$15,000 Grants Available for Small QLD Business from the Business Boost Grants Program.
On the 30 July, The QLD Government will open The Business Boost grants program for QLD Small Businesses to advance improvements in their efficiency and productivity.
Previous Grants under the Business Basics Program were oversubscribed in 4 hours of the Grant Application opening, so contact us now to ensure you do not miss out.
This support includes activities in 3 project areas:
- Future planning: Strategic Business Advice & Strategy, Government Regulation Compliance, Export Requirements
- Specialised and automated software: Complex Websites, CRM, Project Management Software
- Staff management, development and planning: Human Resource, Professional development & Training
To be eligible for this grant, the business should;
- have fewer than 20 employees at the time of applying for the grant
- have an active Australian Business Number (ABN) and registered for GST
- have a Queensland headquarters
- have a turnover of between $300,000 (minimum) and $600,000 (maximum) in the last financial year (2020–21)
- have a publicly reachable web presence to identify business operations (e.g. business website and/or social media pages)
- not be insolvent or have owners/directors that are an undischarged bankrupt.
Click here to read further information on eligibility along with the terms and conditions of the grant.
Please contact our team if you would like to learn more.
In order for your business to continue to receive payments under the JobKeeper scheme, you must lodge a “JobKeeper business monthly declaration” report with the ATO.
Importantly, the JobKeeper business monthly declaration report is NOT a reassessment of your businesses eligibility for the JobKeeper scheme, it’s purely for statistical purposes to enable Treasury and the Government to track and report key details about the scheme.
Once your business is eligible for the JobKeeper scheme, you remain eligible until either the scheme finishes or you voluntarily exit the scheme, for example if you decide to close your business or if you no longer have any eligible employees or business participants.
Information Included in JobKeeper Business Declaration Monthly Report
The following information is included in the monthly report:
- Actual and projected GST turnover
- Confirmation of the eligible employees covered by the scheme
- Confirmation of your contact details
- Confirmation of your financial institution details to receive the JobKeeper payments
Deborah Jenkins, Deputy Commissioner from the ATO has said that businesses need to stay on top of their monthly reporting obligations under the JobKeeper scheme, explaining “Each month, you need to make sure that you are paying eligible employees the relevant $1,500 per fortnight and we also understand things change over time.
“You may find that some employees depart the country (if they’re able to) or they may not wish to remain on your books.
“That’s the purpose of the monthly declaration. It’s to make sure your business still exists and to check who your employees are that are employed for that period of time.”
Businesses are encouraged to use the ATO’s business portal or their registered tax or BAS agent to lodge the reports.
“We need information for the current and projected turnover, but that is not to retest the businesses eligibility.”
“It is statistical information; we need to understand how this JobKeeper scheme is playing out and whether it is meeting what it was set out to do.”
Lodging the Report
Where your business is registered for Single Touch Payroll (STP) you can lodge via:
- The Business Portal via your myGovID
- Through your Tax agent (i.e. Quill Group)
More information on the monthly JobKeeper declaration report can be found on the ATO website: JobKeeper Payment – Step 3: Make a business monthly declaration.
Other Articles Related to JobKeeper
The following are other articles related to the JobKeeper scheme:
If you have any questions or require assistance with your JobKeeper Monthly Declaration Report please contact our team.
Below are some frequently asked questions about the JobKeeper payments. The JobKeeper payment is yet to be legislated. Parliament is due to sit on the 8th of April 2020. We will endeavour to update our responses as further information becomes available.
I am Self-Employed. Am I eligible for the JobKeeper Payment?
Yes. People who are self-employed will be eligible for the payment provided, at the time of applying, they:
- estimate their turnover has or will reduce by 30 per cent or more;
- had an ABN on or before 12 March 2020, and
- either had an amount included in its assessable income for the 2018-19 year and it was included in their income tax return lodged on or before 12 March 2020, or
- made a supply during the period 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before 12 March 2020;
- were actively engaged in the business;
- are not entitled to another JobKeeper Payment (either as a nominated business participant of another business or as an eligible employee);
- were aged at least 16 years of age as at 1 March 2020; and
- were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
My Business operates through a Partnership. Can each partner receive the JobKeeper Payment?
No. Only one partner can be nominated to receive a JobKeeper Payment along with any eligible employees, noting a partner cannot be an employee.
Can Trusts receive the JobKeeper Payment?
Trusts can receive JobKeeper payments for any eligible employees. Where beneficiaries of a trust only receive distributions, rather than being paid salary and wages for work done, one individual beneficiary (that is, not a corporate beneficiary) can be nominated to receive the JobKeeper Payment.
I am a Company Director that receives Directors Fees. Am I eligible?
An eligible business can nominate only one director to receive the payment, as well as any eligible employees. Only one person in a director capacity may receive the payment and that individual may not receive the payment as an employee.
I am paid as a Shareholder of a company. Am I eligible?
An eligible business that pays shareholders that provide labour in the form of dividends will only be able to nominate one shareholder to receive the JobKeeper Payment.
I receive rental income as a landlord but am not registered as a business. Am I eligible?
No. Only businesses with employees or self-employed people are eligible for the JobKeeper Payment.
I am Self-Employed. How can I apply for the JobKeeper Payment?
The ATO will administer the program with an online application process. You may be asked to provide your ABN and a single Tax File Number for the eligible recipient of the JobKeeper Payment, and a declaration of business activity.
I am Self-Employed and also have a job. Am I eligible for the JobKeeper Payment?
An individual can only receive JobKeeper Payments from one source. However, if you are eligible for a JobKeeper Payment, you can also receive income from other sources including another job.
My Business has only just started, or my business has ‘lumpy’ income. How can I self-assess that my turnover has fallen 30 per cent?
To establish that a business has faced or is likely to face a 30 per cent or more or 50 per cent or more fall in turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or quarter (depending on the Business Activity Statement reporting period of that business) relative to their turnover in a corresponding period a year earlier.
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established, were scaling up, or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus.
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations). There will be some tolerance where employers, in good faith, estimate a 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.
My Turnover has not decreased by 30 per cent this month, but I believe it will in the coming month. Am I eligible?
You can apply for the payment if you reasonably expect that your turnover will fall by 30 per cent or more relative to your turnover in a corresponding period a year earlier. The ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.
It is unlikely that my turnover will decrease by 30 per cent in the coming month, but can I apply later if my turnover decreased in one of the subsequent months?
If a business does not meet the turnover test at the start of the JobKeeper scheme on 30 March 2020, the business can start receiving the JobKeeper Payment at a later time once the turnover test has been met. In this case, the JobKeeper Payment is not backdated to the commencement of the scheme. Businesses can receive JobKeeper Payments up to 27 September 2020.
Will the ATO use the JobKeeper Payments to offset a Business Activity Statement debt?
The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the intent is that it is a payment that facilitates employers to pay their employees.
Can Employers receive both the JobKeeper Payment and the Supporting Apprentices and Trainees wage subsidy?
Eligible small businesses can receive the 50 per cent wage subsidy for apprentices and trainees in the Supporting Apprentices and Trainees measure from 1 January to 31 March 2020, and the JobKeeper Payment. Where small businesses receive the JobKeeper Payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards.
Further information on the Supporting Apprentices and Trainees measure is available on the Treasury website at treasury.gov.au/coronavirus/businesses.
What will be done to ensure compliance?
This program will be subject to ATO compliance and audit activities. There will be a positive obligation on employers to establish their eligibility and that of their employees. In addition, the ATO will cross-check payments with Services Australia data, and data from other government agencies, and undertake activities designed to identify multiple or ineligible payments to individuals.
What is the Government going to do to ensure Companies don’t manipulate their turnover to ensure they qualify?
The ATO will provide guidance to help businesses self-assess their eligibility. This will include for circumstances that do not fit neatly into more general circumstances that the majority of businesses are in.
The Government will include appropriate integrity rules to prevent employers from entering into artificial schemes in order to get inappropriate access to payments.
There are serious consequences, including large penalties and possible imprisonment, for those trying to illegally get benefits under the scheme.
The Fringe Benefits Tax (FBT) year ended on 31 March. We’ve outlined the hot spots for employers and employees.
FBT updates and problem areas
- Car parking under scrutiny
- Motor vehicle problem areas
- Mismatched FBT and income tax amounts
- Mismatched information for entertainment claimed as a deduction and what is reported for FBT purposes
- Business assets personally used by owners and staff
- Not lodging FBT returns
- Salary sacrifice problem areas
- Did you provide assistance to employees during a crisis?
- Housekeeping essentials
Car parking under scrutiny
Important impending changes
A controversial draft ruling from the ATO could expand the scope of the FBT rules dealing with car parking benefits. This is because the draft ruling changes the ATO’s view on what constitutes a commercial parking station. Where an employer provides:
- Car parking facilities for employees within 1km of a commercial parking station, and
- That commercial car park charges more than the car parking threshold ($8.95 for year ended 31 March 2020)
a taxable car parking fringe benefit will arise unless the employer is a small business and able to access the car parking exemption.
The draft ruling is not finalised as yet but the ATO has stated it intends to apply the new definitions from 1 April 2021. If you provide car parking facilities to team members, it is important that you either have certainty that you are able to access the small business exemption or understand the implications of the ruling to the car park facilities you provide.
Common errors
The ATO has noticed that where car parking benefits are being declared (that is, where an employer provides parking to an employee), the value of what is being declared is significantly less than what you would expect to pay.
Common errors include:
- Market valuations that are significantly less than the fees charged for parking within a one kilometre radius of the premises on which the car is parked;
- Using parking rates or facilities not readily identifiable as a commercial parking station;
- Rates charged for monthly parking on properties purchased for future development that do not have any car parking infrastructure; and
- Insufficient evidence to support the rates used as the lowest fee charged for all day parking by a commercial parking station.
Motor Vehicle problem areas
Private use of work vehicles
Just because your business buys a motor vehicle and it is used almost exclusively as a work vehicle, that alone does not mean that the car is exempt from FBT. If you use the car for private purposes – pick the kids up from school, do the shopping, use it freely on weekends, garage it at home, your spouse uses it – FBT is likely to apply. The private use of work vehicles is firmly in the sights of the ATO.
Private use is when you use a car provided by your employer (this includes directors) outside of simply travelling for work related purposes.
If the work vehicle is garaged at or near your home, even if only for security reasons, it is taken to be available for private use regardless of whether or not you have permission to use the car privately. Similarly, where the place of employment and residence are the same, the car is taken to be available for the private use of the employee.
Finding out that a car has been used for non-work-related purposes is not that difficult. Often, the odometer readings don’t match the work schedule of the business. These are areas the ATO will be looking at.
When is the motor vehicle exempt from FBT?
A motor vehicle is exempt from FBT when:
- The vehicle is a taxi, panel van, utility or other commercial vehicle that is not designed principally to carry passengers; and
- The private use of the vehicle is limited to:
- Travel between home and work;
- Travel that is incidental to travelling in the course of performing employment‑related duties; and
- Non‑work related use is minor, infrequent and irregular.
The ATO also provides a ‘safe harbour’ for employers to help overcome the issues of deciding when private use is minor, infrequent and irregular. To qualify for the exemption:
- The employer provides an eligible vehicle to the employee to perform their work duties. An eligible vehicle is generally a commercial vehicle or one that is not designed mainly for carrying passengers. The requirements are very strict and guidance on this is published on the ATO website.
- The employer takes reasonable steps to limit private use and they have measures in place to monitor this – this might be a policy on the private use of vehicles that is monitored using odometer readings to compare business kilometres and home to work kilometres travelled by the employee against the total kilometres travelled.
- The vehicle has no non-business accessories – for example a child safety seat.
- The value of the vehicle when it was acquired was less than the luxury car tax threshold ($75,526 for fuel efficient vehicles in 2019-20 and $67,525 for other vehicles).
- The vehicle is not provided as part of a salary sacrifice arrangement; and
- The employee uses the vehicle to travel between their home and their place of work and any diversion adds no more than two kilometres to the ordinary length of that trip. If there is some purely private travel using the vehicle, the total distance for the FBT year must be no more than 1,000 km and no single return journey for a wholly private purpose can exceed 200 km.
If you meet all these specifications, the ATO has stated that it will not investigate the use of the FBT exemption further. However, the employer will still need to keep records to prove that the conditions above have been satisfied and to show that private use is restricted and monitored.
If these conditions are not met then this doesn’t necessarily prevent the exemption from applying, but you can expect that the ATO would devote more time and resources in checking whether the conditions have actually been met. Employers who do not take active steps to check the way commercial vehicles are being used are at high risk of significant FBT liabilities.
Mismatched FBT and income tax amounts
Another area the ATO is picking up is mismatches between the amount reported as an employee contribution on an FBT return compared to the income amounts on an employer’s tax return.
The ATO focuses on mismatches between the employee contributions relating to the fringe benefits, which are reported on the employer’s fringe benefits tax return, and reporting those contributions as income on their income tax return or where the employer has incorrectly overstated the employee contributions that they have received on their fringe benefits tax return to reduce the taxable value of the fringe benefits provided (and thereby, the employer’s FBT liability).
The ATO’s approach is very evidence-based, there needs to be documentation to back up whatever the business is claiming.
Mismatched information for entertainment claimed as a deduction and what is reported for FBT purposes
One of the easiest ways for the ATO to pick up on problem areas is where there are mismatches. When it comes to entertainment, employers are keen to claim a deduction but this is not recognised as a fringe benefit provided to employees.
Expenses related to entertainment such as a meal in a restaurant are generally not deductible and no GST credits can be claimed unless the expenses are subject to FBT.
Let’s say you taken a client out to lunch and the amount per head is less than $300. If your business uses the ‘actual’ method for FBT purposes then there should not be any FBT implications. This is because benefits provided to client are not subject to FBT and minor benefits (i.e., value of less than $300) provided to employees on an infrequent and irregular basis are generally exempt from FBT. However, no deductions should be claimed for the entertainment and no GST credits would normally be available either.
If the business uses the 50/50 method, then 50% of the meal entertainment expenses would be subject to FBT (the minor benefits exemption would not apply). As a result, 50% of the expenses would be deductible and the company would be able to claim 50% of the GST credits.
Business assets personally used by owners and staff
Private use of business assets is an area that crosses across a whole series of tax areas: FBT, GST, Division 7A and income tax.
Take the ATO’s example of the property company that claimed deductions for a boat on the basis that it was used for marketing the company. Large deductions were claimed relating to running the boat. This attracted the ATO’s attention and a review was carried out.
The ATO discovered the boat was used by the director and other employees for private trips, and to host parties for people who had paid to attend the company’s property seminars.
When looking at the overall business activities, the ATO determined the director had purchased the boat primarily for their own private use. As a result, they disallowed the deductions and the private use of the boat was a fringe benefit for the employees of the company. The company had to lodge an FBT return and pay the resulting FBT liability, as well as the income tax shortfall, interest and penalties.
Not lodging FBT returns
The ATO is concerned that some employers are not lodging FBT returns or lodging them late to avoid paying tax. Given late FBT returns are a problem, it’s likely the ATO will place close attention to any employer that:
- Is registered for FBT but lodges late; or
- Is not registered for FBT. If your business employs staff (even closely held staff such as family members), and is not registered for FBT, it’s essential you have reviewed your position and are certain that you do not have an FBT liability. If the business provides cars, car spaces, reimburses private (not business) expenses, provides entertainment (food and drink), employee discounts etc., then you are likely to be providing a fringe benefit. Make sure you have reviewed the FBT client questionnaire we sent you!
Salary sacrifice problem areas
Calculating superannuation guarantee on salary sacrifice
From 1 July 2020, new rules will come into effect to ensure that an employee’s salary sacrifice contributions cannot be used to reduce the amount of superannuation guarantee (SG) paid by the employer.
Under current rules, some employers are paying SG on the salary less any salary sacrificed contributions of the employee. Currently, employers must contribute 9.5% of an employee’s Ordinary Time Earnings (OTE) and they choose whether or not to include the salary sacrificed amounts in OTE.
Under the new rules, the SG contribution is 9.5% of the employee’s ‘ordinary time earnings (OTE) base’. The OTE base will be an employee’s OTE and any amounts sacrificed into superannuation that would have been OTE, but for the salary sacrifice arrangement.
Employee contributions for FBT purposes and salary sacrifice
An issue that frequently causes confusion is the difference between the employee salary sacrificing in order to receive a fringe benefit and making an employee contribution towards the value of that fringe benefit.
To be an effective salary sacrifice arrangement (SSA), the agreement must be entered into before the employee becomes entitled to the income (e.g., before the period in which they start to perform the services that will result in the payment of salary etc.).
Where an employee has salary sacrificed on a pre-tax basis towards the fringe benefit provided – laptop, car, etc., they have agreed to give up a portion of their gross salary on a pre-tax basis and receive the relevant fringe benefit instead.
As a starting point, the taxable value of the fringe benefit is the full value of the expense paid by the employer. The salary sacrifice arrangement doesn’t actually reduce the FBT liability for the employer.
The employer recognises a lower cost of salary and wages provided to the employee as their ‘cost saving’, which results in lower PAYG withholding and superannuation contribution obligations, but they still recognise the full value of the fringe benefit as part of their taxable fringe benefit which is subject to FBT.
The employee recognises that they have a reduced amount of salary and wages, and a non-cash benefit in the form of the fringe benefit.
Did you provide assistance to employees during a crisis?
If your business assists employees during an emergency, for example floods, bushfires, COVID-19 etc., then fringe benefits tax is unlikely to apply to the assistance you provide. While we doubt anyone would be thinking about FBT during a crisis, it’s good to know that the tax system does not disadvantage your generosity.
Examples of the kinds of benefits exempt from FBT include immediate relief you provide to an employee in the form of:
- emergency meals or food supplies
- clothing, accommodation, transport or use of household goods
- temporary repairs, for example on the employee’s home or car. Long-term benefits are not exempt from FBT, such as providing a new house or car to replace one destroyed in the emergency event.
First aid or other emergency health care you provide to an employee is also exempt if it is provided by an employee (or a related company employee), or is provided at your premises (or those of a related company), or at or near an employee’s worksite.
The exemption applies in a range of scenarios including natural disasters, accidents, serious illness, armed conflict, or civil disturbances.
Just check that your region is listed as one of the affected areas before assuming the exemption applies.
Housekeeping
It can be difficult to ensure the required records are maintained in relation to fringe benefits – especially as this may depend on employees producing records at a certain time. If your business has cars and you need to record odometer readings at the first and last days of the FBT year (31 March and 1 April), remember to have your team take a photo on their phone and email it through to a central contact person – it will save running around to every car, or missing records where employees forget.
If you have any questions regarding the above, please reach out to your Relationship Manager.
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Am I eligible for the JobKeeper Payments?
Eligible employers
Employers will be eligible for the subsidy if:
- their turnover has or will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
- Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Eligible employees
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- 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; and
- are not in receipt of a JobKeeper Payment from another employer.
If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
How do I measure my percentage decline in 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
What do I have to do to get the JobKeeper Payments?
Initially, employers can register their interest in applying for the JobKeeper Payment here from 30 March 2020.
Subsequently, eligible employers will be able to apply for the scheme by means of an online application.
How much are the JobKeeper Payments?
For each eligible employee the employer will receive $1,500 per fortnight per employee for a maximum period of 6 months. The employer must pass the full amount of the JobKeeper payment on to the employee.
For employees that were already receiving $1,500 per fortnight before tax from their employer as wages then their income will not change. For employees that have been receiving less than $1,500 per fortnight, the employer will need to top up the payment to the employee up to $1,500, before tax. For those employees earning more than this amount, the employer is able to provide them with a top-up to their normal salary.
Do I still have to pay super and if so, on which amount?
Yes, the business is still required to pay superannuation guarantee on the amount of the employee’s normal wage. If the employee earned under the $1,500 per fortnight, then it will be up to the employer if they want to pay superannuation on any additional wage paid over and above their normal wage because of the JobKeeper Payment.
When will I start to receive the money?
The payments will be calculated from 30 March 2020, with the first payment to be received by employers from the ATO in the first week of May and will continue to be received monthly in arrears.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO (via Single Touch Payroll) to confirm their continued eligibility.
What if I am self-employed?
Businesses without employees, such as the self-employed can still register, they will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
Further details will be provided on the ATO website when it becomes available.
Read more on the Treasury fact sheet here.
See the latest updates on COVID-19 and how it may affect you here.
The ATO has set out ways it can help taxpayers deal with COVID-19. This is not to be confused with the Federal or State Government’s stimulus packages. Taxpayers will have to apply to the ATO for tax relief.
What types of relief are available from the ATO?
The ATO has provided the following options as possible ways to obtain tax relief.
- The ATO may allow payments for income tax, GST, PAYG instalments, FBT and excise to be deferred – for up to six months.
- Taxpayers may get quicker access to GST refunds by changing from quarterly to monthly reporting. If a change is made now, the first monthly tax period will be the one starting on 1 April 2020.
Changing reporting periods has other consequences – if taxpayers are considering changing before 1 April 2020, please check that these other consequences are acceptable before changing.
- Taxpayers can vary their quarterly PAYG instalment for the March 2020 quarter. The ATO says it will not apply penalties or charge interest to varied instalments for the 2020 income year.
- The ATO may remit interest and penalties incurred after 23 January 2020.
- The ATO may be prepared to enter into ‘low interest’ payment plans.
Taxpayers who are employers need to continue to meet their compulsory superannuation obligations. The ATO does not have the power to defer or vary any superannuation contribution dates and cannot waive the superannuation guarantee charge.
How to apply to the ATO?
Taxpayers will need to apply to the ATO for relief. We expect the ATO will be willing to help taxpayers affected by COVID-19 as much as possible. However, it will be important to explain to the ATO how COVID-19 is affecting the business, and how the relief that is being asked for will help.
Please contact a member of our team if you would like any assistance.
Support if you are experiencing difficulties.
See the latest updates on COVID-19 and how it may affect you here.
