FREE Coaching & Half Price Budgets

Hi everyone,

I hope this finds you well.

With all of the work we have been doing of late with the stimulus packages we are keen to do a bit more. We have come up with a couple of things we believe are very important at this time.

First thing:

This is something we believe will also add great value to you and it is our Global Business Coaching division.

We are keen to work with you to get you through this 1 in 100 year event and we believe we can get you being as strong as possible post Covid-19

What we are offering is our coaching service for FREE.

So this is your opportunity to test drive some coaching from a trusted advisor with absolutely NO RISK to you.

We are looking for groups of 15 business to participate in a 6 week “Test Drive” of our on-line group coaching program – that’s over 9 hours of business coaching for FREE.  That is $2,700 of value for FREE. This is our way of giving something over and above back to our business clients and friends.

If you have a good business that is still operating like normal or near normal or one that has dropped 30% or so or one that is struggling to survive or you can’t be open during this crisis then this is for you. So this is for anyone looking to have a better business and in turn a better life.

So if you…

• Are a business owner
• Are usually profitable (most of us aren’t during the COVID-19 crisis, that’s why this program will help with)
• Have a desire to see your business survive this crisis and prosper in the recovery
• Have at least 3 hours a week to work on your business
• Are friendly, coachable and open to trying new things

Want to find out more about our “Test Drive” program? Respond to jtsoulos@indigofinancial.com.au with the word “interested – coaching” and we will take care of the rest.

Click below to view our lead coach Alan work through the Framework we are using for Businesses to Respond to this Covid – 19 pandemic.

https://www.dropbox.com/s/gg5hiv65comwa1g/Video%201%20COVID19%20Biz%20Response.mp4?dl=0

Look forward to hearing from you as soon as possible so we can lock you in.

P.S. Get in early as places are limited.

Second thing:

We know how important it is to know where you are going in regards to your numbers. It is even more important in times of uncertainty. Businesses often get in trouble because they are not looking at their numbers and like we say – “they are not measuring and managing”. We have prepared a number of budgets recently for people and they have since said to us that the budgets have been one of the most important things they have done in their business.

Without budgets how do you know:

• What the impact of a 10%, 20% or 30% etc reduction in revenue will do to your cash position
• What impact the Governments stimulus packages have to your cash position
• How will your business be impacted if your debtors pay slower than they are now
• How long can your business survive with the cash balance you have at the moment
• When to be speaking with your bank for more funding etc
• What impact stopping loan repayments will have
• And much more

Budgets normally start from $3,300 and intricate budgets can be much more than that. What we are keen to offer, as we know how important they are and how difficult it currently is, is budgets at 50% of the base rate. So we would complete budgets for you and your business at only $1,650. A budget can be the difference between knowing how much money you have available and running out of money without knowing.

So, if you are interested in having budgets prepared please respond to jtsoulos@indigofinancial.com.au with the word “interested – budgeting” and we will take care of the rest.

Take care and talk soon,

From the team at Indigo Financial.

To all our valued clients and friends of Indigo Financial and Global Business Camps.

We have a number of newsletters that we have sent out recently on all of the stimulus packages. Please go to https://www.indigofinancial.com.au/news/ to view these and more.

We encourage you to contact our office on 08 8212 8585 or via email inquiries@indigofinancial.com.au. We are here to assist you through these stimulus package measures and much more.

Thank you to our clients and friends who have already and continue to contact our office regarding these measures.

If you have not contacted our office and require clarification, re-assurance or need assistance, please contact us either by telephone or e-mail so that we can assist you.

Note as many of the measures are based on lodging your March, monthly or quarterly, PAYG Withholding; our office can assist in:

• Completing and lodging the BAS and PAYG Withholding statement
• Reviewing and confirming your figures before your lodgement
• Confirming the reduced BAS amount to pay (or refund expected), due to these measures

$1,500 JobKeeper subsidy to keep staff employed

Eligibility:To be a part of the subsidy, employers will need to ensure that their employees receive at least $1,500 per fortnight (before tax). See the example below.A subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses over $1bn).

 There are two levels of eligibility; for employers and employees.

Eligible employers are those with:

• Turnover below $1bn that have experienced a reduction in turnover of more than 30% relative to a comparable period 12 months ago (of at least a month); or
• Turnover of $1bn or more that have experienced a reduction in turnover of more than 50% relative to a comparable period 12 months ago (of at least a month); and
• Are not subject to the Major Bank Levy.

Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.

Eligible employees are those who:

• Were employed by the relevant employer at 1 March 2020; and
• Are currently employed by the employer (including those who have been stood down or re-hired); and
• Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March); and
• Are at least 16 years of age; and
• Are an Australian citizen, hold a permanent visa, are a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
• Are not in receipt of a JobKeeper Payment from another employer.

While it appears that businesses without employees can potentially qualify for JobKeeper Payments, it is not clear at this stage what conditions will need to be satisfied.

How the support is calculated:

 The ATO will administer this program and will make the $1,500 payments based on payroll information. The payments will be made monthly in arrears, so it is essential that you ensure your business and your employees continually meet the eligibility criteria.

The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the relevant employer.

How the support is provided:

 To access the JobKeeper subsidy, you should talk to your accountant or adviser to assist you with the registration process and calculations.

If you want to manage the process yourself, you must:

• Register
  • Applications are not yet open. However, you should register your intent to apply for the JobKeeper subsidy with the ATO (here). The ATO will provide you with regular updates and advise you when you can lodge your application
• Assess turnover
  • Ensure you have an accurate record of your revenue for the 2018-19 income year and for the 2019-20 year to date
  • Ensure you keep an accurate record of revenue from March 2020 onwards
  • Compare your revenue for the whole of March 2019 with the whole of March 2020
  • Measure the % decline in your revenue and ensure it has declined by more than 30%
  • If you are not eligible in March, you may become eligible in another month
• Identify eligible employees
  • Nominate the employees eligible for the JobKeeper payments – you will need to provide this information to the ATO and keep that information up to date each month. The ATO will use Single Touch Payroll to prepopulate the information in most cases.
  • Notify all eligible employees that they are receiving a JobKeeper payment. Employees can only be registered with one employer.
  • Pay eligible employees at least $1,500 per fortnight (before tax). If an employee normally receives $1,500 or more per fortnight before tax the employee should continue to receive their regular income. Note: It is unclear at this stage if the employer must continue to pay their employee the same salary if it was more than the subsidy amount.
  • Pay superannuation guarantee on normal salary and wages amounts paid to employees. If the employee normally receives less than $1,500 per fortnight before tax, the employer can decide whether to pay superannuation on the additional amount that is paid as a result of the JobKeeper program.

Sole traders and the self-employed can register their interest in applying for the JobKeeper payment with the ATO. These businesses will need to provide an ABN for the business, nominate an individual to receive the payment, provide the individual’s TFN and declare their continued eligibility for the payments. Payments will be monthly to the individual’s bank account.

Fact Sheet links:

JobKeeper Payment – Supporting businesses to retain jobs

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_supporting_businesses_4.pdf

Information for Employers:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf

To register your interest, please visit the Australian Taxation Office.

Information for Employees:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employees_0.pdf

Some more details From 9 News

JobKeeper Payment questions: Here is exactly who is eligible

I was stood down by my employer two weeks ago because of COVID-19. Am I eligible for the payment?

 Yes you are. The JobKeeper payment includes the many thousands of hospitality and retail workers who have been forced to be stood down by their employers because of social distancing restrictions.

Technically, all workers – including those stood down – are eligible if they were employed by their employer as of March 1, 2020.

 I wasn’t stood down, but my company re-hired me as a part-time worker to save cash. Am I eligible?

Yes you are. The payment includes those who had to be re-hired as a result of business downturn because of COVID-19.

I’ve been a casual employee over summer and I have lost my job. Am I entitled to the JobKeeper payment?

No. Only long-term casual employees are eligible.

This means you will have to have been employed on a casual basis for more than 12 months as of March 1, 2020.

 I was earning less than $1500 a fortnight before the coronavirus hit. Does that mean I’ll only get my normal wage?

Good news: if you are eligible, you will get the $1500 a fortnight regardless of how much or how little money you were making. It is not portioned based on your salary.

The JobKeeper payment is a minimum, and some employers may pay on top of that.

I’m employed by multiple businesses. Does this mean I will get multiples of the payment?

 No. Each eligible Australian will get only one JobKeeper payment. If you have multiple employers, you must notify your primary employer of your intention to claim the payment.

The majority of employees won’t need to do anything to receive the payment.

 I’m a self-employed tradie, am I eligible for the payment?

 It depends. All employers – from self-employed individuals to charities to mega corporations – need to meet the criteria for the JobKeeper payment.

The criteria is simple: if you have a business with a turnover of less than $1 billion and your turnover has been reduced by more than 30 per cent as a result of COVID-19, you are eligible.

If you have a turnover of more than $1 billion (you’re a bloody good tradie!) then your turnover will have needed to be reduced by more than 50 per cent as a result of the virus.

If I’m self-employed will the payment come automatically to me?

 No. If you are self-employed and run a business without any employees, you will need to register your interest for the payment via the Tax Office’s website.

You’ll need to provide an ABN, nominate an individual to receive a payment and have a tax file number ready.

Some more details from ABC News

 Affected by coronavirus and need to apply for JobKeeper or JobSeeker payments? Here’s what you need to know

The Federal Government’s wage subsidy plan will help more than 6 million people who have seen their income fall because of the coronavirus pandemic.

The JobKeeper scheme gives affected businesses $1,500 per fortnight per employee to help pay the wages of an estimated 6.7 million Australians for six months.

But if you’re confused about which payment you’re entitled to (JobKeeper or JobSeeker), we’ve broken it down for you.

First, let’s recap. To be eligible for the JobKeeper payment you need to meet all these conditions:

• You are currently employed (including those stood down or re-hired) by an eligible employer;
• You were employed by the employer at March 1, 2020
• You are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at March 1, 2020)
• You are at least 16 years of age
• You are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa holder, a non-protected Special Category Visa holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa holder
• You are not in receipt of a JobKeeper Payment from another employer.

What if I’ve been stood down?

If you have been stood down since March 1, you are eligible for the JobKeeper payments. Your company will need to sign up for the wage subsidy scheme in order for you to receive them.

However, if there’s no chance of you being re-hired — if your employer can’t reopen their business under the lockdown restrictions — then you’ll need to apply for the JobSeeker payment.

This will also be the case if your company doesn’t sign up for the scheme.

We have a step-by-step guide here on how to apply for JobSeeker.

If you are self-employed you will need to register your interest in applying for the JobKeeper payment via the Australian Taxation Office (ATO).

Remember, if you receive the JobKeeper payment, this will qualify as income when it comes to calculating any other payments you might be receiving.

What if the company closes and I’m laid off?

If the company shuts its doors and you’re made redundant or fired, you’ll have to apply for JobSeeker.

For the next six months, this will be boosted by the Coronavirus Supplement, which effectively doubles your payments.

What if my hours have been cut down but I’m still working?

Again, this depends on whether your employer applies for the wage subsidy.

Assuming they did apply, to receive the JobKeeper payment you must be a full-time or part-time employee or a long-term casual — meaning you had been employed on a regular basis for longer than 12 months as at March 1.

Treasurer Josh Frydenberg told the ABC’s 7.30 program that because of the one-year minimum, “there will be casuals who are not eligible for the JobKeeper supplement”.

“What they will do is go on to the JobSeeker supplement, which is available to them at $550 on top of the old Newstart or JobSeeker payment.”

However, you’ll need to meet the income tests to receive JobSeeker, and your partner’s income will also be factored in.

VIDEO: Treasurer Josh Frydenberg said the JobKeeper scheme would benefit the hardest-hit sectors. (7.30)

What if I’ve already applied for JobSeeker? Or I’m entitled to both?

The Federal Government has encouraged Australians not to withdraw their applications for Centrelink benefits, if they think they’re eligible for wage subsidies instead.

Assistant Treasurer Michael Sukkar said the Government would work out which one they should receive.

“The ATO, Services Australia, where there are applications for both, obviously work out administrative arrangements to ensure that those individuals get the JobKeeper payment,” he said.

“And at that point in time, all of the other applications will be removed.

“So, I would caution them not to withdraw an application at this point in time.”

You can’t be paid both JobSeeker and JobKeeper — it’s one or the other.

What about workers who earn less than the JobKeeper payment?

The JobKeeper payment is the same for everyone, no matter how much they earn. It’s the equivalent of 70 per cent of the median wage.

For industries hit hard — such as hospitality, retail and tourism — the Government says it’s the same as the median wage.

So even if you earn less than $1,500 a fortnight, you will receive the full payment if you’re eligible.

If you usually earn more, the Government hopes for businesses to top up employees’ earnings to bridge the gap.

As more news comes through we will update you.

Stay safe and talk soon.

John, Nathan and the the Team at Indigo Financial

Hi everyone,

Please look through these links and click on the ones that relate to you:

Banks and initial correspondence on how they can help – https://www.abc.net.au/news/2020-03-26/are-banks-freezing-mortgages-banks-putting-payments-on-hold/12090642.

Please read it carefully to make sure you understand that this is a deferral and not a free period. It will however be very helpful. You should be contacting your bank and any other financing companies now to discuss options.

Income support for individuals – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf

Please read how to apply on line and also there are a couple of great examples on how the benefits apply.

Early access to super – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

Please read as to how you are able to access your super and what is the criteria you need to meet. Once again a couple of very good examples.

Support for Businesses – https://treasury.gov.au/coronavirus/businesses

• Boosting cash flow for employers Fact Sheet – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf
• Temporary relief of financially distressed businesses Fact Sheet – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf
• Increasing instant Access write-off and Backing business investment Fact Sheet – https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf
• Supporting apprentices and trainees – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

Quick and efficient access to credit for small business ($250,000) – https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf

State Based Relief:

The following is a summary of key relief incentives released by the NSW government and the City of Sydney.

NSW Stimulus 

• 2021 payroll tax threshold to be increased to $1 million.
• Waiver of payroll tax for the final 2020 June quarter for businesses with payrolls of up to $10 million.
  How to apply: Automatic, expected to be applied to the next monthly return.
• Fast track of the next round of payroll tax cuts will raise the threshold limit to $1 million for the 2020-21 financial year
  How to apply: Automatic, expected to be applied to monthly returns from 1 July.
• Waiver of some charges and licencing fees for small businesses including bars, cafes, restaurants and tradespeople.
  The NSW State Government are yet to specify eligibility and which fees will be waived.
• $250 million to employ additional cleaners of public infrastructure including public transport and schools as well as bringing forward of maintenance on public assets, bring forward capital works projects.

City of Sydney Council relief package

• Rent relief for eligible tenants.
• Refunds for venue fees and advertising bookings.
• Coverage of costs for aquatic centres so casual workers are paid.
• Waiver of outdoor dining fees and fines for using a footpath without a permit.
• Parking fines will only be issued if there is “an imminent public or environmental health or safety risk”.

For all the latest updates on the NSW stimulus package, please visit preview.nsw.gov.au/Covid-19

Vic Stimulus

Payroll Tax Refunds – Victorian Government

• Full payroll tax refunds up to $113,975 a year for the 2019/2020 year.
• Refunds will start flowing back week commencing 23 March 2020.

Who is eligible and what are the details?

• SMEs with a payroll of less than $3 million.

What do I need to do?

• Automatic
• Refunds will start flowing back week commencing 23 March 2020.

Defer Payroll Tax – Victorian Government

• Defer payroll tax for the first 3 months of the 2020 / 21 financial year until 1 January 2021.

Who is eligible and what are the details?

• SMEs with a payroll of less than $3 million.

What do I need to do?

• Not entirely clear but appears automatic deferral.

Rent relief – Victorian Government

• Commercial tenants in Government buildings can apply for rent relief.

Who is eligible and what are the details?

• Appears available to all tenants for Victorian Government buildings however details are limited.

What do I need to do?

• Not entirely clear but appears you should contact your Victorian government lease contact to negotiate.

Business Support Fund – Victorian Government

• $500 million to establish a Business Support Fund.

Who is eligible and what are the details?

• The Fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.
• The Victorian Government will work with the Victorian Chamber, Australian Hotels Association and Ai Group to administer the fund to help businesses survive and keep people in work.

What do I need to do?

• Link to register interest to understand more https://fs2.formsite.com/diirdwebteam3/u3qeftcfcc/index.html

City of Melbourne Stimulus Package

The City of Melbourne is developing a local economic stimulus package valued at more than $10 million, which will include:

1. A virtual Business Support Summit at Melbourne Town Hall
2. Suspending fees for Food Act registrations and street trading permits for three months
3. Halving rent for eligible tenants in Council owned buildings for three months
4. Opportunities to deploy casual and part-time staff to enhance city cleanliness and amenity
5. Developing a Rates Hardship Policy for consideration by the end of this month

SA Stimulus

Among the new initiatives in the Government’s second stimulus package:

Payroll tax relief (Up to $60 million of savings to business)

• 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million
• Eligible businesses won’t have to pay any payroll tax from April to September
• This measure is expected to assist up to 2,400 businesses and save them up to $84,000 over the six months (average saving $25,000)
• Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus
• Around 4,300 businesses will be able to access this payroll deferral and is expected to increase overall cash flow by around $580 million.

Land tax relief (Up to $13 million in additional savings)

• From July, the Government’s significant land tax reforms will kick in, delivering $189m in savings to investors and landlords over the next three years.
• Under the new measures, individuals and businesses with outstanding quarterly bills for 2019-20 able to defer payments for 6 months (up to 28,000 private land tax ownerships will benefit)
• For 2020-21 Land Tax Transition Fund relief will be increased from 50% to 100% based on existing relief criteria guidelines – saving some investors up to $50,000

Fees and Charges

• Waiver of liquor licence fees for 2020-21 for those hotels, restaurants, cafes and clubs forced to close as a result of new social distancing restrictions

$300 million Business and Jobs Support Fund

• A fund to support individual businesses and industry sectors directly affected by coronavirus, and face potential collapse – and the loss of thousands of jobs – as a result

$250 million Community and Jobs Fund

• A fund to support community organisations, sporting, arts and recreational bodies, non-profit organisations as well as some industry sectors whose operations have been impacted by the coronavirus
• Will also help with training of South Australians seeking new skills and employment and to assist organisations meet increased demand for services including emergency relief.

Cost of Living Concessions (An estimated additional benefit of about $30 million)

• A once-off boost of $500 and bring forward the 2020-21 ‘Cost of Living Concession’ for households who are receiving the Centrelink JobSeeker Payment, assisting those who are unemployed or lose their jobs as a result of the coronavirus restrictions.
• For eligible homeowners, their 2020-21 payment of $215.10 will now become $715.10. Eligible tenants will receive $607.60.

Access to accrued leave for public sector workforce

• If a public servant has a family member who has lost their job and moved onto Commonwealth benefits, they will be able to receive their accrued leave down to a limit of 2 retained weeks (annual and long service leave)

 NT Stimulus

The NT Government has announced its economic response to coronavirus — a $60 million stimulus package aimed at business upgrades and home renovations.

The $60 million stimulus package will be divided into two major portions — a $30 million ‘Home Improvement Scheme’ and a $20 million ‘Business Improvement Scheme’.

The Home Improvement Scheme will provide Territorians who own a home a $6,000 grant for renovations if they contribute $2,000 of their own money. Alternatively, home owners can spend $1,000 to a get a $4,000 renovation grant.

The Government would freeze fees, charges and electricity prices until July 2021 under the scheme.

Under the Business Improvement Scheme, all eligible businesses will receive $10,000 and can receive a further $10,000 if they spend $10,000 of their own cash on business upgrades.”This could include buying new equipment, new shop fit outs and physical changes to attract customers,”

What about local clubs, tourism and the health sector?

The Government has earmarked $5 million for an ‘Immediate Works Grants’ package which will provide grants of up to $50,000 to not-for-profits and community organisations for repairs and renovations. The Government also said it would match dollar for dollar any further money put into renovation works from local organisations

The NT tourism sector, which was already facing uncertainty heading into peak season, was given $2 million from the Government last month to assist with the impacts of coronavirus.

ATO Assistance

The ATO encourages businesses impacted by the coronavirus to get in touch with the ATO to discuss relief options which will be tailored for each affected business. Options available to assist businesses impacted by COVID-19 include:

1. Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
2. Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
3. Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
4. Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
5. Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

But lodgments should be kept up to date all the way through this crisis.

It is likely additional measures will be announced in the future as the COVID-19 crisis continues to change almost daily and governments continue look to assist business and jobs.

We will keep you up to date as we go when new announcements come out.

Stay safe.

John and the Team.

The Second $66.1 bn Stimulus Package: What You Need To Know

The Government yesterday released a second, far reaching $66.1 bn stimulus package that boosts income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws.

The stimulus measures are not yet legislated. Parliament will reconvene on Monday 23 March.

The Prime Minister has warned that there are no “quick solutions” and that business should prepare for 6 months of disruption.

In Summary

Business

• Tax-free payments up to $100,000 for small business and not-for-profit employers. An increase in the previously announced initial tax-free payments for employers to a maximum of $50,000. In addition to this, a second round of payments will be made up to a maximum of $50,000, accessible from July 2020.
• Solvency safety net – temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.
• Access to working capital – Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs.
• Sole traders and self-employed eligible for Jobseeker payment – the eligibility criteria to access income support relaxed for the self-employed and sole traders.
• Temporary relief from some Corporations Act requirements

Individuals

• Early release of superannuation – individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans’ Affairs payments.
• Temporary reduction in minimum superannuation draw down rates – superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21.
• Deeming rates reduced – from 1 May, superannuation deeming rates reduced further to a lower rate of 0.25% and upper rate of 2.25%.
• Supplements increased, access extended and eased – for 6 months from 27 April 2020:
  • A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).
  • A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).
  • Eligibility for access to income support eased to include sole traders and the self-employed, and to those caring for someone infected or in isolation.
  • Waiting periods and assets tests temporarily waived.
• Bankruptcy safety net – temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor from $5,000 to $20,000.

The Government has flagged that additional stimulus packages will be required.

In detail

Support for business

Tax-free payments up to $100,000 for employers

• From: 28 April 2020
• Eligibility: Small and medium business entity employers and not-for-profit entities, with an aggregated annual turnover under $50 million.

The Government has increased the previously announced measures to provide cash flow support to business.

Now, eligible businesses with a turnover of less than $50 million will initially be able to access tax-free cash flow support, with the minimum amount being increased to $10,000 and the maximum amount increased to $50,000 (previously $2,000 to $25,000). However, additional support will be provided in the July – October 2020 period so that eligible entities will receive total minimum support of $20,000 and up to $100,000.

In order for a business to qualify for this support it must have been established prior to 12 March 2020. The rules are more flexible for charities because the Government recognises that new charities might be established in response to the pandemic.

The cash flow support measures will be provided in the form of a credit in the activity statement system. The support will be provided in two phases.

• The first phase ensures that eligible employers receive a credit equal to 100% of the PAYG amounts withheld from salary and wages paid to employees during the relevant period, up to the maximum amount of $50,000.
• The second phase ensures that eligible employers receive another series of credits, equal to the credits that were received under the first phase. For example, if a business received $40,000 of credits in the first phase it will receive a further $40,000 of credits in the second phase. These additional credits will be spread over two or four activity statement periods, depending on whether the employer lodges on a quarterly or monthly basis.

If a business pays salary and wages to employees but is not required to withhold any tax then a minimum payment of $10,000 will be made in the first phase and a further payment of $10,000 will be made in the second phase.

The credits are automatically calculated by the ATO and employers will need to lodge an activity statement to trigger the entitlement. If the credit puts the business in a refund position the excess amount will be refunded by the ATO within 14 days.

Businesses that lodge activity statements on a quarterly basis will be eligible to receive credits in the first phase for the quarters ending March 2020 and June 2020. Credits in the second phase will be available for the quarters ending June 2020 and September 2020. The minimum $10,000 payment will be applied to the first lodgement.

Business that lodge on a monthly basis will be eligible for the credits in the first phase for the March 2020, April 2020, May 2020 and June 2020 lodgements. Credits in the second phase will be available for the June 2020, July 2020, August 2020 and September lodgments. The minimum $10,000 payment will be applied to the first lodgement.

Eligibility for the measure will be based on prior year turnover. We will have to wait for the legislation for the finer details.

Not-for-profit employers, including charities, with an aggregated turnover under $50 million will also be able to access the cash flow support.

• See: Cash flow assistance for businesses

Solvency safety net

A safety net has been put in place to protect businesses in temporary financial distress as a result of the pandemic by lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business. These include:

• A temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000.
• The time a company has to respond to statutory demands will increase from 21 days to 6 months.
• For 6 months, directors will be provided with temporary relief from personal liability for trading while insolvent.
• See also bankruptcy safety net below

It will be more important than ever for business to stay on top of their debtors.

Debts incurred will still be payable by the business. Only those debts incurred in the ordinary course of the business will be subject to the safety net measures.

• See: Temporary relief for financially distressed businesses

Access to working capital for SMEs – supporting lenders

The Government has announced a Coronavirus SME guarantee scheme that will guarantee 50% of new loans to SMEs up to $20 billion. These loans are new short-term unsecured loans to SMEs.

SMEs with a turnover of up to $50 million will be eligible to receive these loans.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

• Maximum total size of loans of $250,000 per borrower.
• The loans will be up to three years, with an initial six month repayment holiday.
• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

This latest measure builds on the previous initiatives to ensure small business can access capital, including:

• An exemption to the responsible lending obligations to enable financial institutions to provide new credit, credit limit increases, and credit variations and restructures,
• $15bn to the Australian Office of Financial Management to invest in wholesale funding markets used by small banks and non-banks to enable these lenders to support SMEs, and
• Australian Banking Association members will defer loan repayments for 6 months for small businesses (affected small businesses will need to apply for relief).

Sole traders and self-employed eligible for Jobseeker payment

The eligibility criteria to access income support payments will be relaxed to enable the self-employed and sole traders whose income has been reduced, to access support.

More:

• Income support for individuals
• More financial support for coronavirus affected job seekers

Temporary relief from Corporations Act requirements

The Treasurer has been given a temporary instrument-making power to amend the Corporations Act to provide relief or modifications to specific compliance obligations.

ASIC has announced measures for those companies with a 31 December financial year that need to hold their AGMs by 31 May 2020, providing a two month no action period and enabling hybrid virtual AGMs.

Individuals

Early release of superannuation

From mid-April, individuals in financial distress will be able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax free and will not affect Centrelink or Veterans’ Affairs payments.

To be eligible to access your superannuation you need to meet the following requirements:

• you are unemployed; or
• you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
• on or after 1 January 2020:
  • you were made redundant; or
  • your working hours were reduced by 20% or more; or
  • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20% or more.

For those eligible to access their superannuation, you can apply directly to the ATO through the myGov website from mid-April.

More:

• Early access to superannuation

Temporary reduction in minimum superannuation draw down rates

Superannuation minimum drawdown requirements for account-based pensions and similar products will be reduced by 50% in 2019-20 and 2020-21.

The upper and lower social security deeming rates will be reduced further. As of 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate 0.25%.

More: Providing support for retirees

Time limited fortnightly $550 ‘coronavirus supplement’

For the next 6 months, the Government is introducing a new Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients in the eligible payment categories.

The payment will be made to those receiving:

• Jobseeker payment (and those transitioning to the jobseeker payment)
• Youth allowance jobseeker
• Parenting payment
• Farm household allowance
• Special benefits recipients

In addition, eligibility to income support payments will be expanded to:

• Permanent employees who are stood down or lose their job
• Casual workers
• Sole traders
• The self-employed
• Contract workers who meet the income test

The Government notes that these criteria could include those required to care for someone affected by the Coronavirus.

Asset testing has also been reduced and will be waived for 6 months. Income testing will still apply.

The payment is not available if you have access to any employer entitlements such as annual or sick leave or income protection insurance.

More:

• Income support for individuals

Second $750 payment to households

The Government is now providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders residing in Australia (see the full list here). The payment will be exempt from taxation and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.

• Payment 1 from 31 March 2020 (previously announced on 12 March): Available to people who are eligible payment recipients and concession card holders at any time between 12 March 2020 to 13 April 2020;
• Payment 2 from 13 July 2020: Available to people who are eligible payment recipients and concession card holders on 10 July 2020.

The payments will be made automatically to those that meet the criteria.

More:

Payments to support households

Bankruptcy safety net

A temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will increase from $5,000 to $20,000. In addition, the time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.

Where someone declares their intention to enter voluntary bankruptcy, the period of protection from unsecured creditors will be extended from 21 days to 6 months.

More:

• Temporary relief for financially distressed businesses

More information:

• Joint media release with The Hon. Scott Morrison MP Prime Minister
• Treasury: Support for Businesses
• Treasury: Supporting Individuals and Households

Indigo Financial – what you need to know in these uncertain times – Must Read….

Hi everyone,

I hope this newsletter finds you well in these uncertain times and they are even mentioning the dreaded recession and depression words. Wow, how quickly can things change?

Firstly, we would like to say we are here to work with you so we can all get through this very tough time. Speak to us about budgeting, business coaching, strategies, cash-flow assistance etc. 

This newsletter has some news on the Global Business Camp event but more importantly some news on how to get through the next few month’s which will be tough with our:

• Cash is King section &
• FREE WEBINAR that you cannot afford to miss out on (find out more below).

Global Business Camp has been postponed due to the Coronavirus

Due to ongoing concerns about the current outbreak with the Novel Coronavirus (COVID-19) on the 13^th of March (last Friday) we made the difficult decision to postpone the 23 – 25 March Global Business Camp event.

Our staff, delegates, sponsors and suppliers are our top priority and we strongly believe that this is the right decision to make at this time given the evolving public health risks and travel concerns. Our thoughts and well wishes are with everyone.

This is not what we wanted to do and we made every effort to keep pushing forward, however based on the above and in consideration of the numerous e-mails and phone calls highlighting concerns, we believe we have no choice but to defer the event for everyone’s wellbeing and sanity.

We have re-booked for 9 – 11 November 2020.

FREE WEBINAR (MUST ATTEND)

It is all bad news at the moment but this is now an opportunity if we take action and think strategically. This will pass like everything else. The key is how ready will you be to take advantage of the opportunities?

Be ready for the opportunities – they will come, you just need to be ready to go.

In the 1930’s, with the Depression raging Tom Watson Snr and IBM thought differently to everyone else. While competitors laid off workers, closed factories and cut R&D, Watson refused to do any of that and in fact built a state of the art lab at Endicott in 1933. He wanted to be ready for an expansion of demand when the economy turned around. But, as the Depression lingered IBM’s finances were nearly in ruin.

Then in 1936, the Social Security Act passed, creating the single biggest information problem – tracking all those paychecks – for government and business to date. Only one company was in a position to handle it and that was IBM. It had machines ready, factories running and new technology. IBM’s business rocketed.

What are you doing at the moment to get ready?

What are you planning to do moving forward to be ready?

We know that some businesses will do nothing or expect things to happen and they unfortunately will struggle to survive. They will sadly fail. Other businesses will just follow what the Government and others are saying and they will survive but be 20% – 30% smaller than what they are now. Then there are the pro-active businesses and business people and they will ensure that they have cash reserves, they will keep marketing and they will focus on growth and when the recovery comes they will fly.

Well, what we are doing is giving you a helping hand?

On 24^th of March (after all quite a few of us were booked into the business camp) we are locking in a webinar via zoom to run through strategies to help you navigate and thrive through this time. The webinar is free and will go for 1 ½ hours. It is a workshop style webinar as we are keen to provide you with meaningful outcomes and a road map moving forward.

Webinar – date – 24 March 2020.

Webinar – time – 10.30am ACDT (South Australia).

Therefore – 11.00am NSW, Vic and ACT, 7.30am WA, 10.00am Qld 9.30am NT.

The Zoom Meeting link is https://zoom.us/j/9148804502

To register:

Please reply to kcotsios@indigofinancial.com.au to register with the word ‘WEBINAR’ and we will then individually book you an appointment and send you a link.

If you cannot make it please respond with – ‘I can’t make that time but would love to attend another session’.

We look forward to all of you joining us on the webinar.

Cash is King. How can we keep Cash Flow Strong in Tough Times?

Small businesses are very vulnerable in tough times. In a tough market it is probable that everything will slow down. Debtors can pay less quickly, turnover can fall, cash from profits may reduce and your bank may be less inclined to lend. In short, cash is limited. This is a little different to the recent past as many businesses didn’t really keep a very close eye on their cash. Now all that has changed with the Coronavirus on everyone’s mind.

Proper planning and being proactive can help you weather tighter economic periods and allow you to continue to thrive.

Make sure you have a clear picture of your payroll, and any other planned expenses that will need to be accounted for. When sales slow, there are still overheads and salaries that need to be paid. Then there are the ATO obligations and the bank requirements.

Budgeting in this critical time is so important and will really help you plan your cash flow.

Budgeting will help you run ‘what if analysis’, such as what happens if our sales drop by 20%, 30% etc or our collections become 120 days instead of 60 days etc?. What will our cash flow look like? This is all very important in this time.

We can help all of our clients with budgets, business coaching etc. Please speak to us about how we can help.

If there’s even a possibility that there could be a shortfall, it’s essential to meet this head-on. Whether this means speaking with your suppliers, creditors, your bank or the ATO to figure out an arrangement, or compromising on other business outgoings, you must make a plan to ensure that the business, or your staff, won’t suffer.

5 Strategies to minimise the stress of Cash Flow

Invoice early – Send any invoices that you can, and in advance if possible. Perhaps consider whether you have any regular clients or customers that you could offer a retainer or similar deal to if they book services or make a purchase from you in advance. Include a letter or a note informing customers you understand times are tough and you are happy to work with them on payment terms but there must be constant communication.

Chase payment – Use this opportunity to chase up any outstanding payments. Strong communication and relationships matter – talk to clients and chase invoices. Work with them to ensure we all get through this period. Also, resolve any invoices with queries as they will not get paid if there are queries on them.

An in depth look at accounts receivable may enable strategies to be developed to reduce debtors days outstanding or bad debts. You could look at tightening credit terms for particular segments of customers, increasing sales focus on customers with good credit history and offering prompt payment settlement discounts.

Talk to suppliers – A little honesty can go a long way. Perhaps they can extend a line of credit for your payments to them. In most cases, a good supplier would rather offer a little flexibility to keep an ongoing business relationship. If they are unwilling to help then you could look at switching suppliers with more favorable (longer) credit terms or rationalizing suppliers to reduce administration costs.

Review Inventory – Can you find a cheaper supplier locally to avoid the shipping costs or discuss alternative products that allow you to reduce expenses?

You could look at ordering processes that may identify opportunities for more (or less) frequent ordering of inventories, to smooth out cash payment requirements. Obsolete or slow moving stock should be rationalized and converted to cash and sales should be focused towards faster moving items.

Review your costs – It is also a good idea to conduct a general review of expenses.

Business costs can creep up when times are ok or good. In tougher times/conditions this will require much more focused cost management.

Review costs as follows:

• Expenses by category
• Payees
• Payroll by name

The 3 reports contain overlapping information but the different arrangement forces you to look at your costs from multiple perspectives. You could generate the reports from the past 12 months.

You would be surprised that there are a few lines that you could reduce or remove completely. It is a big deal if you reduce 5% of all expenses.

It’s a great idea to make a time to check on your expenses regularly, no matter what your financial situation. Review all of your regular payments and subscriptions as well as upcoming costs. There may be travel, functions or purchases which you can decide on an alternative approach to.

Talk to the bank or the Tax Office – If cash flow is tight, make sure you have conversations early so you have everything in place to see you through. If you are paying principal and interest on loans you could look at converting the loan to an interest only amount or obtaining an overdraft or a larger overdraft. You can always go back to principal and interest when the situation gets better.

Remember, be ready for the opportunities – they will come, you just need to be ready to go.

Remember the IBM story and how the business rocketed.

Remember the questions raised above and how business will play out.

What are you doing at the moment to get ready?

What are you planning to do moving forward to be ready?

We know that some businesses will do nothing or expect things to happen and they unfortunately will struggle to survive. They will sadly fail. Other businesses will just follow what the Government and others are saying and they will survive but be 20% – 30% smaller than what they are now. Then there are the pro-active businesses and business people and they will ensure that they have cash reserves, they will keep marketing and they will focus on growth and when the recovery comes they will fly.

FREE WEBINAR – Don’t Forget.

Webinar – date – 24 March 2020.

Webinar – time – 10.30am ACDT (South Australia).

Therefore – 11.00am NSW, Vic and ACT, 7.30am WA, 10.00am Qld 9.30am NT.

The Zoom Meeting link is https://zoom.us/j/9148804502

To register:

Please reply to kcotsios@indigofinancial.com.au to register with the word ‘WEBINAR’ and we will then individually book you an appointment and send you a link.

If you cannot make it please respond with – ‘I can’t make that time but would love to attend another session’.

We look forward to all of you joining us on the webinar.

 Very Important:

Communicate, communicate, communicate and be alert. The last thing your bank or the ATO want is to receive one week’s notice that you need to double your overdraft or you can’t pay your tax obligations.

By budgeting and planning you will better understand your cash position and then you can approach the bank and ATO and for that matter suppliers in a far more confident and factual manner.

Also, do not stop communicating with your team, your customers, spheres of influence and prospects. Now is the time for people to see and hear you. If people know you are there and you are able to help them they will look you up.

We can help you implement strategies to protect your business for the long term and help you alleviate cash flow worries.

Please stay safe and we look forward to seeing all of you on the webinar. We will keep you updated with all the business camp information as we move forward as well.

Stay safe.

P.S. Speak to us about anything in relation to the above. We will work with you as closely as needed in these uncertain times. As mentioned previously, we can help with business coaching, webinars, cashflow projections and more.

Hello to our valued clients

In light of the Coronavirus uncertainty at present, we wanted to be on the forefront for our clients and colleagues to understand the impacts that may affect your business at this time. The government announced an economic stimulus package in response to the Coronavirus to assist in supporting businesses cash flow, encourage investment and help businesses retain their employees.

We attach a blog that explains in simple terms if this package could assist you and your business.

We also attach a Fact Sheet: Recession Proof your Business – A simple, easy to read Checklist of strategies to help your business stay recession proof!

If you have any further questions in relation to the above, please don’t hesitate to call us on 08 8212 8585

How your business can benefit from the coronavirus stimulus package:

The Australian Government has announced an economic stimulus package in response to the coronavirus.

Business initiatives

The key measures designed to support businesses cash flow, encourage investment and help businesses retain their employees include:

Tax-free payment of between $2,000 and $25,000

To be eligible business entities must have aggregated annual turnover of under $50 million (based on the 2018/2019 tax year) and employee staff.

Eligible businesses that withhold PAYGW tax on their employees’ salary and wages will receive a payment equal to 50% of the amount of tax withheld, up to a maximum payment of $25,000.

Eligible businesses that pay salary and wages, but don’t withhold any PAYGW tax (as their employees do not earn enough) will receive a minimum payment of $2,000.

The payment will only be available for a limited time.  The payment will be credited to your Quarterly March 2020 and June 2020 activity statements (BAS) when you lodge these (monthly lodgers will be eligible on their March, April, May and June 2020 IAS).

Where the credit places the business into a refund position, the ATO will pay the refund within 14 days.

Example: Sean’s Hairdresser Salon

Sean employs one apprentice who earns $37,970 per year and two stylists who both earn $44,260 per year. In the March and June 2020 quarterly BAS, Sean reports withholding of $4,570 for his employees

Under the Government’s changes, Sean will be eligible to receive the payment on lodgement of his BAS. Sean’s business will receive:

• A payment of $2,285 for the March quarter, equal to 50 per cent of his total withholding.
• A payment of $2,285 for the June quarter, equal to 50 per cent of his total withholding.

Sean’s business will receive a total payment of $4,570. Sean may also benefit from the assistance for existing apprentices and trainees measure.

Apprentice and Trainee Wage Subsidy of up to $21,000

Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

To be eligible your business needs to employ fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020. Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider

Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020. For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

Increasing the Instant Asset Write-Off to $150,000

The Government is increasing the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020, effective immediately.

Accelerated depreciation deduction of 50%

The government is introducing a 15-month Backing Business Investment” (BBI) incentive by accelerating depreciation deductions.

Eligible businesses with aggregated turnover below $500 million and who purchase new plant & equipment (that can be depreciated under Division 40 of the ITAA1997) acquired after the announcement and first used or installed by 30 June 2021 can get a deduction of 50% of the costs in the year acquired, with existing depreciation rules applying to the balance.

Example: Small business benefits from the BBI

Joan and Bruce own a company, NC Transport Solutions Pty Ltd, through which they operate a haulage business on the North Coast of New South Wales. NC Transport Solutions Pty Ltd has an aggregated annual turnover of $8 million for the 2019-20 income year. On 1 May 2020, Joan and Bruce purchase a new truck for $260,000, exclusive of GST, for use in their business.

Under existing tax arrangements, NC Transport Solutions Pty Ltd would depreciate the truck using their small business simplified depreciation pool. Under the pooling rules, NC Transport Solutions Pty Ltd 4 would deduct 15 per cent of the asset’s value upon entry to the pool, leading to a tax deduction of $39,000 for the 2019-20 income year.

Under the new BBI, NC Transport Solutions Pty Ltd would instead claim an up-front deduction of 50 per cent of the truck’s value ($130,000) before placing the asset in their small business simplified depreciation pool. Joan and Bruce would then claim a further 15 per cent deduction on the depreciated value of the truck ($19,500). As a result of the two deductions, Joan and Bruce are able to claim a deduction totalling $149,500 in the 2019-20 income year, $110,500 more than under existing arrangements. At the company tax rate of 27.5 per cent, Joan and Bruce will pay $30,387.50 less tax in the 2019-20 income year.

Other initiatives

The following measures are designed to assist lower income Australians and severely affected regions and communities

• One-off $750 cash payment from 31 March – to aged pensioners and people on Newstart, the disability support pension, carers’ allowance, youth allowance, veterans support payments and family tax benefits. The payment will be tax-free and will not count as income.
• $1 billion fund – to assist regional business and industries directly affected including trade and tourism businesses.

ATO administrative relief – the ATO will provide relief for certain tax obligations for taxpayers affect by the coronavirus outbreak on a case-by-case basis. Taxpayers can contact the ATO on 1800 806 218 for further information.

Recession Proof Your Business

Fact Sheet: Recession Proof Your Business

With that in mind here are some strategies to assist with recession proofing your business in this coronavirus environment.

Advise your staff of your “Coronavirus” Policy

– Clear and honest communication with all staff

– Update travel rules and arrangements limiting non-essential business travel

– Consider if employees can work from home or take time off

– Implement a home quarantine regime for anyone that has travelled to an infected country or been in contact with someone infected

– For further information about coronavirus and Australian workplace laws visit the Fair Work websitehttps://www.fairwork.gov.au/about-us/news-and-mediareleases/website-news/coronavirus-and-australian-workplacelaws  

-If you have any enquiries about your obligations as an employer contact Fair Work Australia on 13 13 94

Plan for staff absences due to Coronavirus

– Workers may need to take leave if they are their family members are sick

– Some workers may have to self-quarantine

– Have a plan if schools / daycare centres are closed and/or school holidays are extended

Build cash reserves

– Cut back on any unnecessary or discretionary spend

– Review amounts owing from customers and change any amounts owing now

– Talk to your suppliers and negotiate discount for early/ontime payment or extending their due dates

Review your supply chain

– Talk to your key suppliers and understand how they are impacted / likely to be impacted

– Can you source alternative suppliers and how will that impact your price?

– Review your stock levels and make sure you have enough / aren’t holding the wrong type and / or in the wrong location

Keep your customers/clients informed

– Look after your loyal customers

– Facebook / Internet updates if your business needs to close, reduce staff, limits on quantities available

– Practice good hygiene in face-to-face meetings with customers/clients

– Ask customers/clients to have phone / skype meetings/ zoom meetings

Government Assistance / Grants

– Can you access any government grants?

– Do some research online and see what you can find out for now.

Bank debt / ATO payments

– Talk to your bank if you need help with your repayments

– Talk to the Tax Office if you need help with your tax debts or extending your payment terms

Review business continuity insurance

-Check with your broker or insurance company if you can make a claim, however generally there is no insurance protection for disruptions to business arising from coronavirus

Plan for a complete business shutdown

– Have a business continuity plan for how your business will get running again after a shutdown.

Family Plan:

The coming weeks and months could present real challenges for families. So here are five things you can do to minimise conflict and get through this time.

Talk to your partner about work schedules

Now is the time to talk through what it will look like if you both have to stay home.

Discuss how you will fund things and whether either of you will still get paid. Will this period be classified as sick leave, enforced leave or leave without pay? How is this going to impact your finances?

Now is also the time to discuss household chores and childcare. If you are both home, who is cooking, cleaning, washing and changing nappies? In a lot of cases, women will automatically take on these tasks but that’s going to get old, really fast, if the woman in question is also trying to keep up with her regular workload.

Allocate tasks, do up a roster, or alternate days. Whatever you do, don’t try to do it all yourself. ‍

Get your prescriptions and medicine cabinet in order

Refill all your scripts for your regular medications, stock up on paracetamol (children’s and adult), ibuprofen, allergy treatments and other first aid essentials. Make sure you have plenty of soap and tissues in the house, as well as things like hydrating icy poles and stock to make soups. Buy things as you go, don’t get to the supermarket and load up with items all at once.

Teach the kids to wash their hands with soap and water for at least 20 seconds, to avoid touching their mouth, nose and eyes, and to cover their cough or sneeze with a tissue or your sleeve. For younger kids, turn it into a game that you repeat daily so by the time they need to do it, they are already familiar with the concept.‍

Talk to your support network about possible childcare options

‍Have you spoken to your daycare centre, school or extended family about what will happen if COVID-19 disrupts normal operations? Do they have a plan? Will daycare payments still continue? I would assume they are in constant communication with you at the moment if they aren’t follow them up.

Arrangements involving grandparents will need to be reviewed as older people are more susceptible to the virus. Now is the time to consider alternatives. ‍

Prepare a strategy for your clients and customers to implement if you need to shut down your business‍

In the event of a complete shutdown wherein you can’t work at all, ensure you have a plan for how you will notify your clients and customers and who can possibly take over from you if there are urgent tasks that need to be completed.

Do you have a business partner who can assist? Are there trusted people in your network who you could hand over to while you’re offline? Is anyone across what you’re working on and trained in your process and systems?

How will you cope if you can’t work for 14 days? And how will your clients and customers cope without you? Now is the time to do some planning around this.‍

Get your finances in order‍

Do you have enough money saved to cover your mortgage or rent if you don’t have any money coming in?

Many Australian households are two weeks away from the threat of homelessness if they lose their regular income. Speak to a trusted family member, your bank or your creditors now if you think you could lose income in the coming months. It could simply be a matter of credit extension or a loan from a family member.

Having a financial plan will significantly reduce the stress of two weeks off work for both parents. It’s a potentially volatile year ahead. Get organised now.

ATO announces relief to deal with COVID -19:

Following the government’s stimulus package announcement, aimed to help keep “Australians in jobs and businesses in business”, the ATO has announced a series of administrative measures to assist those experiencing financial difficulty as a result of the COVID-19 outbreak.

Commissioner of Taxation Chris Jordan is encouraging businesses impacted by the coronavirus to get in touch with the ATO to discuss relief options, including deferral of some payments, quicker access to GST refunds and options to enter low-interest payment plans for existing or future tax debts.

“We know that many businesses and communities are being heavily affected by the challenging economic conditions created by the outbreak of COVID-19,” Mr Jordan said.

“The ATO will work shoulder to shoulder with businesses to assist them through this difficult period and do what we can to ease the pressure. Once you contact us, we’ll tailor a support plan for your needs and circumstances.”

Options available to assist businesses impacted by COVID-19

Options available to businesses include:

• Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.

• Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.

• Allowing businesses to vary pay-as-you-go (PAYG) instalment amounts to zero for the April 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.

• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.

• Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.

Employers are being advised that they will still need to meet their ongoing super guarantee obligations for their employees.

 Outside of business, the ATO confirmed it will work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation.

The Tax Office explained that unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by the COVID-19 will not be automatically implemented. Businesses and individuals impacted by the COVID-19 are being advised to contact the ATO to request assistance on 1800 806 218, when they are ready, to discuss their situation.

Further information on developing a plan speak to us and we can help.

A new system alerting SMSF trustees of changes made to their SMSF will roll out this month. The ATO will alert trustees by text and/or email when changes are made to bank details, electronic service address of the fund, the authorised contact and members.

Trustees need to notify the ATO within 28 days of key changes to the fund including a change in trustees, directors of the corporate trustee, members, contact details, address and fund status.

Quote of the month

“Courage is grace under pressure.”

Ernest Hemingway

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

The ATO has requested insurance policy information from 30 insurers for lifestyle assets such as yachts, thoroughbred horses, and fine arts.

The review, expected to impact 350,000 taxpayers, reaches from the 2015-16 to 2019-20 financial years, revealing assets that previously may not have been disclosed or underreporting of income. “If a taxpayer is reporting a taxable income of $70,000 to us but we know they own a three million dollar yacht then this is likely to raise some red flags,” Deputy Commissioner Deborah Jenkins said.

The ATO is looking for:

• under-reporting of income and mismatches between lifestyle assets and reported income,
• the purchase of assets in a company name but where those assets are used for private purposes (incorrect claims or non-reporting of GST credits, FBT, Division 7A, capital gains tax), and
• lifestyle assets purchased by self-managed superannuation funds that might breach the sole purpose test.

The ATO has stated that the data matching will not result in automatic audits but will be reviewed by compliance officers to support the profiling of selected taxpayers.

Ten million hectares, lives lost, wildlife on the brink, billions in lost revenue and clean-up costs. For many, returning life to normal is a long way off this summer. We summarise the help available to those impacted by the bushfires.

What we can do for you

If you are impacted by bushfires, we can help. Many will need to lodge economic loss claims to ensure that the true value of what they have lost is recognised. We will help with these claims pro-bono. And, of course, to work with the Australian Tax Office (ATO) on disaster relief requirements.

Tax relief

Approximately 3.5 million businesses, individuals, and self-managed superannuation funds in identified areas (see the list of affected postcodes) have been granted special concessions and relief by the ATO:

• An automatic extension until 28 May 2020 to lodge and pay activity statements, income tax, SMSF and FBT lodgements.
  • The deferral does not apply to:
    • Superannuation guarantee payments or lodgements
    • Large PAYG withholders (although they will be assessed on a case by case basis if they apply for relief from the ATO)
  • Fast tracking of refunds due
  • Tax debt recovery on hold until 28 May 2020.
    • Impacted taxpayers need to apply for special consideration. The ATO has stated they will, “consider releasing individuals and businesses from income tax and fringe benefits tax debts if they are experiencing serious hardship.”
    • Interest and penalties accrued by taxpayers in affected areas since the bushfires commenced will be remitted
  • Income tax instalments able to be varied to nil without penalty

If you are not in one of the identified postcodes but have been impacted by the bushfires, relief might still be available to you. When can work with the ATO on your behalf.

Support for individuals and families

Services Australia have mobile units assisting those in fire affected areas.  Several payments and different forms of relief are available to those in fire affected areas:

Disaster recovery payments

The Disaster recovery payment is a tax exempt Federal Government payment available to those who are seriously injured, have lost an immediate family member, have lost their home or had it significantly damaged, or have lost major assets (or damaged):

• $1,000 for each eligible adult, and
• $400 for a dependent child under the age of 16.
• An additional $400 to help with education expenses for eligible children. These payments are automatic if you are the primary carer of a child affected by the bushfires after 30 June 2019.

Loss of income: Disaster recovery allowance

If you work in a bushfire affected area, are an Australian resident over 16 years of age, are not already receiving a Government allowance, and have lost income as a result of the fires, you might be able to claim the Disaster recovery allowance. The allowance provides income support for up to 13 weeks (equivalent to the maximum Newstart or Youth Allowance).

You will need to prove that you earnt below the relevant income threshold to access the payment. While these payments are normally taxable, the Government has announced that it plans to introduce legislation that would make them tax-free, but this is not yet law.

Mental health support

Up to 10 free support sessions are available through primary health networks. In addition, Medicare rebates for 10 psychological therapy sessions through eligible GPs, psychologists, occupational therapists and social workers (you will not need a GP referral to access these services).

Phone, internet and energy

Many of the telecommunications providers are offering support packages for those impacted by the fires including free call diversion, extended time for bill payments, bill waivers in extreme hardship, and free prepaid recharges. Contact your provider.

Many of the energy providers are also offering support such as freezing accounts.

Support for business

Businesses in fire affected areas that have suffered direct losses or indirect economic loss may be able to access:

• Recovery grants of up to $50,000 (tax free)
• Concessional loans of up to $500,000 for eligible small businesses (including farmers, fishers and foresters) and non-profit organisations who have suffered significant asset loss of significant loss to revenue. The loan would be for up to 10 years and used for the purposes of restoring or replacing damaged assets and for working capital.

A range of State Government grants are also available.

Support for volunteer firefighters

Volunteer firefighters in NSW and QLD may be eligible for payments of up to $300 per day, with a cap of $6,000. The payments are not means tested and are tax-free. The payment is a Federal Government initiative administered by the State Governments (see Volunteer Firefighter Payment for NSW and Volunteer Compensation Package for QLD).

If you are in the public sector, you now have access to 20 days of paid emergency services leave to work on the front lines in addition to normal leave provisions.

Many telecommunications providers are offering eligible volunteer firefights and SES volunteers support. Optus and Telstra, for example, will cover the bills of these volunteers for December 2019 and January 2020.