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COVID-19 and residential rental property claims

30 August 2020

Many residential rental property owners have had their rental income affected by COVID-19. As a result of this income year not being business as usual, the ATO has provided answers to some typical scenarios that may crop up in this area for tax time.

Q: If tenants are not paying their full rent of have temporarily stopped paying rent as their income has been affected due to COVID-19, can a property owner still claim deductions on their rental property expenses?

A: Yes. If tenants are not meeting their payment obligations under the lease agreement due to COVID-19 and you continue to incur normal expenses on your property, then you will still be able to claim these expenses in your tax return.

Continue reading “COVID-19 and residential rental property claims” →

JobKeeper Update – Change to Eligible Employee Start Date

18 August 2020

It was much quicker than we anticipated, but the ATO have now released guidance on changes to the current JobKeeper program relating to ‘employee eligible dates’ which needs urgent consideration from employers.

From the 3rd of August, the reference date for an employee’s eligibility to JobKeeper payments changes from 1st of March to 1st of July 2020. Employers now need to consider the eligibility of employees who were employed at 1st July 2020.

There is no change for existing employees who were already eligible for the JobKeeper program, nor is there any change to an employer’s existing eligibility to the JobKeeper program.

Which employees may now be eligible?

For the JobKeeper fortnight beginning 3rd August 2020, there are a number of employees who may now be eligible as at the 1st July 2020 including;

  • New staff who started after 1st March 2020
  • Casuals who have, since 1st March 2020, met the definition of long term casual employees
  • Employees who were not eligible due to their age
  • Employees who may hold an eligible visa

Other circumstances to review and consider 

  • Employees who may have nominated for JobKeeper with another employer, under limited circumstances can re-nominate with a new employer as long as they have ceased their employment with the original employer between 1st March 2020 and 1st July 2020
  • An employer who was previously ineligible for JobKeeper, still has the ability to test their JobKeeper eligibility in the months of August and September. Eligible employees may include employees who started prior to 1st July 2020

Action Items 

  • Review your existing employees and business participants who were not previously eligible for JobKeeper to determine if they are now eligible
  • Provide those employees with an employee nomination form ASAP. The ATO has updated this form and you can find it here
  • Calculate any shortfalls required for employees whose pay is required to be ‘topped up’ to $1,500 per fortnight. Note: the full time and part-time rates only apply for JobKeeper 2.0 which begins 28th September 2020
  • Payment of any top up is required by 31st August 2020 in respect of the JobKeeper fortnights 3rd August – 16th August 2020 and 17th August – 30th August 2020

‘One in – All in’ principle still applies 

  • Remember the ‘One in – All in’ principle continues to apply
  • If you are already a participant in JobKeeper you need to provide employee nomination forms to those employees who may now be eligible
  • You do not have discretion to exclude employees

If we can assist with the above or any other matters, please do not hesitate to contact us at admin@nulli2advisory.com.au or 08 8132 6400.

COVID-19 – JobKeeper program update

14 August 2020

JobKeeper 1.0 Reminder

For those currently registered in the JobKeeper program

For the month of August 2020 please be mindful that there are 3 fortnights for the purposes of the JobKeeper program. What does this mean?

For the month of August, eligible employees are required to each be paid at least $1,500 in each of the 3 fortnights that fall in the month of August (a total of at least $4,500 Gross Wages).

Please see below the JobKeeper fortnights affecting the month of August through to the end of September under the original JobKeeper program.

JobKeeper fortnights (up until 27 September)

For those not currently registered in the JobKeeper program

To claim JobKeeper payments for the August JobKeeper fortnights, you must enrol for JobKeeper and identify your eligible employees by 31 August 2020.

If you require assistance assessing your eligibility to these payments and and/or your business has become eligible for the month of August, please contact this office.

JobKeeper 2.0 Update

There are many questions regarding the ins and outs of JobKeeper 2.0. We are awaiting further commentary from the Australian Taxation Office (“ATO”) with parliament due to next meet on the 24 August 2020 to discuss this further. Hopefully we will see further information in the coming weeks.

Further changes were announced on 7 August 2020 to adjust the reference date for an employee’s eligibility and make it easier for organisations to access JobKeeper payments in light of the further restrictions in Victoria. From 3 August 2020, the relevant date for employment will move from 1 March to 1 July 2020.

Some of the implications of these changes are;

  • If you have had new staff which started after 1st March 2020 but prior 1st July 2020, who were ineligible for the original JobKeeper 1.0, may now be eligible for JobKeeper;
  • If you have long-term casuals whose 12 month anniversary of employment fell between 1st March 2020 and 1st July 2020 may now be eligible for JobKeeper;

The ATO have yet to release guidance regarding these points and the implications for our clients.

At this early stage we recommend clients;

  • Collate details of their employees, who were not previously eligible at 1st March 2020, for eligibility as at 1st July 2020;
  • Collate employees hours of work in the four weeks prior to 1st March 2020 and 1st July 2020;
  • In mid to late September 2020 we encourage clients have their books up to date. It maybe a tight turnaround between determining eligibility, enrolment and paying employees, as the first JobKeeper fortnight under JobKeeper 2.0 starts 28th September 2020.

A very useful infographic, which we would recommend reviewing, of the extended JobKeeper program can be found on the Chartered Accountants website here.

If we can assist with the above or any other matters, please do not consider to contact us at admin@nulli2advisory.com.au or 08 8132 6400.

JobKeeper 2.0

23 July 2020

The Government has announced their plan for the extension of the JobKeeper program.  The impact on businesses and the economy of the program finishing on the 27th September has been a concern for many, especially with the rise of COVID-19 infections in the eastern states.  The changes announced will hopefully assist businesses to prepare for the end of the program and plan their future with some certainty.

Highlights include:

  • There will be no changes to the JobKeeper payments that businesses are receiving between now and 27 September 2020
  • The program has been extended until 28 March 2021
  • There will be new eligibility criteria for businesses to access JobKeeper from 28 September 2020
  • From 28 September 2020 the JobKeeper payment will become a “two-tiered” payment

No changes to the original JobKeeper

Businesses that have qualified for JobKeeper will continue to receive the payments based on their initial qualification.  Businesses will be required to continue to complete the Monthly Business Declarations and to ensure eligibility of employees e.g. not claiming JobKeeper when employees leave their employment.  Businesses are also still eligible to enter the program based on the current rules.

The current payment of a flat rate of $1,500 per fortnight per employee will not change before 28 September 2020.

From 28 September 2020

From 28 September 2020, businesses will be required to reassess their eligibility to continue to access JobKeeper.  To be eligible, businesses will be required to show an actual reduction in turnover of 30% or more for both the June 2020 quarter and the September 2020 quarter when compared to the same quarters in 2019.

Note the reference to actual results, as opposed to the previous criteria which were based on projected turnover. Furthermore, testing is now only based on quarterly results, as opposed to the previous criteria which allowed testing on either monthly or quarterly periods.

All other eligibility criteria remain the same – e.g. employees were full-time, part-time or a long-term casual employee as at 1 March 2020.

From this date, JobKeeper payment rates will become a two-tiered payment system:

  • $1,200 per fortnight for employees or eligible business participants who worked more than 20 hours per week on average in the 4 weeks prior to 1 March 2020 (i.e this is effectively the month of February 2020); or
  • $750 per fortnight for all other employees or eligible business participants

From 4 January 2021

From 4 January 2021, businesses will again be required to reassess their eligibility to continue to access JobKeeper to the close of the program on 28 March 2021.  To be eligible for this quarter, businesses will be required to show an actual reduction in turnover of 30% or more for the June, September and December quarters. The 30% reduction must be shown in all three quarters to continue to be eligible for JobKeeper from this date.

The JobKeeper payment rates will reduce again at this point:

  • $1,000 per fortnight for employees or eligible business participants who worked more than 20 hours per week on average in the 4 weeks prior to 1 March 2020 (i.e this is effectively the month of February 2020); or
  • $650 per fortnight for all other employees or eligible business participants

Will my business be eligible for JobKeeper 2.0?

Use the following flow chart to determine if you are eligible:

If you are currently eligible for Jobkeeper payments, you must continue to lodge your Monthly Business Declarations for July, August and September and the current payments will continue.

Overall the announcements are welcome and will help provide businesses with some certainty.  With increased testing required for JobKeeper 2.0 it may prove more difficult for businesses to meet the eligibility criteria, as our economy begins to get back to normal. Continue to monitor your turnover against last year’s turnover going forward to ascertain eligibility and therefore access to JobKeeper 2.0 when cash flow planning. As always, i2 Advisory are here to assist in determining your eligibility and ensuring your reporting requirements are met on time.

Should you require any further information, please contact our staff on 8132 6400 or via email on admin@nulli2advisory.com.au.

Tax return tips

11 July 2020

Despite the current COVID-19 world in which we live, the procedures for completing and lodging tax returns remains pretty much the same.

So, before we sit down with you to go over your tax return, certain information will be needed. Of course these days pre-filling takes care of a lot of the “paperwork”, and if you wait until late-July or mid-August the ATO’s systems will most likely be able to provide most of the information from employers, banks, government agencies and other third parties.

We will then be able to double-check the information is correct and enter any deductions you want to claim. However to be thorough, before coming in for your tax appointment here are the sorts of information needed to enable us to complete your tax return.

Continue reading “Tax return tips” →

Update regarding the JobKeeper program and SA Government Grant

1 June 2020

This is a reminder for any businesses that are either currently enrolled in the JobKeeper program, or may wish to consider registering if their business is now eligible.

For those currently registered in the JobKeeper program

A declaration is required to be lodged each month so you can receive your JobKeeper payment.

The important dates to remember for the May declaration are:-

  • 1 June 2020 – May declaration process is open
  • 14 June 2020 – May declaration must be completed

You will need to declare the following:-

  • Your actual GST turnover for the month of May
  • Your projected GST turnover for the month of June
  • Confirm that the employees/business participants nominated remain eligible to receive the JobKeeper payment
  • That your bank details have not changed

The May declaration is now open via the Business Portal/your tax agent. If i2 Advisory are to lodge the above details on your behalf, we will be in contact shortly to assist you to collate the above information.

For those not currently registered in the JobKeeper program

Please review your figures and discuss the program with your accountant to see if you are now eligible for the program. Just because you have not registered to date, does not mean you won’t ever be able to. Currently, registrations can be entered into up until the end of the program on 27 September 2020.

South Australian Government Small Business Grant – $10,000 Emergency Cash Grant

If you are not currently registered for this grant, and you may be eligible, please get in contact with us as a matter of urgency as registrations close today, 1 June 2020. Further information about the eligibility criteria or the grant can be found here.

If we can assist with the above or any other matters, please do not consider to contact us at admin@nulli2advisory.com.au or 08 8132 6400.

Disclaimer
All information provided in this article is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently.
We recommend that our formal advice be obtained before acting on the basis of this information.

South Australia Land Tax Changes – Recent Letters

16 May 2020

In case you forgot in all the craziness and uncertainty of the past few months, changes to land tax come into effect on 30th June 2020 and many South Australians will be affected.

Revenue SA have recently begun the process by sending out letters to landholdings with both Companies and Individuals on their titles. Letters for Company’s appear to have been received by the Company either as ‘head of a Corporate group’ or as a single land holder.

The letters are an information gathering exercise to advise and confirm to Revenue SA:

  • if an Individual or a Company owns land in its own right or as a trustee of a trust (including Self-Managed Superannuation Funds);
  • if the landholder is a Company in its own right – to disclose if the Company is ‘grouped’ with any other Companies;
  • if the land is held in the following trust structures:
    • Unit Trust – If you wish to disclose the unit holders so the landholding can access the ‘general’ land tax rate;
    • Discretionary Trust – If you wish to nominate a beneficiary, so the landholding can access the ‘general’ land tax rate rather than the potentially higher trust land rates;
  • That all land has been included in your ownership (the ownership of the particular entity – not all of the land a client may hold via different entities);
  • To add any land not included;
  • To advise if land has been included incorrectly;

Important Dates

  • 3rd June 2020 or 11th June 2020 (depending on your letter) – Revenue SA has requested the forms be completed by one of these dates, to allow sufficient time to request further information from your application;
  • 31st July 2020 – is the final date to lodge the forms, assuming Revenue SA have been provided all relevant documentation and have no further questions regarding your holding otherwise penalties and interest may apply to your assessment;
  • Early October 2020 – New land tax assessments to be issued;
  • 30th June 2021 – last day to nominate a beneficiary for your discretionary trust and to advise of a unit trusts unitholders, if you want the general rate to apply for the 2020/21 & 2021/22 financial years;

Important Considerations

  • There are decisions that may need to be made, for example nominating beneficiaries for a discretionary trust and / or declaring the unit holders of a unit trust;
  • These decisions can have long lasting financial and family succession implications;

Can you help me with the letter?

Of course! Please contact your usual i2 adviser to start the process.
i2 Advisory have a client portal to attend to any registrations on behalf of our clients. Please note if you have already registered online, we cannot transfer the application to the i2 Advisory login.

I think I have a handle on it and I want do the registration myself – So what do I need to do?

Please be aware that there are currently some functionality and stability issues with the Revenue SA portal. Some applications may not be able to be completed as the functionality for certain ownerships is not yet available or unclear as to how to complete. Hopefully these will be resolved soon.

Steps common to all ownership types

  • The mail out instructs the landholder to create a login account and complete the required registration via Revenue SA online portal;
  • Confirm client details and addresses;
  • Confirm your landholdings and add any land holdings for the entity that may be missing;

Individuals or Company is trustee of a trust or SMSF

  • For a Company – Advise that the Company landholder is holding the land as trustee of a trust/SMSF;
  • For an Individual – Advise that the Individual landholder/s are holding the land as trustee of a trust/SMSF;
  • Breathe deep as you may need to dive deep into the filing cabinet;
  • Provide and upload evidence of the trust/SMSF’s ownership of land (see further details below);
  • If ownership is in a discretionary trust and you wish to nominate a Beneficiary (see further details below);
  • If ownership is in a unit trust and you wish to disclose the unit holders (this functionality does not appear to be complete on the Revenue SA portal as yet);

Evidence that the Trust or SMSF is the owner of the Property
You can provide either 1 or 2 below

  1. a copy of the Memorandum of Transfer showing the consideration was paid by the trust or on behalf of the trust
    If you do not have the memorandum of transfer you can order a copy at https://sailis.lssa.com.au/home/auth/login or if you have a friendly conveyancer, ask them;
  2. a copy of the most recently completed and lodged Tax Return for the trust, clearly showing the land as an asset of the trust;

If you cannot access a copy of the memorandum of transfer or it does not disclose the consideration being paid by the trust’ or if your tax return does not disclose the relevant details, you MUST provide a minimum of 2 other types of evidence, which may include:

  1. Memorandum of Transfer for the purchase of the land, showing “with no survivorship” or “WNS”;
  2. Title showing “with no survivorship” or “WNS”;
  3. Signed Minutes of Trust Meeting (or similar), evidencing/discussing the purchase of the land on behalf of the trust;
  4. Balance Sheet of the Trust, showing the parcel of land as an asset of the trust;
  5. Settlement Statement for the purchase of the trust, showing the purchaser (you) as a trustee of the trust;
  6. Signed Contract of Sale for the purchase of the land, showing the purchaser (you) as trustee of the trust;

It is important that evidence:

  • be provided for each parcel of land that is held on Trust; and
  • clearly state the Trust name and either the property address or Certificate of Title reference;

Evidence of the existence of the Trust

  • a copy of the original executed Deed of Trust in its entirety; and
  • a copy of each Deed of Variation, where there have been variations or amendments made to the original Deed of Trust since its execution;

Nominating beneficiaries
For a trust to access the general land tax rate rather than the higher trust surcharge rate, the trust must nominate a beneficiary.

The registration form has an option for nominating a beneficiary of the discretionary trust where the land was held prior to 16th October 2019. The reality is that you have some time to provide this information – until the 30th June 2021.

Our advice is not to rush this decision, as in the majority of cases this is a permanent and once only decision. The nominated beneficiaries must sign a statutory declaration that they agree to be nominated and understand the implications.

We suggest providing the requested information confirming the trusts ownership and existence and then seeking advice as to the implications of nominating a beneficiary. An application can be completed on this basis, with a separate application being completed at a later date nominating a beneficiary if this is applicable.

The landholder is an Individual in its own right

The landholder need only advise that the land is not held on trust and the contact details.

The landholder is a Company in its own right

For a company that holds land in its own right the process is less onerous than that of a trustee.

The Group Head is the corporation who will receive correspondence and Notices of Assessment from Revenue SA on behalf of the whole group of corporations. They are also responsible for updating and confirming the related corporations in Revenue SA Online. The corporation head has been determined as the most recently registered corporation that holds land in South Australia.

If you have received a letter as the nominated group head you can also:

  • Nominate a different corporation to complete the review of the corporate group
  • Confirm that all related corporations have been included in the corporate group
  • Add any related corporations that have not been included
  • Advise where Revenue SA have included corporations incorrectly

It is important that all related companies are included and that all land holdings have been disclosed in the registration process as penalties may apply.

Where can I find out more?

The above is our understanding as at 14th May 2020.

Further Information regarding the land tax rules and the registration process can be found at:
https://www.revenuesa.sa.gov.au/services-and-information/revenuesa-online/land-tax-reform-changes
https://www.revenuesa.sa.gov.au/taxes-and-duties/land-tax/land-tax-changes

If you would like to discuss this further, please don’t hesitate to contact your i2 adviser.

Update on COVID-19

6 May 2020

JobKeeper

  • Enrolments for April and May 2020 – you have until 31 May 2020 to enrol. However, please note you only have until 8th May 2020 if you need to ‘backpay’ staff for April 2020 to the minimum $1,500 amount per fortnight required (see below table)
  • The next step in the JobKeeper process for identifying eligible employees and business participants is now open. This step needs to be completed in order to receive any subsidies you may be entitled to and includes:-
    • Identifying eligible employees and business participants
    • Stating your April 2020 turnover and your May 2020 projected turnover
    • Confirming information the ATO already have on hand from the enrolment process
  • If after lodging this step of the JobKeeper payment process, you do not receive the first payment from the ATO in a timely manner (a week at most), please contact us as there may have been issues with verifying your application. A monthly declaration will be required on an ongoing basis until the JobKeeper period has finished (September 2020).
  • Please find below a very useful table regarding the timing of payments for those eligible for the JobKeeper Scheme:-
JobKeeper fortnight Period relating to each JobKeeper fortnight Employees are paid on or before:
1 30 March – 12 April 8 May
2 13 April – 26 April 8 May
3 27 April – 10 May 10 May
4 11 May – 24 May 24 May
5 25 May – 7 June 7 June
6 8 June – 21 June 21 June
7 22 June – 5 July 5 July
8 6 July – 19 July 19 July
9 20 July – 2 August 2 August
10 3 August – 16 August 16 August
11 17 August – 30 August 30 August
12 31 August – 13 September 13 September
13 14 September – 27 September 27 September

Please note eligible business participants are not required to have the JobKeeper payment paid to them from the business.

If you have any queries, please do not hesitate to contact us on (08) 8132 6400 or admin@nulli2advisory.com.au

Update on Timeframes for Government Assistance

24 April 2020

Cash Boost

  • No action required – this will occur upon lodgement of your March to June 2020 BAS’. The first tranche will be between $10K and $50K.
  • The 2nd tranche will also automatically occur over the lodgements of your June to September 2020 BAS’ and will match the 1st tranche in amount.

JobKeeper

Immediate

  • Assess your business’s eligibility for JobKeeper payments by contacting your i2 Advisory accountant for assistance or alternatively reviewing your eligibility here

From now but by 30 April 2020* (the earlier the better)

  • Enrol for JobKeeper payments via the ATO Business Portal
  • Should you not have access to the ATO Business Portal or require assistance with the registration please contact your i2 Advisory advisor for assistance.
  • As per the ATO as at 23 April 2020, to ensure you receive your JobKeeper payments as early possible, you should enrol by the end of April.

By 30 April 2020

  • Communicate with each eligible employee and request they complete the employee nomination form and return it to you.
  • Make top up payments to employees (where necessary).
  • Identify your eligible employees via your STP enabled payroll software

From 4 May 2020

  • Complete information for your specific eligible employees in the online application form (yet to be provided) on the ATO Business Portal or via i2 Advisory.

Ongoing (each month)

  • Reconfirm your reported eligible employees have not changed through ATO online services, the Business Portal, or via your i2 Advisory advisor
  • Complete your ongoing monthly reporting requirements, known as ‘Monthly JobKeeper Declaration Report’ via the ATO Business Portal or your accountant.
  • Continue paying eligible employees the minimum fortnightly amount by the relevant date for that period.

State Government Grant

  • If you are an employer and eligible for JobKeeper you should be entitled to a $10,000 grant from the SA Government
  • Registrations are now open and if eligible, we recommend registering immediately using the following link

Please do not hesitate to contact us for further information on (08) 8132 6400 or admin@nulli2advisory.com.au. We are doing everything we can to assist you and your business be in a position to bounce back and take advantage of any possible business opportunities that may present themselves as we start to resume normality.