Latest News

Last updated 03/06/2022

DPN, ASIC deregistration, and a director’s personal liability

Article by Worrells
Author: Daniel Alcock

Director liability and inability to act early don’t go well together.

The path with least resistance (but most definitely the most paved with trouble) for directors contending with their company’s financial troubles is to be in a state of denial. The common misconception that the company structure will always protect them from personal liability works to being in denial’s favour.

Many readers, however, are well aware company debts may become the director’s personal debts in certain circumstances, thereby piercing the corporate veil. Early intervention with appropriate and timely advice can preserve the corporate veil and reduce or avoid a director’s personal exposure to a company’s debts.

Company debts commonly attach to directors personally through: 

  • Giving personal guarantees over company debts.
  • Trading insolvently.
  • Receiving liquidator claims, including:
    • Director (debit) loan accounts the director owes to the company.
    • A director’s statutory indemnity to the Australian Taxation Office (ATO) for any successful preference payments.
    • Exposure resulting from voidable transaction claims.
    • Exposure resulting from entering into an agreement or transaction to avoid employee entitlements.
    • Directors’ duties breaches.
  • Committing company offences through certain legislation that can make a director personally liable (e.g. environmental protection offences, certain statutory building insurance claims).
  • Receiving a director penalty notice (DPN) the ATO can issue.

While proper consideration of all of the items above is important, DPNs often come as the biggest surprise to directors. This is currently an especially important topic as the ATO has recently awoken from its COVID slumber and is issuing some 30-40 DPNs daily. And that number is set to increase.

We have written plenty about DPNs, however a recent matter in Worrells Melbourne highlighted the importance of early action when a company is insolvent. A director, Mr X, came to us for advice about a non-lockdown DPN for $430,000. The DPN regime makes directors (jointly and severally) personally liable for a company’s tax debts for PAYG, “net GST” (GST, LCT, WET), and superannuation guarantee charge (SGC) debts. Two types of DPN can be issued: non-lockdown, and lockdown. As the names suggest, there’s options for directors in the non-lockdown DPN scenario, which include paying the amount in full and three insolvency appointments—small business restructuring, voluntary administration, and liquidation. Directors can receive a non-lockdown DPN in relation to debts arising from tax lodgements lodged within the prescribed timeframes.

The clock on these options is that one must be exercised within 21 days of the date of the DPN notice. This is critical as it’s not the date the notice is received that is relevant, and the ATO is not required to ensure the director is aware of or actually received the DPN. A DPN is sent to the address on the Australian Securities and Investments Commission (ASIC) record for each director. 

What about Mr X?

Luckily Mr X kept his ASIC record up to date and sought advice from us within a few days of receiving this non-lockdown DPN. But in the face of company financial problems, he let the company sit dormant for some time and as a result ASIC took strike-off action and deregistered it.

This series of events substantially complicated matters as Mr X could not re-register the company within the DPN 21-day timeframe to then place it into liquidation. The $430,000 DPN penalty locked down as a personal liability of Mr X and the only option now available to him is personal bankruptcy, as he does not have sufficient funds to pay the DPN.

A key lesson here for directors to mitigate personal exposure to company tax debts is to face the circumstances in the knowledge that there’s support for you to get appropriate advice to help you turn your situation around or guide you through the insolvency processes. Additionally, if it’s not too late, and regardless of whether the company can pay its tax debts, directors must ensure the company’s tax lodgements are lodged within the prescribed timeframes, to avoid a lockdown DPN. 

If you have any questions regarding DPNs or this type of situation, please contact our office so we can put you in contact with Worrells.

 

 

Last updated 4/4/2022

Federal Budget 2022/2023 –  provided by the NTAA

1. Personal income tax changes

1.1 Increase to low and middle income tax offset (‘LMITO’)
The Government has announced a once-off $420 ‘cost of living tax offset’ for the 2022 income year, which will be provided in the form of an increase to the existing LMITO. This will increase the maximum LMITO benefit to $1,500 for individuals and $3,000 for couples, and will be paid from 1 July 2022 when Australians submit their tax returns for the 2022 income year.

Other than those who do not require the full offset to reduce their tax liability to zero, all LMITO recipients will benefit from the full $420 increase. All other features of the LMITO remain unchanged.

To the extent an individual is entitled to an amount of LMITO for the 2022 income year under the current law, their entitlement is proposed to be increased by $420, as follows:

The LMITO is not available from the 2023 income year.

1.2 Increasing the Medicare levy low-income thresholds
The Government will increase the Medicare levy low-income thresholds for seniors and pensioners, families and singles from 1 July 2021 as follows:
• The threshold for singles will be increased from $23,226 to $23,365.
• The family threshold will be increased from $39,167 to $39,402.
• For single seniors and pensioners, the threshold will be increased from $36,705 to $36,925.
• The family threshold for seniors and pensioners will be increased from $51,094 to $51,401.

For each dependent child or student, the family income thresholds will increase by a further $3,619 instead of the previous amount of $3,597.

1.3 Tax deductibility of COVID-19 test expenses
The Government will ensure that the costs of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021. In making these costs tax deductible, the Government will also ensure FBT will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.

2. Changes affecting business taxpayers

2.1 Skills and training boost
The Government will introduce a skills and training boost to support small and medium-sized businesses to train and upskill their employees. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (i.e., Budget night) until 30 June 2024.

Small and medium-sized businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees. The external training courses will need to be provided to employees in Australia or online and delivered by entities registered in Australia.

Some exclusions will apply, such as for in-house or on-the-job training and expenditure on external training courses for persons other than employees. For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year.

For eligible expenditure incurred between 1 July 2022 and 30 June 2024, the boost will be claimed in the income year in which the expenditure is incurred.

2.2 Technology investment boost
The Government will introduce a technology investment boost to support digital adoption by small and medium-sized businesses. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (i.e., Budget night) until 30 June 2023.

Small and medium-sized businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services).

An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost. This equates to a maximum additional deduction of $20,000 per eligible year.

For eligible expenditure incurred by 30 June 2022, the boost will be claimed in tax returns for the following income year. For eligible expenditure incurred between 1 July 2022 and 30 June 2023, the boost will be claimed in the income year in which the expenditure is incurred.

2.3 Modernising the PAYG instalment system
The Government will enable companies to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments. This will support business cash flow by ensuring instalments reflect current performance.

Subject to advice from software providers about their capacity to deliver, it is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date.

2.4 Reporting of Taxable Payments Reporting System data
The Government will provide businesses with the option to report Taxable Payments Reporting System data (via accounting software) on the same lodgment cycle as their activity statements. Subject to advice from software providers about their capacity to deliver, it is anticipated that systems will be in place by 31 December 2023, with the measure to commence on 1 January 2024, for application to periods starting on or after that date.

2.5 Making COVID-19 business grants non-assessable non-exempt
The Government has extended the measures that enable payments from certain state and territory COVID-19 business support programs to be made non-assessable non-exempt income (‘NANE’) for income tax purposes until 30 June 2022. This measure was originally announced on 13 September 2020.

The Government has made the following state and territory grant programs eligible for this treatment since the 2021-22 Mid-Year Economic and Fiscal Outlook:
• New South Wales Accommodation and Support Grant.
• New South Wales Commercial Landlord Hardship Grant.
• New South Wales Performing Arts Relaunch Package.
• New South Wales Festival Relaunch Package.
• New South Wales 2022 Small Business Support Program.
• Queensland 2021 COVID-19 Business Support Grant.
• South Australia COVID-19 Tourism and Hospitality Support Grant.
• South Australia COVID-19 Business Hardship Grant.

2.6 Sharing of Single Touch Payroll (‘STP’) data
The Government has committed to the development of IT infrastructure required to allow the ATO to share STP data with State and Territory Revenue Offices on an ongoing basis.

Funding for this measure has already been provided and will be deployed following consideration of which States and Territories are able, and willing, to make investments in their own systems and administrative processes to pre-fill payroll tax returns with STP data.

2.7 Small Business Support Package
The Government will provide funding over three years from 2021/22 to deliver initiatives to support small businesses, including:

• $10.4 million over two years from 2022/23 to enhance and redesign the Payment Times Reporting Portal and Register to improve efficiency and reporting;
• $8.0 million in 2022/23 to the Australian Small Business and Family Enterprise Ombudsman to work with service providers to enhance small business financial capability;
• $4.6 million over two years from 2021/22 to support the New Access for Small Business Owners program delivered by Beyond Blue to continue to provide free, accessible, and tailored mental health support to small business owners; and
• $2.1 million over two years from 2021/22 to extend the Small Business Debt Helpline program operated by Financial Counselling Australia to continue to provide financial counselling to small businesses facing financial issues.

3. Other budget announcements

3.1 Extending the reduction in minimum drawdowns
The Government will extend the 50% reduction of superannuation minimum drawdown requirements for account-based pensions (‘ABPs’) and similar products for a further year to 30 June 2023 (i.e., for the 2023 income year).

Based on this change, the (effective) reduced minimum percentage factors for ABPs (including TRISs), which are used to calculate the minimum annual pension amount under Schedule 7 to the SIS Regulations, are set out in the following table for the 2023 income year.

Note that, for ABPs and TRISs that commence or cease part-way through the 2023 income year, a pro-rated minimum pension payment applies (unless the pension commenced on or after 1 June 2023, in which case, no minimum pension payment is required).

3.2 Varying the GDP uplift factor for tax instalments
The Government has decided to set the GDP uplift factor for PAYG and GST instalments at 2% for the 2023 income year. This uplift factor is lower than the 10% that would have applied under the statutory formula.

The lower uplift rate will provide cash flow support to small businesses, including sole traders and other individuals with investment income.

The 2% GDP uplift rate will apply to small to medium enterprises eligible to use the relevant instalment methods (i.e., up to $10 million annual aggregated turnover for GST instalments and $50 million annual aggregated turnover for PAYG instalments) in respect of instalments that relate to the 2023 income year and fall due after the enabling legislation receives Royal Assent.

3.3 Digitalising trust income reporting and processing
The Government will digitise trust and beneficiary income reporting and processing by allowing all trust return filers the option to lodge income tax returns electronically, increasing pre-filling and automating ATO assurance processes.

This measure acknowledges that trust income reporting has not been automated to the same extent as individual and company tax returns.This measure will reduce the compliance burden, reduce processing times, and enhance ATO processes.

This measure is proposed to commence from 1 July 2024, subject to advice from software providers about their capacity to deliver.

3.4 Expanding access to employee share schemes
The Government will expand access to employee share schemes and further reduce red tape so that employees of all levels can directly share in the business growth they help to generate.

Where employers make larger offers in connection with employee share schemes in unlisted companies, participants can invest up to the following amounts (thereby allowing employers to access simplified disclosure requirements and exemptions from licensing):

• $30,000 per participant per year (which is an increase from $5,000), accruable for unexercised options for up to five years, plus 70% of dividend and cash bonuses; or
• any amount, if it would allow them to immediately take advantage of a planned sale or listing of the company to sell their purchased interests at a profit.

The Government will also remove regulatory requirements for offers to independent contractors, where they do not have to pay for their interests.

3.5 Cost of living payment
The Government will provide a one-off $250 cost of living payment to help eligible recipients with higher cost of living pressures. The payment will be made in April 2022 to eligible recipients of the following payments and to concession cardholders:

• Age Pension.
• Disability Support Pension.
• Parenting Payment.
• Carer Payment.
• Carer Allowance (if not in receipt of a primary income support payment).
• Jobseeker Payment.
• Youth Allowance.
• Austudy and Abstudy Living Allowance.
• Double Orphan Pension.
• Special Benefit.
• Farm Household Allowance.
• Pensioner Concession Card holders.
• Commonwealth Seniors Health Card holders.
• Eligible Veterans’ Affairs payment recipients and Veteran Gold cardholders.

The payments are exempt from tax and will not count as income support for the purposes of any income support payment. A person can only receive one economic support payment, even if they are eligible under two or more categories outlined above.

The payment will only be available to Australian residents.

3.6 Temporary reduction in fuel excise
The Government will help reduce the burden of higher fuel prices by halving the excise and excise

  • equivalent customs duty rate that applies to petrol and diesel, and all other fuel and petroleum
  • based products except aviation fuels, for six months. This measure will commence from 12.01am on 30 March 2022 and will remain in place for six months.

 

 

Last updated 25/3/2022

Victorian Government Business Stimulation Package

Melbourne Dining Vouchers – ‘Melbourne Money’

The popular ‘Melbourne Money’ program returns with an additional $10 million in funding.

These vouchers can be used to reimburse 25 per cent of dining costs for meals from Monday to Thursday within the CBD when spending between $40 to $500.

Melbourne Money will encourage Victorians to seek out our city’s world-class food and dining businesses.

Melbourne Money is being delivered in partnership with the City of Melbourne through the Melbourne City Revitalisation Fund.

This program will open on 7 March 2022.

 

State-wide Dining Vouchers

A new $30 million State-wide Dining Vouchers program will be introduced to cover all of Victoria.

It will reimburse 25 per cent of dining costs for meals in regional Victoria and metropolitan Local Government Areas outside the Melbourne CBD from Monday to Thursday when spending between $40 to $500.

This program is expected to open on 29 March 2022.

 

Entertainment Voucher Scheme

A new $30 million Entertainment Voucher Scheme will reimburse part of eligible entertainment costs.

Discounts will be for tickets to:

  • the cinema
  • theatrical productions
  • live music
  • exhibitions
  • conferences
  • other events.

This program is expected to open on 29 March 2022.

 

Regional and Metropolitan Travel Voucher Scheme

Access a $200 voucher when you spend at least $400 on eligible tourism and travel related services.

$30 million has been set aside to expand the successful Regional and Metropolitan Travel Voucher Scheme, encouraging more Victorians to spend at tourism, attractions and events businesses.

This program will open on 23 March 2022 for travel between 8 April and 27 May.

An extra 10,000 vouchers will be set aside for Victorian Seniors that will be released through a ballot.

The ballot for Victorian Seniors travel vouchers will open on 15 March for travel between 8 April and 27 May.

 

Ventilation Voucher Program

  • $500 to support businesses buying air purifiers, ventilators and other COVID Safe maintenance, giving them confidence their business is COVID Safe
  • $60 million will be invested to offer up to $5,000 for matched grants to eligible small businesses to improve ventilation to help reduce the spread of COVID-19.

This could include investing in:

  • equipment
  • building works
  • maintenance services.
  • The $500 vouchers program will open in mid-March 2022.
  • The $5,000 matched grants will open late March 2022.

 

Small Business Digital Adaptation Program

  • A $1,200 rebate to access a range of digital business tools to help modernise business operations.

These could include:

  • online menus and ordering systems
  • invoicing
  • stock and business management tools
  • website and e-commerce platforms.
  • The third round of the program will offer a further $5 million.
  • This builds on the success of the first 2 rounds of the program, enabling many businesses to establish an e-commerce presence. This new funding will help an estimated 5,000 businesses to access a range of digital business tools.
  • This program will open on 28 March 2022

 

Last updated 12/11/2021

Application for Directors ID

From 1st November 2021, All Company Directors are required by law, to verify their identity with the Australian Business Registry Service (ABRS) by applying for a unique Director Identification Number (Director ID). 

This is applied for once and kept forever.

This unique 15 digit identification number will be used for any existing and future companies of which you are a Director.
The regime aims to reduce illegal phoenixing activity by ensuring that the Australian Taxation Office (ATO) can properly trace Directors between organisations. It is also necessary to promote good governance and significantly improve data security.

When do I need a Director ID?

Existing Directors
Required to apply by 30 November 2022

New Directors
New Directors appointed between 1 November 2021 and 4 April 2022 are required to apply within 28 days of appointment,
Any new Directors appointed from 5 April 2022 are required to apply before their appointment

You may be issued with an infringement notice if you do not apply within the given time frame.

How to apply?
Please note: Individuals will need to apply for their own Director ID. Hotchkin Hughes cannot apply for a Director ID on behalf of a client.

You must have a myGovID setup before you apply, this is an app you can download on your phone. If you do not have a myGovID, you can set one up by clicking here.
Alternatively, you can phone 13 62 50 to complete the application.

Once in myGovID you will need the following information:

  • your tax file number (TFN)
  • your residential address as held by the ATO
  • information from two other documents to verify your identity.

Examples of these documents include:

  • bank account details
  • an ATO notice of assessment
  • super account details
  • a dividend statement
  • a Centrelink payment summary
  • a PAYG payment summary (this is different to your income statement, and/or your PAYG instalment activity statement)

Please have 2 of these documents readily available

Refer to the ABRS website for more information

Using your Director ID

Your Director ID will need to be passed on to Hotchkin Hughes.
Please send your Directors ID to [email protected] to update your Company records

 

 

 

14 September 2020

JobMaker Explained

JobMaker is a credit available to eligible businesses for hiring additional employees (not if you are merely replacing someone who left). The hiring credit is available for jobs created from 7 October 2020 until 6 October 2021.

The credit provides:

  • $200 per week for new employees between 16 to 29 years of age, and
  • $100 a week for new employees between 30 to 35 years of age.

    Payment is from the start date of the employee for 12 months.

When do the credits start?

Credits can be claimed for employees hired from 7 October 2020 until 6 October 2021. The credit will be claimed quarterly in arrears by the employer from the ATO from 1 February 2021. The credit is an incentive for the employer to support wage costs and not passed onto the employee.

How can we access JobMaker?

There are three tests for JobMaker:

Employer eligibility – Has an ABN up to date with tax lodgements.
– Registered for PAYG Reporting through single touch payroll.
– Keeps adequate records of the paid hours worked by the employee they are claiming the credit for.
– Another employer is not claiming JobMaker for the same employee
Employee eligibility – Received the JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one month within the three months before they were hired.
– Between 16 and 35 years of age at the time their employment started.
– Worked at least 20 hours per week on average for the full weeks employed for the period being claimed.
– If the employee worked less than 20 hours, the employer cannot claim JobMaker for them during that period.
– Started work between 7 October 2020 and 6 October 2021
– The first year of employment with the employer.
– The employer is not receiving other forms of assistance from the Commonwealth Government for the employee, for example JobKeeper or an apprenticeship subsidy
Additional employee test (additionality test) The employers:
– Total employee headcount on the last day of the reporting period increased by at least one additional employee compared initially to 30 September 2020, then to the previous reporting period.
– Total payroll for the reporting period increased compared initially to the September quarter 2020 (July, August, September 2020), then to the previous reporting period.
– The hiring credit cannot exceed the increase in payroll.

 

 

Government entities or agencies, banks and other institutions subject to the bank levy, businesses in liquidation, and foreign Government entities (unless a resident entity), are unable to access JobMaker.

I can only claim JobMaker if the number of employees and payroll increases. What happens if one of my team resign? Through no fault of the business?

Your business can only receive JobMaker for your eligible employees if total employee headcount and payroll increases. If the headcount or payroll decreases or remains the same, JobMaker cannot be claimed for that period.

For example: If you had three staff at September 2020 and hired an additional two employees in late October 2020, your business can claim JobMaker for the two new employees assuming the business and the employer are eligible and payroll has increased compared to the September 2020 quarter. However, in December 2020, one of your original staff members resigns. As a result, your business can only claim JobMaker for one eligible employee in December as your headcount has increased by one, not two, compared to the September 2020 baseline.

A similar baseline concept applies to payroll. If you employed new eligible employees in October 2020 but your overall payroll remained the same or only increased marginally because the hours of your existing staff reduced when the two new employees were employed, then the JobMaker credit will only be the additional payroll amount. That is, if the JobMaker credit for the two employees for the quarter is $8,960, but payroll compared to the September 2020 quarter only increased by $1,200, then the JobMaker credit you receive would be $1,200. The JobMaker credit cannot exceed the increase in payroll.

Each month, employers will need to ensure they pass these ‘additionality’ tests before claiming.

Your headcount and payroll increase is measured on the last day of each reporting period from the date your first new employee started. For example, if your first new employee joined in October 2020, your baseline is set at that point. If a new employee starts in January 2021, your payroll and headcount baseline is measured from the last reporting period, in this case, December 2020 for headcount and the December quarter for payroll.  That is, your baseline commences from the date your new employee starts and then is reassessed each reporting period to ensure there is an increase.

If I don’t hire new staff until January 2021, can I claim JobMaker for 12 months or only up to 6 October 2021?

JobMaker is available for 12 months for eligible employees hired from 7 October 2020 until 6 October 2021. If you hire new employees from January 2021, JobMaker is available for 12 months for these employees assuming that the employees and business are eligible and the ‘additionality’ test is passed.

The baseline for the ‘additionality’ tests – headcount and payroll – starts from the start date of your new employee. The Government has indicated that the baseline for the ‘additionality’ test will be adjusted in the second year of the program to ensure an employer can only receive JobMaker for 12 months for each additional position created.  The detail of exactly how these rules will work has not been released as yet.

My business did not have employees in September but I hired my first employee in late October. Can I claim the JobMaker credit for them?

Businesses with no employees on 30 September, cannot claim JobMaker for their first employee. However, JobMaker can be claimed for your second and any subsequent employees that started on or before 6 October 2021.

Can the business get JobKeeper and JobMaker?

No. Once your business exits JobKeeper and is no longer receiving JobKeeper payments for any employees or business participants, if eligible, the business could then start to receive JobMaker credits. The business is eligible for the hiring credit in the reporting period following your JobKeeper exit date.

14 September 2020

Victorian Government Business Survival and Adaption Package

On 13 September 2020 a $3 billion support package for Victorian businesses in cash grants, tax relief and cashflow support will be available to those that have been most affected by the COVID-19 restrictions. This was announced by the Victorian Government in response to the extension of the lockdown period, previously due to finish on that date.

Immediate response will be a third round of Business Support Fund Grants.

An eligible business will receive:

  • $10,000 if its annual payroll is less than $650,000
  • $15,000 if its annual payroll is between $650,000 and $3 million
  • $20,000 if its payroll is between $3 million and $10 million.

Applications are due to open shortly and a full list of the eligibility criteria will be provided at that time.
A link to the application page is provided here

A summary of all proposed packages as at the current date are detailed below. 

Business Survival

  • Small and medium sized business ($822 million): The third round of the Business Support Fund will provide up to $20,000 for business with a payroll of up to $10 million:
  • Licensed Hospitality Business ($251 million): Grants of up to $30,000 for licensed pubs, clubs, hotels, bars, restaurants and reception centres, based on their venue capacity and location.
  • Business Chambers and Trader Groups ($3 million): A competitive grants program to support metropolitan and regional business chambers and trader groups.
  • Alpine businesses ($4.3 million): Grants of up to $20,000 to help alpine businesses pay a service charge to Alpine Resort Management Boards.

Business Adaptation

The package also provides additional funding, tools and resources to help businesses adapt and prepare for reopening under COVID normal settings.

  • $20 million voucher program to assist sole traders and small businesses in building their digital capability
  • $15.7 million package to help Victorian exporters get their products to market and establish new trade channels.
  • $8.5 million expansion to the ‘Click for Vic’ campaign to encourage more Victorians to support local businesses.

Waivers and deferrals

The Government is also providing $1.8 billion in tax and cashflow support.

  • $1.7 billion in payroll tax deferrals for the full 2020-21 financial year
  • $41 million to bring forward the 50% stamp duty discount for commercial and industrial property for all of Regional Victoria.
  • $33 million to defer the planned increase in the landfill levy for six months
  • $30 million to waive 25% of the Congestion Levy this year, with the outstanding balance deferred.
  • $27 million in liquor license fee waivers for 2021
  • $6 million to waive Vacant Residential Land Tax for vacancies in 2020.

Should you have any queries please do not hesitate to contact our office.

14 August 2020

JobKeeper Scheme – URGENT Action Required

A legislative instrument was registered on 14 August 2020 amending the current JobKeeper rules to allow businesses to claim the subsidy in respect of new employees with a revised eligibility date of 1st July 2020 (previously 1 March 2020).  These same rules will also apply for eligible business participants where applicable.

These changes apply to JobKeeper payments beginning on or after 3 August 2020 (FN 10 & 11 onwards).

This means you may be able to claim JobKeeper for more employees.

Full details are available on our dedicated JobKeeper page https://hotchkinhughes.com.au/jobkeeper-payment/

7 August 2020

Expanded JobKeeper 3.0 Scheme

In light of the recent introduction of Stage 4 Restrictions to the Melbourne Metro area and Stage 3 Restrictions for the rest of Victoria and the affect that this will have on businesses over the next 6 weeks and beyond, two major changes have been announced today by the Federal Government as this scheme moves beyond September 27 – now to be called JobKeeper 3.0.

Full details are available on our dedicated JobKeeper page https://hotchkinhughes.com.au/jobkeeper-payment/

Victorian Government Business Support Grant Expansion

To support businesses impacted by these restrictions, one-off grants will be made available to eligible businesses under the Business Support Fund – Expansion program:

  • $10,000 for employing businesses in metropolitan Melbourne and Mitchell Shire in recognition of spending longer under restrictions
  • $5,000 for employing businesses in regional local government areas (except Mitchell Shire)

Businesses which have already received a Business Support Fund – Expansion grant, or have applied for one, will not need to re-apply. Successful applicants will automatically receive this additional allocation.

Applications for the program will be extended until 14 September 2020.

This program is in addition to the first round of the Business Support Fund, which closed on 1 June 2020.

Please refer to the link below for further information in relation to this grant and to commence the application process, or alternatively if you would like us to apply on your behalf, contact our office .

https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-package/business-support-fund

To be eligible for the Fund, businesses must meet ALL of the following criteria:
a) Operate a business located within Victoria; and
b) Be a participant in the Commonwealth Government’s JobKeeper Payment scheme; and
c) Employ people and be registered with WorkSafe on 30 June 2020; and
d) Have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis; and
e) Be registered for Goods and Services Tax (GST) on 30 June 2020; and
f) Hold an Australian Business Number (ABN) and have held that ABN at
30 June 2020; and
g) Be registered with the responsible Federal or State regulator.

Owners of businesses that do not employ people (non-employing businesses) are not eligible for funding.

______________________________________________________________________________

Summary of State and Commonwealth Victorian Business Assistance Packages

Victorian Government assistance for businesses in response to coronavirus (COVID-19).

$3 billion economic survival and jobs package

Business Support Fund

The $500 million Business Support Fund supported Small and Medium Enterprises (SMEs) within the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail. A one-off $10,000 grant was available to businesses. Applications are now closed.

Working for Victoria Fund

Under the $500 million Working for Victoria Fund, displaced workers will be eligible to apply for different types of work. This presents opportunities for paid work and a chance to contribute to Victoria’s ability to manage this event and support the community. Apply now.

Payroll Tax Refund

Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived, giving $550 million back to businesses who need it. Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year. These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year. More information.

Payroll tax exemption for additional payments made under the JobKeeper program

For employers participating in the Commonwealth Government’s JobKeeper program, “additional payments” you make to employees are now exempt from payroll tax. For payments to employees that have been stood down, the full $1,500 per fortnight is exempt. The additional payments are also excluded for the purposes of calculating WorkCover Premiums. More information.

Commercial tenancies relief scheme

The Victorian Government will immediately introduce a commercial tenancy relief scheme to alleviate the financial hardship faced by tenants and landlords as a result of COVID-19. More information.

Rent relief for commercial tenants in government buildings

The Victorian Government will work directly with commercial tenants in government buildings who can apply for rent relief. Private landlords are also being encouraged to provide rent relief or holidays to help businesses.

Land tax relief

Landowners who have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020. Landlords who provide tenants impacted by COVID-19 with rent relief may be eligible for a 25 per cent reduction on the property’s 2020 land tax. More information.

Liquor licence fees waived

Renewable liquor licence fees for 2020 will be waived. Businesses who have already paid will be reimbursed. More information.

Experience Economy Survival Package

The Victorian Government is backing Victorian sport, tourism and creative industries, with $150 million to support sporting clubs and competitions across the state – from grassroots to elite – as well as major tourist attractions, galleries and museums, and the racing industry. More information.

Night-time Economy Business Support Initiative: support for pubs, clubs and restaurants

This Initiative recognises that these venues, unlike many other commercial tenants, have complex licencing and leasing arrangements. $40 million from the Business Support Fund will be made available to provide rent relief for licenced venues with an individual annual turnover of up to $50 million, but who are not covered by the Commercial Tenancy Relief Scheme. Register your interest.

Sustaining Creative Workers initiative

The initiative delivers quick-response funding to professional independent creative practitioners, sole traders, freelancers, collectives and micro-organisations/businesses whose work and livelihoods have been negatively impacted by coronavirus. Applications are now closed.

Victorian Business Growth Fund (VBGF)

The $250 million VBGF is now open to support long‑term growth opportunities for businesses and boost employment and economic development across the State. Established by the Victorian Government and First State Super, the Fund will operate for 10 years and will help to address barriers faced by successful small and medium enterprises (SMEs) that are ready to grow their business but can’t access the funds or find the right partner they need to take the next step. Roc Partners has been engaged to manage the VBGF. Express your interest through Roc Partners’ website.

For further information about the Victorian Government assistance for businesses in response to coronavirus (COVID-19) call the Business Victoria hotline on 13 22 15 or visit the website.

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Commonwealth Government assistance for businesses in response to coronavirus (COVID-19).

$320 billion economic response package

JobKeeper Payment

Under the JobKeeper program, businesses will be able to access a wages subsidy to continue paying their employees: a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. More information.

Boosting cash flow for employers

Up to $100,000 will be available for eligible small and medium sized businesses (SMEs) and not-for-profits (NFPs) that employ people, with a minimum payme­­­nt of $20,000. More information.

Temporary relief for financially distressed businesses

The Commonwealth Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company. The Australian Taxation Office (ATO) will tailor solutions for owners or directors of business that are currently struggling due to coronavirus. More information.

Supporting the flow of credit – SME Guarantee Scheme

SMEs with a turnover of up to $50 million will be eligible to receive a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to be used for working capital. The Scheme will guarantee up to $40 billion of new lending. More information.

Increasing the instant asset write-off

The instant asset write-off (IAWO)threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. More information.

Backing Business Investment (BBI)

BBI is a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. More information.

Supporting apprentices and trainees

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

More information.

Assistance for affected regions, communities and industries

The Commonwealth Government is providing $1 billion to support regions, communities and industries most significantly affected by the coronavirus outbreak. A major relief package of up to $715 million is also available to support the airline industry. More information.

For further information visit the Treasury website and business.gov.au.

Assistance for exporters in response to coronavirus (COVID-19)

Increase in Export Market Development Grants

The Commonwealth Government has increased funding for the Export Market Development Grant (EMDG). Funding for the scheme will increase by $49.8 million in the 2019-20 financial year, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.

This increase supplements the additional $60 million already committed by the Government and brings EMDG funding to its highest level in more than 20 years at $207.7 million for the 2019-20 financial year. More information.

International Freight Assistance Mechanism

The new $110 million International Freight Assistance Mechanism will assist Australia’s agricultural and fisheries sector by helping them export their high-quality produce into key overseas markets, with return flights bringing back vital medical supplies, medicines and equipment.

Exporters wishing to access the mechanism can register their interest or call the Department of Agriculture, Water and the Environment on (02) 6272 2444.

COVID-19 Export Capital Facility

The Commonwealth Government has established a $500 million COVID-19 Export Capital Facility to assist previously profitable Australian exporters whose businesses have been impacted by COVID-19.

Exporters will be able to access loans from $250,000 to $50 million under the Facility. The Facility will complement other measures announced by the Government which enable banks to support new and existing clients.  Exporters should contact their banks in the first instance to determine what assistance may be available to them.

For further information visit the Export Finance Australia website or call 1800 093 724.


Useful links and resources for businesses impacted by coronavirus (COVID-19)

  • Austrade: receive the latest insights for exporters by visiting the Austrade website.
  • Australian Industry Group: explore tools and other resources by visiting the AI Group website.
  • Australian Information Industry Association: Australian Business Continuity offers tools, information and free services for businesses to keep functioning with minimal disruptionthrough technology.
  • Australian Taxation Office: visit the ATO website for up-to-date information and advice to business.
  • Business Victoria: find tips on how to create a continuity planevaluate risk and prepare a risk management plan. Learn how to respond and recoverBook a low-cost appointment with a mentor  to help you work through or develop a recovery plan.
  • City of Melbourne: for information on grants for SMEs and NFPs, visit the City of Melbourne website.
  • Committee for Economic Development of Australia (CEDA): explore the latest insights and webinars by visiting the CEDA website.
  • CPA Australia: receive high-level tips, including access to Disaster Recovery Toolkits by visiting the CPA Australia website.
  • Creative Victoria: information for the creative industries is available on the Creative Victoria website.
  • Export Council of Australia: for updates on supply chains and freight and a suite of tools and resources for exporters visit the ECA website.
  • Export Finance Australia: find support and resources for exporters during the coronavirus outbreak by visiting the Export Finance Australia website.
  • Sport and Recreation Victoria: information for the sport and recreation industries is available on the Sport and Recreation Victoria website.
  • Treasury: The Coronavirus Business Liaison Unit has been established to engage with business on a regular basis and provide updates to government on crucial issues. Visit the Treasury website to find out more.
  • Victorian Chamber of Commerce and Industry: register for free annual membership and access coronavirus business resources by visiting the Victorian Chamber of Commerce and Industry website.
  • Visit Victoria: information for tourism and events industries is available on the Visit Victoria website.
  • Workers in Transition: this support provides information, tools and resources to help both business and workers through retrenchment and into new opportunities. For more information, visit the Business Victoria website.

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