Employers…changes are coming

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.

Business Basics Grant

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

Federal Budget 2022-23

UPDATE – 13 APRIL 2022

Legislation has been passed to enact the following tax-related measures announced in the budget:

  • The tax deductibility of COVID-19 tests for the purposes of attending your workplace or required during the course of carrying on your business;
  • The increase to the low and middle income tax offset by $420 (to $1,500);
  • A one-off cost of living payment of $250 to certain social security and pension recipients;
  • A reduction to the GDP factor for 2022-23 for the calculation of PAYG and GST instalments;
  • A 50% reduction to fuel excise and excise-equivalent customs duty;
  • The increase in the Medicare Levy low-income thresholds for individuals and families and those eligible for the senior and pensioner tax offset.

Notably, there has not been legislation introduced for the proposed Small Business Skills and Training Boost and the Technology Investment Boost.  Given that Parliament has now been dissolved, we will need to await the outcome of the Federal Election to see whether these new measures will be legislated in the future.

On Tuesday night, 29 March 2022, Federal Treasurer Josh Frydenberg handed down his fourth Federal Budget.  To be fair, the current Treasurer hasn’t had the easiest of times in the job.  Two out of three of his budgets were delivered amidst global pandemic and economic uncertainty.  He now faces a ‘make-or-break’ budget with a looming federal election.  Pre-budget leaks of direct cash payments and relief at the petrol pump, both targeted at reducing the cost-of-living, turned out to be correct.

Last year, the deficit for the 2021-22 financial year was forecast to be $106.6 billion.  This has now improved to $79.8 billion.  The improvement seemingly coming from more people back at work and fewer on welfare, meaning the Government has collected more tax revenues than expected.

Key budget measures that will impact on our clients include:

  • An extra $420 in individual tax relief for 2022 tax returns (to be lodged from 1 July 2022).  This will be reflected in an increase in the low and middle income tax offset (LMITO) to $1,500;
  • Temporary full expensing of eligible assets extended to 30 June 2023;
  • Temporary reduction to the fuel excise which will reduce fuel costs for individuals and businesses;
  • A 120% deduction for eligible costs aimed at encouraging small businesses to adopt digital technologies (like portable payment devices, cyber security systems and subscriptions to cloud-based services); and
  • A 120% deduction for costs incurred in training and upskilling staff.

Unfortunately, there was still no substantial debate around the change or movements to GST or significant tax reform.  We have an expected late May 2022 Federal election, and a great part of this Budget was aimed at providing immediate relief to taxpayers (rather than addressing any long term, significant tax reform).

We’ve outlined below some of the main tax measures that were announced in the Budget.  As with all budgetary measures, these measures are not final until the relevant legislation has been passed by the Government.  We will keep you updated on the status of any proposed measures.

Temporary reduction in fuel excise

The excise and excise-equivalent customs duty rate that applies to petrol and diesel will be halved for 6 months (to 28 September 2022).

The current rate of excise and excise-equivalent customs duty is 44.2c/L. This will be halved to 22.1c/L.

The price faced by consumers at the petrol pump is expected to reduce by more than the 22.1c/L given that GST will now be levied on a lower excise amount.

The ACCC will be monitoring the price behaviour of retailers to ensure the lower excise rate is passed on to consumers.

Low and Middle Income Tax Offset

To help ease the increasing costs of living, the Low and Middle Income Tax Offset (LMITO) has been increased.  This offset reduces the amount of tax payable by individuals (and will be reflected in a higher tax refund when the 2022 income tax return is lodged). 

The LMITO will be increased by $420 for individuals (to $1,500) and by $840 for couples (to $3,000). Taxpayers with incomes of more than $126,000 will not be eligible for the offset.

Cost of living payment

In April, a one-off $250 payment will be made to eligible Australian pensioners, welfare recipients, veterans and concession card holders.

The eligible recipients are those that receive the following payments or hold the relevant concession cards:

  • Age pension
  • Disability support pension
  • Parenting payment
  • Carer payment
  • Carer allowance
  • Jobseeker payment
  • Youth Allowance
  • Austudy and Abstudy living allowance
  • Double orphan pension
  • Special benefit
  • Farm Household Allowance
  • Pensioner Concession Card holders
  • Commonwealth Seniors Health Card holders
  • Eligible Veterans’ Affairs payment recipients and Veteran Gold Card holders.

The payments are exempt from tax and will not count as income support for the purposes of income support payments.  You can only receive one payment (even if you are eligible under 2 or more categories).  The payment is only available to Australian residents.

Small Business - Skills and Training Boost

The skills and training boost is designed to support small businesses to train and upskill their employees.

Small businesses (with a turnover of less than $50 million) can claim an additional 20% deduction for expenditure incurred on external training courses provided to their employees.

The external training course must be provided to employees in Australia or online and delivered by entities registered in Australia.  It does not include in-house or on-the-job training.

For example, if your business paid $1,000 for your employee to attend a training course, your business could be eligible to claim a deduction of $1,200.

This measure applies to expenditure incurred from 7:30pm, 29 March 2022 to 30 June 2024.  Expenditure incurred between 29 March 2022 to 30 June 2022 can only be claimed in the 2023 financial year.  Expenditure incurred between 1 July 2022 and 30 June 2024 can be claimed in the year in which it is incurred.

Small Business - Technology Investment Boost

The technology investment boost is designed to encourage digital adoption by small businesses.

Small businesses (with a turnover of less than $50 million) can claim an additional 20% deduction for expenditure incurred on business expenses and depreciating assets that support adoption – for example: portable payment devices, cyber security systems or subscriptions to cloud-based services.

There is a cap of $100,000 on expenditure that will be eligible for the boost.

For example, if your business paid $100 for a subscription to a cloud-based service, your business could be eligible for a deduction of up to $120.

This measure applies to expenditure incurred from 7:30pm, 29 March 2022 to 30 June 2024.  Expenditure incurred between 29 March 2022 to 30 June 2022 can only be claimed in the 2023 financial year.  Expenditure incurred between 1 July 2022 and 30 June 2024 can be claimed in the year in which it is incurred.

COVID-19 Measures

Business grants

Certain COVID-19 business support program payments (from states and territories) will be non-assessable and non-exempt income until 30 June 2022 (this measure was originally announced on 13 September 2020).

Deductibility of COVID-19 tests

The cost of taking a COVID-19 test to attend a place of work will be tax deductible from 1 July 2021.

Further, fringe benefits tax will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.

Free Rapid Antigen Tests

The Government will be delivering up to 20 free Rapid Antigen tests to all Australians with a concession card.

Changes to PAYG instalment system

PAYG instalment rates

The GDP uplift factor for PAYG and GST instalments is to be reduced to 2% (currently the statutory rate is 10%).  This measure will provide cash flow support to small businesses (including sole traders) and other individuals with investment income.

While this may free up cash in the short term for taxpayers, it is simply deferring the tax liability which may present additional cashflow problems when the end of year tax returns are prepared and final tax liabilities become payable.

Modernisation of PAYG instalment system

It is anticipated that from 1 January 2024, companies can choose to have their PAYG tax instalments calculated based on current financial performance extracted from their business accounting software (with some tax adjustments).  This is subject to software providers having the anticipated systems in place by 31 December 2023.

Superannuation - Minimum pension drawdowns

The 50% reduction to minimum pension drawdowns has been extended to 30 June 2023.  This will allow retirees to avoid selling down assets in order to have sufficient cashflow to meet the minimum drawdown requirements.

Other measures of interest

Some other measures of interest from a tax perspective include:

  • Dad and Partner Pay and Parental Leave pay to be combined into a single scheme with up to 20 weeks, fully flexible and shareable leave available for eligible working parents to take as they see fit.  It can be taken at any time within 2 years of the birth or adoption of their child.
  • ATO to share STP data with State and Territory Revenue offices on an ongoing basis.  This will be used for prefilling of payroll tax returns.
  • $80 million in additional support for small and medium export businesses to re-establish their presence in overseas markets through the Export Market Development Grant (EMDG) program.
  • Approx. $157 million in assistance to Ukraine (including $91 million in military assistance and $65 million in humanitarian assistance).
  • Option to report Taxable Payments Reporting System Data to the ATO on the same lodgement program as activity statements from 1 January 2024.  This is subject to the software providers being able to deliver appropriate software by 31 December 2023.

We will keep you up-to-date with the progress of the implementation of these Budget measures.

If you would like to discuss the tax implications of the budget proposals, please call us on (07) 56656469.

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.

Employers – New Stapled Super Obligations

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.



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.

Director ID Regime

The Australian Business Registry Services (ABRS) will start the director ID Regime from 1 November 2021.

What is a director ID?

A director ID is a 15 digit unique identifier that will help prevent the use of false or fraudulent director identities. Directors will only ever have one director ID (much like a tax file number).  They will keep it forever even if they:

  • change companies
  • stop being a director
  • change their name
  • move interstate or overseas.

Who needs a director ID?

You need a director ID if you’re an eligible officer (director or alternate director) of:

  • a company, registered Australian body or registered foreign company under the Corporations Act 2001;
  • an Aboriginal and Torres Strait Islander corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006.

A director must apply for their director ID themselves because they need to verify their identity.  No one can apply on their behalf.

What do you need to do from 1 November 2021?

Individuals who are currently a director or who will be acting as a director in the future must apply for a director ID in the timeframes outlined below:

Director on or before 30 November 2021: You must apply by 30 November 2022

Director between 1 November 2021 and 4 April 2022: You must apply within 28 days of appointment

Director from 5 April 2022: You must apply before appointment

How do individuals apply for a director ID?

Step one: Setup myGovID

Please note that myGovID is different from myGov.  myGovID is an app you download to your smart device.  It lets you prove who you are and log in to a range of government online services, including myGov. 

If you have myGovID, you do not need to do anything until 1 November when you can apply for your director ID.

If you do not have myGovID, you can find information on how to download the app at How to Setup myGovID.

Step two: Gather your documents

You will need to have some ATO information ready when you apply for your director ID:

  • Your tax file number
  • Your residential address as held by the ATO
  • information from two documents to verify your identity, including:
    • bank account details
    • an ATO notice of assessment
    • super account details
    • dividend statement
    • Centrelink payment summary
    • PAYG payment summary

Step three: Complete your application

From November 2021 you can log in at the ABRS website and apply for your director ID.

For more information

Please do not hesitate to contact us if you require any further information about the director ID regime.  You can also visit Australian Business Registry Service.



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.

$1,000 QLD COVID-19 – Non-employing “sole trader” Grant

Details for the Queensland $1,000 non-employing sole trader COVID-19 grant have been released and applications are now open.  Applications close on 30 November 2021.
 
We have outlined below the eligibility criteria and the application process for the $1,000 grant.
 

Eligibility Criteria

To be eligible for the $1,000 non-employing “sole trader” grant, your business will need to satisfy the following eligibility criteria:

1. You are an individual operating as a sole trader (this includes businesses operating through a company, trust or partnership structure).

The grant will be available to all operating structures (not just sole traders).  The description of the grant a “sole trader” grant is misleading as the grant extends to all operating structures.

2. You do not employ staff

3. You are registered for GST

4. You have a principal place of business in Queensland

5. Your business was based and trading in Queensland on 31 July 2021

6. The owners/directors/partners/trustees are not insolvent or an undischarged bankrupt

7. You have a turnover of more than $75,000 for any of the 2018/19, 2019/20 or 2020/21 financial years.

If you have not been trading for a full financial year – you need to be able to prove that you would reasonably meet this turnover for the 2021/22 financial year.

8. You had to stop operating or had limited operations because of a Queensland lockdown event, or you have been affected by a Queensland lockdown event.

9. You had a reduction in turnover of 30% or more during a nominated 7 day period.

This is a 7 day period that includes at least one lockdown day.  It must be compared to the same period from 2019.  However, if your business was not trading in 2019, or the 2019 period does not reflect your typical weekly turnover, you may use another comparable 7-day period.

Ineligibility considerations

You will be ineligible for the grant if:

  • Your application details cannot be verified by 30 November 2021;
  • Your income is solely rent from rental properties, interest on investments or dividends;
  • You received an Australian Government COVID-19 disaster payment; or
  • You have received or are eligible for another COVID-19 business support grant.

Application process

You will need to apply for the Grant via the QGrants website: https://qgrants.osr.qld.gov.au/appl_direct?program=0050560103891EEC82A959B17EB77A92

While applications close on 30 November 2021, only grants that can be verified by 30 November 2021 will receive grant funds.  If you consider that it may take a few days for your information to be verified, you will need to lodge your application prior to 30 November 2021.

More information

For more information, go to the Business Queensland website: https://www.business.qld.gov.au/starting-business/advice-support/grants/covid19-support-grants


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.

$5,000 QLD COVID-19 Business Support Grants

Breaking news

15 August 2021

The Federal Government has announced a 50/50 funding agreement with Queensland to extend the original COVID-19 Business Support Grant.  The Grant will now be extended to provide:

  • A $1,000 one-off grant to non-employing sole traders across Queensland that have had a decline in turnover of more than 30%.
  • Payroll-based support for all businesses across Queensland, that have had a decline in turnover of more than 30%:
    • A $5,000 one-off, top-up grant to small business with a payroll of less than $1.3 million (this is in addition to the $5,000 already offered under the Business Support Grant);
    • A $10,000 one-off, top-up grant to medium sized business with payroll between $1.3 million and $10 million (again, this is in addition to the $5,000 already offered under the Business Support Grant);
    • A $25,000 one-off, top-up grant to large sized tourism and hospitality focused businesses only with payroll of greater than $10 million.

Businesses that are eligible for the payroll-based support will simply apply as outlined below.

We do not yet have details for how non-employing sole traders can apply for the $1,000 grant.  We will update this post as soon as the information is released.

14 August 2021

Guidelines for the $5,000 COVID-19 Business Support Grants were released by the Queensland Government on 13 August 2021. All eligible applicants will receive the $5,000 grant.

Applications for the grant open at midday on Monday 16 August 2021.  We have outlined below the key details of the grant.

You can also use the Queensland Government’s Eligibility Checker to see if you satisfy the eligibility criteria.

Eligibility Criteria

To be eligible for the $5,000 grant, your business will need to satisfy the following eligibility criteria:

1. You employee staff and have a payroll of less than $10 million per annum

To be eligible for the grant, your businesses must employ staff (in addition to the business owners).  These staff must be on the business’s payroll.  Your total payroll must not be more than $10 million per annum for each of the 2018-19, 2019-20 and 2020-21 financial years.

You can use the following evidence to prove these criteria:

  • business financial statements, business payroll records, payroll tax return; or
  • a letter from your accountant, tax agent or BAS agent.

2. Annual turnover of at least $75,000

To be eligible for the grant, your businesses must have a turnover of at least $75,000 for either the 2018-19, 2019-20 or 2020-21 financial year.

For recently started businesses, you can still be eligible if you can prove that you will reasonably meet this turnover threshold for the 2021-22 financial year.

The evidence to prove your turnover may include:

  • business activity statements or ATO records; or
  • a letter from your accountant, tax agent or BAS agent.

3. Your business turnover suffered a 30% reduction as a result of a lock down event (either directly or indirectly)

30% reduction in turnover
The 30% reduction in tunover is calculated comparing sales from the following two periods:
  • A nominated 7 day period which includes at least one full day of a lock down event
  • The same period from 2019 (or, if 2019 is not indicative of a typical weekly turnover, a comparable 7 day period)
Directly or indirectly impacted by a lock down event

You must also show that your business was directly or indirectly impacted by a lock down event:

  • Directly impacted: Your business was directly impacted if it could not operate as specified in the lock down events;
  • Indirectly impacted: Your business was indirectly impacted if:
    • it was able to operate for a limited purpose during the lock down events; or
    • its activities were not specified in the health directions for the lock down events but were impacted by lock down events; or
    • it was located outside of the lock down areas.
Supporting evidence
If your business was directly impacted by the lock down (that is, it could not operate), you need to complete a declaration in your application.
 
If your business was indirectly impacted by the lock down, you will need to provide the following information to show the required reduction in turnover:
  • sales turnover information from your business records;
  • a letter from your accountant, tax agent or BAS agent.

4. Have a Queensland headquarters

To be eligible for the grant, your business must have a Queensland headquarters – that is, your principal place of business is located in Queensland and the impacted business was based and trading in Queensland on 31 July 2021.

You can prove this by using publicly available web information (eg. website or social media information) or utility bills for the business location.

5. Have an ABN and be registered for GST

Your business must have an Australian Business Number (ABN) which has been continuously held since 30 June 2021.  It also needs to be registered for GST.  These criteria can be evidenced by ABN Lookup Search.

6. Not insolvent or undischarged bankrupt

The business owners/company directors must not be insolvent or undischarged bankrupts.

Application process

To apply for the grant, you will need do the following:

1. Set up a QRIDA account

Queensland Rural and Industry Development Authority (QRIDA) will be administering the grant.  If you haven’t already done so, you can go to QRIDA to set up an account.  This can be done at any time.
 

2. Collate all of your supporting information

We have outlined above the supporting information that you will need for each eligibility criteria. You will need to have all of this information ready before lodging your application.  For more information, also visit: https://www.business.qld.gov.au/starting-business/advice-support/grants/covid19-support-grants

2. Lodge your application

Applications open at midday on Monday 16 August 2021.  They will remain open for 3 months until 16 November 2021.  If QRIDA requests additional information, applicants must provide this information.

You will be notified by email of the outcome of your application.

Approved applicants will receive the $5,000 grant funds into their nominated bank account within 2 weeks of approval.

More information

For more information, go to the Business Queensland website: https://www.business.qld.gov.au/starting-business/advice-support/grants/covid19-support-grants


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.

Employer Superannuation Obligations

As an employer, you have many employment obligations.  One of those is to pay your employees’ superannuation on time.  There are significant penalties for failing to comply with your superannuation obligations.  Below we have outlined your superannuation obligations, the implications of failing to comply with these obligations and what you should do if you need to get your superannuation liability up-to-date.

If you are behind in your superannuation obligations, the best thing you can do is contact a tax professional who can help you get up-to-date and make the relevant disclosures to the ATO.

When is superannuation due?

Employers are required to pay their employees super into their choice or default superannuation fund no later than the 28th day after the end of the quarter.  The relevant cut-off dates are therefore 28 April, 28 July, 28 October and 28 January.

How much super do you need to pay?

From 1 July 2021, the superannuation guarantee rate increased to 10%.  Your superannuation liability will be calculated as 10% on all ordinary times earnings payments* you make to your employees on or after 1 July 2021, even if some or all of the pay period to which the payment relates, is before 1 July 2021.

The date of the payment determines the rate of the superannuation payable, regardless of when the work was performed.

* The ATO have a list of what payments constitute ordinary times earnings here.

What if you can't (or don't) pay your super liability by the due date?

You will need to lodge a Superannuation Guarantee Charge Statement (SGC Statement) if any of the following apply to you:

  • You have failed to pay your employees’ superannuation;
  • You have paid your employees’ superannuation after the relevant due date;
  • You have paid your employees’ superannuation to the incorrect fund.

Once you have lodged the SGC Statement, you may be able to arrange a payment plan with the ATO for any outstanding superannuation liability.

Superannuation Guarantee Charge Statement

An SGC Statement must be lodged one calendar month after your superannuation liability is due (so 28 May, 28 August, 28 November, 28 February).

The SGC Statement can be lodged electronically with the ATO.

The amount due under the SGC statement will be:

  • The unpaid superannuation; plus
  • Any choice liability (based on the shortfall and capped at $500); plus
  • Nominal interest of 10% per annum (which accrues from the start of the relevant quarter until the statement is lodged); plus
  • An administration fee of $20 per employee, per quarter.

It is important to note that, even where you have paid your employee super after the due date, interest will continue to accrue until you have lodged your SGC statement.  For example, if you pay your employee super one week late, but lodge your SGC statement 2 months later, you will incur interest up until the date that you lodge the statement. 

What are the implications of not complying with your super liabilities?

If you do not comply with your super liabilities, the following implications may arise:

  1. Any superannuation payments made after the due date are not tax deductible;
  2. Failure to lodge an SGC statement by the relevant due date is liable to a penalty calculated at 200% of the superannuation liability (so you will be liable to pay the original liability which is not tax deductible plus 2 times the liability as a penalty);
  3. If the superannuation remains unpaid, the ATO may issue a Director Penalty Notice which means the directors of the company will be personally liable for the outstanding superannuation and associated penalties and interest.  This places the directors’ personal assets at risk.

There are also penalties for failing to pay superannuation into the correct fund, failing to keep appropriate records and failing to provide your employee’s TFN to the superannuation fund.

As you can see, there are significant financial penalties that can be imposed for failing to comply with your superannuation obligations.  These financial penalties can also impact on your personal assets (even if you run your business through a company).  If you are behind on making superannuation payments, we recommend that you contact us as soon as possible.

What to do next?

We recommend that you take the following action (even if you think your business is complying with its superannuation obligations):

  1. Check that your accounting software is correctly calculating your superannuation liability using the 10% superannuation guarantee rate;
  2. Check your accounting software is correctly calculating your superannuation liability on all relevant salary and wage payments;
  3. Check that your superannuation has been paid on time and to the correct superannuation funds;
  4. If you haven’t paid the right amount of super, on time and to the correct superannuation fund, you need to lodge a superannuation guarantee charge statement as soon as possible;
  5. Once the superannuation guarantee charge statement has been lodged, you can negotiate a payment plan with the ATO for the payment of the outstanding super.

We can assist you with any (and all) of the steps above.  It is important to get help as soon as possible with outstanding super.  The longer the liability is left unremedied, the higher the potential interest and penalties.

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.

New measures commencing 1 July 2021

There are a number of new changes taking place from 1 July 2021.  We have outlined some of the key changes below for you.

Superannuation guarantee rate increasing to 10%

The superannuation guarantee (SG) rate will increase to 10% from 1 July 2021 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 may 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 superannuation liability.
  2. An increase in your workcover cost – workcover is calculated based on wages and superannuation that you pay to your employees so an increase in the superannuation will increase the total wages declared to workcover.
  3. A liability to payroll tax – if your business is near the payroll tax thresholds, an increase in your superannuation expense may result in you becoming liable to payroll tax.
  4. An increase to your payroll tax liability – if your business is already liable for payroll tax, an increase 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.

Concessional (deductible) superannuation contributions cap increasing to $27,500

The concessional (deductible) superannuation contribution cap is increasing from $25,000 to $27,500 from 1 July 2021.

The increase in this cap means that most taxpayers can contribute up $27,500 into superannuation and claim a tax deduction for the contribution. 

Planning opportunities

There may be some planning opportunities that you may wish to utilise:

  • If you have maximised your contributions for the 2021 financial year, you could contribute the $27,500 for the 2022 in June 2021.  This is a reserving strategy and only provides you with a tax advantage in the first year (due to the double contributions in the first year).  It may be effective, however, if you have an unusually high income in one particular year (eg. due to the sale of your business).
  • If your superannuation balance is below $500,000, you may wish to use the unused concessional cap provisions that enable you to use up the caps from prior years where you previously haven’t maximised your contributions.  We have discussed this in more detail here.

Action

If you want to make additional concessional superannuation contributions in the current financial year, we recommend that you:

  1. Talk to us about the maximum concessional contributions you can make in the current financial year; and
  2. Talk to your financial adviser about whether additional contributions are right for you and your personal wealth creation plan.

Non-concessional (undeducted) superannuation contributions cap increasing to $110,000

The non-concessional (undeducted) superannuation contribution cap is increasing from $100,000 to $110,000 from 1 July 2021.

The increase in this caps means that you may be able to contribute up to $110,000 into superannuation in one financial year (which is not deductible).  You may also be eligible to use the 3 year bring forward rules to contribute 3 years in one year (so $330,000 in one financial year).

Planning opportunities

There may be some planning opportunities available to you:

  • If you are looking to contribute more into superannuation, the increase in the caps means that there is an increase in the 3 year bring forward balance.  If you trigger the 3 year bring forward rules before 30 June 2021, the total is $300,000.  If you trigger the 3 year bring forward rules after 1 July 2021, the total is $330,000.

Action

If you want to make additional non-concessional superannuation contributions in the current financial year, we recommend that you:

  1. Talk to us about the maximum non-concessional contributions you can make in the current financial year; and
  2. Talk to your financial adviser about whether additional contributions are right for you and your personal wealth creation plan.

Company tax rate decreasing to 25% for base rate entities

For base rate entities (entities with a turnover of less than $50 million and 80% or less passive income), the company tax rate will decrease from 26% to 25%.

Tips and Traps

Some tips and traps to be aware of with a decreasing company tax rate:

  • Deferring income from the 2021 to the 2022 financial year will result in a lower tax liability due to the decreasing tax rate.
  • Similarly, bringing deductions forward from the 2022 financial year to the 2021 financial year will increase the tax effect of these deductions.
  • However, franked dividends will only be able to be paid at the prevailing company tax rate.  So dividends paid after 1 July 2021 can only be franked at the company tax rate of 25% (even where the underlying tax was paid at a higher tax rate).

Superannuation – transfer balance cap increasing to $1.7 million

The transfer balance cap for superannuation is increasing from $1.6 million to $1.7 million from 1 July 2021.

The transfer balance cap is a lifetime limit on the total amount of superannuation that can be transferred into a superannuation pension (and therefore generate tax-free earnings).

If you have previously utilised the whole of the $1.6 million cap when establishing your pension accounts, you cannot take advantage of the $100,000 increase.

Single touch payroll

Closely held payee exemption ceases

The single touch payroll reporting exemption for closely held payees ceases on 30 June 2021.  From 1 July 2021, small employers with closely held employees can report payments to these employees using single touch payroll every payday or every quarter.  If these employers have other payees (ie. arm’s length employees), payments to these arm’s length employees must be reported to the ATO using single touch payroll every pay day.

Micro employers quarterly concession ceasing

Up to 30 June 2021, micro employers had a quarterly reporting concession which enabled them to report their payroll data quarterly through their registered tax or BAS agent.  From 1 July 2021, only micro employers experiencing “exceptional circumstances” will be eligible for the concession. 

Our comment

Generally, from 1 July 2021, all employers will now be required to report their payroll data to the ATO via single touch payroll every pay period.  You need to ensure your systems are setup to enable this reporting.  Please contact us if you need advice regarding any changes to your payroll systems to enable STP reporting.

Minimum wages to increase by 2.5%

Following the Annual Wage Review 2021, the Fair Work Commission have announced a 2.5% increase to the national minimum wage (to $772.60 per week or $20.33 per hour).  It will apply to anyone who is paid minimum award wages or the national minimum wage.  The new national minimum wage will apply from 1 July 2021 but will happen in 3 stages.  Most awards will increase from 1 July 2021.  Wages in the Retail Award will increase from 1 September 2021 and other awards affected by exceptional circumstances will increase from 1 November 2021.

Refer to the Fair Work website for more information and/or contact your relevant HR adviser for advice regarding the impact of this wage increase on your employees: https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/annual-wage-review-2021


 

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.

New Business Grants in Queensland

The Queensland Government have recently announced new grants 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:

  • have fewer than 20 employees at the time of applying for the grant;
  • 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: 31 May 2021
  • Closes: When funds are exhausted or 30 June 2021 (whichever is first)

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

Business Growth Fund – $50,000 to purchase specialised equipment

The Business Growth Fund provides businesses with a single upfront payment of $50,000 (excluding GST) to buy specialised equipment.

Businesses that receive the grant are expected to:

  • increase confidence for growth, transitioning from small to medium-sized
  • increase productivity, turnover, profit and employment by 20%
  • improve confidence to automate, scale up, increase market share, diversify and/or exploit exporting opportunities.

Key details:

  • Funding available: Up to $50,000 (excluding GST)
  • Applicant commitment: To fund at least 25% of project costs to buy and implement the specialised equipment
  • Opened: 11 May 2021
  • Closes: When funds are exhausted

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

Small Business – Business Boost Grant – $15,000

The Small Business – Business Boost Grant is set to open mid-July 2021.

For more details go to: https://www.business.qld.gov.au/starting-business/advice-support/grants/schedule


 

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.