are eligible for the bonus deduction.

As discussed in more detail below, sole traders, partners in a partnership and independent contractors are not eligible for the bonus deduction.

What can be claimed?

The bonus deduction applies to expenditure incurred for in-person or online training for your employees.  The training must be provided by a registered training organisation.  The services provided must be within the scope of the registered provider’s registration (which can be checked at www.training.gov.au).

The training cannot be provided by an associate of the employer.  In-house training or on-the-job training is also not eligible. 

Only the amount charged by the registered training organisation is eligible for the bonus deduction.  If there are incidental costs to the training (eg. books or equipment), it will only be eligible for the bonus deduction if the training provider charges your business for these.

There is no cap on the amount claimed.

When does it apply?

It applies to expenditure incurred from 7:30pm on 29 March 2022 to 30 June 2024.

Any expenditure incurred between 29 March 2022 and 30 June 2022 will be claimed in the 2023 tax return.

What is excluded?

Sole traders, partners, independent contractors

As the draft legislation currently stands, the bonus deduction is only available for spending on external training for employees.  The explanatory memorandum for the draft legislation specifically states that the bonus deduction is not available for sole traders, partners in a partnership and independent contractors (as they are not “employees” of the business).

Incidental costs

As noted above, incidental costs (like books or equipment) cannot be claimed unless the registered trainer charges for these.

Action to take

1. Review all expenditure incurred from 29 March 2022 to 30 June 2022 to identify whether your business has incurred any costs eligible for the bonus deduction.  Document these costs and have them ready for your 2023 tax return.  If you are one of our business clients, please feel free to email the invoices for these costs through to us and we will retain these on file for your 2023 tax return.
2. Setup a separate expense account in your chart of accounts to track eligible training expenses for the 2023 and 2024 year (to make it easier to identify and claim at year end).
3. For all eligible expenditure, ensure you have an appropriate invoice from the registered training organisation (and that the services provided come within their scope of their registration).  If you are using accounting software like Xero, you can attach these invoices to the relevant expense entry (making it easier at year end for your accountant to review the eligibility of the expense).
4. For all eligible expenditure, ensure it has been incurred for employees (ie. that the relevant employee is recorded on the payroll of the business and that appropriate payroll data has been lodged via Single Touch Payroll for the employee).
5. Review your current training programs for your staff and consider whether additional training is required.  If so, ensure the training is undertaken prior to 30 June 2024 to be eligible to the bonus deduction.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Small Business Technology Investment Boost – Draft Legislation

The Federal Government has recently released Exposure Draft Legislation for the Small Business Technology Investment Boost provides businesses with a 120% deduction for expenditure to support their digital technologies. 

* Please note, that the Boost has only been released as Exposure Draft Legislation and will not be law until the relevant legislation has been passed by Parliament. We will keep you updated on the status of the proposed measures.

Who is eligible?

Businesses with an aggregated turnover of less than $50 million are eligible for the bonus deduction.

What can be claimed?

Eligible businesses can claim a bonus 20% deduction on expenditure to support digital operations.  The expenditure must be incurred wholly or substantially for the purposes of a business’ digital operations or digitising the entity’s operations.  This may include:

• Digital enabling items – computer and telecommunications hardware and equipment, software, systems and services that form and facilitate the use of computer networks
• Digital media and marketing – audio visual content that can be created, accessed, stored or viewed on digital devices; and
• e-commerce – supporting digitally ordered or platform enabled online transactions.

It only applies to expenditure up to $100,000 per income year (which would give the business an maximum additional $20,000 deduction per income year).

When does it apply?

It applies to expenditure incurred from 7:30pm on 29 March 2022 to 30 June 2023.

Any expenditure incurred between 29 March 2022 and 30 June 2022 will be claimed in the 2023 tax return.

What is excluded?

A bonus deduction cannot be claimed on the following costs:

• Salary and wages
• Capital works claimable under Division 43 (building depreciation)
• Financing costs
• Training and education (see the Small Business Skills and Training Boost)
• Spending associated with training stock.

The boost is not intended to cover general operating costs relating to employing staff, raising capital, the construction of the business premises and the cost of goods and services that the business sells.

Action to take

1. Review all expenditure incurred from 29 March 2022 to 30 June 2022 to identify whether your business has incurred any costs eligible for the bonus deduction.  Document these costs and have them ready for your 2023 tax return.
2. Setup a separate expense account in your chart of accounts to track these expenses for the 2023 year (making it easier to identify and claim at year end).
3. For all eligible expenditure, ensure you have appropriate invoices to support the cost.  If you are using accounting software like Xero, you can attach these invoices to the relevant expense entry (making it eaiser at year end for your accountant to review the eligibility of the expense).
4. Consider whether your business needs to make further investments to support their digital operations.  If so, ensure these costs are incurred before 30 June 2023.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

Below we have outlined some upcoming changes to employee superannuation obligations and employee data reporting.  It is important to check that your payroll software is updated to take into account these changes.  Some of these changes will increase your overall employee costs and will need to be taken into account when you are setting your budget for the 2023 financial year.

Superannuation guarantee rate increasing to 10.5%

The superannuation guarantee (SG) rate will increase to 10.5% from 1 July 2022 and will continue to increase by 0.5% each financial year until it reaches 12% on 1 July 2025.

Business impact

The increase in the SG rate can have the following impacts on your business:

1. An increase in your superannuation expense – if your employees are paid their super on top of their hourly rate or salary, then an increase in the SG rate will increase your overall superannuation liability.
2. An increase in your workcover cost – workcover is calculated on the wages and superannuation that you pay to your employees so an increase in the superannuation rate will increase the total wages declared to workcover.
3. A liability to payroll tax – if your business is near the payroll tax threshold, an increase in your superannuation expense may result in you becoming liable to payroll tax.
4. An increase to your existing payroll tax liability – if your business is already liable for payroll tax, an increase to your superannuation expense will increase your overall payroll tax liability.

Action to take

To ensure your business takes into account the implications of the increase in the SG rate, we recommend that you:

1. Review your employee contracts or awards to determine if their wages include or exclude superannuation;
2. Calculate your increased liability for superannuation, workcover and payroll tax and factor this into your business’ budget and cashflow forecasts;
3. Review your method of recording and reporting employee superannuation and ensure that the increased rate will be reflected in your reporting system (most online accounting software – Xero, Reckon, MYOB etc – should be automatically updated to take into account the increased rate);
4. Ensure you pay your employee superannuation by the relevant due dates (28 July, 28 October, 28 January, 28 April) to avoid a potential 200% penalty for late payment.

$450 monthly wages threshold for superannuation guarantee removed

Prior to 1 July 2022, employers only had to pay super once an employee’s monthly wage exceed $450.  From 1 July 2022 employers will be required to make superannuation guarantee contributions to their employee’s super fund regardless of how much the employee is paid. 

Single Touch Payroll Phase 2 

Single Touch Payroll Phase 2 is an extension to the original Single Touch Payroll reporting system introduced on 1 July 2018.  Phase 2 is intended to reduce the reporting burden for employers who need to report information about their employees to multiple government agencies (like Services Australia).

The mandatory start date for Phase 2 reporting is 1 January 2022.  However, the ATO is offering a flexible approach to transition by allowing employers who were reporting by 1 March 2022 to be deemed compliance at 1 January 2022.

Digital Service Providers also have the option to apply for a deferred start date.  This deferred start date then automatically applies to customers of that provider.  For example, Xero has a deferred start date of 31 December 2022 for its customers. 

Action to take

Check with your digital service provider to determine their status with regards to the implementation of Single Touch Payroll Phase 2.  Please contact us if you employ staff and you are unsure of whether your software is compliant.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent.

The Queensland Government have recently announced the third round of the Business Basics Grant to help Queensland small businesses continue to recover and grow.

Small Business – Business Basics Grant – $5,000

The Business Basics grant provides up to $5,000 to help businesses increase core skills and adopt best practice. 

Activities financed:

The grant will fund activities from one of the following priorities:

1. Training and coaching
2. Website build or upgrades
3. Professional business advice
4. Strategic marketing advice
5. Business continuity and succession planning.

Eligibility:

To be eligible for the grant, your businesses must:

• not have been approved for funding under Round 1 or 2 of this Grant;
• have fewer than 20 employees at the time of applying for the grant (by headcount);
• have an active ABN and be registered for GST;
• have a Queensland headquarters;
• have a turnover of $300,000 or less in the current financial year;
• not be insolvent or have owners/directors that are an undischarged bankrupt.

Key details:

• Funding available: up to $5,000
• Opens: 4 May 2022
• Closes: When funds are exhausted

To apply (and for more details) go to: https://www.business.qld.gov.au/starting-business/advice-support/grants/business-basics-grant

On 1 November 2021, employers will need to request details of an employee’s “stapled super fund”  from the ATO, if the employee does not nominate a choice super fund.

What is “stapled super fund”?

A stapled super fund is an existing super fund account that is linked (“stapled”) to an individual employee.

This stapled super fund account follows the employee if they change jobs.  It is intended that all contributions for the individual go into this stapled super fund account which will avoid a new account being set up each time an employee starts a new job.

When do you need to request stapled super fund details?

As an employer, you will need to request stapled super fund details for new employees who start on or after 1 November 2021, when:

• you need to make super guarantee payments for that employee; and
• they are eligible to choose a super fund, but don’t.

You may also need to request stapled super fund details for some employees who are ineligible to choose their own super fund (temporary residents and employees covered by an enterprise agreement or workplace determination made before 1 January 2021).

How do you request stapled super fund details?

Before you can request stapled super fund details using the ATO online services, you need to have offered all eligible employees a choice of super fund.

You (or your authorised representative, including tax agent) can request stapled super fund details using the ATO online services. 

You will only be able to request your employee’s stapled super fund details after you have submitted a tax file number declaration or single touch payroll pay event, which identifies your employment relationship with your employee.

What happens if you haven’t made a request for an employee’s stapled super fund when you should have?

You may be liable for a superannuation choice shortfall penalty if you contributed an employee’s superannuation to your default fund (without making a stapled super fund request).

Steps to take from 1 November 2021 for new employees

From 1 November 2021, you need to take the following steps for all new employees:

1. Provide your eligible employees with a Choice of Superannuation Form.
2. Establish your employment relationship with the employee by submitting a tax file number declaration or single touch payroll event.
3. If your employee does not choose their own superannuation fund (using the Choice form), you must request details of their stapled super fund from the ATO.
4. Once you receive the stapled super fund details for your employee, you must make superannuation contributions for this employee into this stapled fund.

You may incur shortfall penalties if you make contributions into a default fund without making a stapled super fund request.

For more information

Please do not hesitate to contact us if you require any further information about the new stapled super fund requirements.