In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
Support for Victorian businesses impacted by the “circuit breaker”
On the 21st of February, the Victorian government announced support for Victorian businesses affected by the recent lock-down.
The Circuit Breaker Action Business Support Package consists of:
- A business costs assistance program
Eligible businesses with payroll of up to $3m can receive a one-off grant of $2,000 where they have incurred costs through loss of perishable food items and cancelled bookings.
- Licensed Hospitality Venue Fund
Those businesses that previously received a grant through the Licensed Hospitality Venue Fund will receive a further $3,000 payment. Businesses that receive this payment cannot also receive a grant under the business costs assistance program.
Businesses do not need to apply. The government will process the payments in due course based on the records it holds from the earlier payment.
- Victorian Accommodation Support Program
The program will offer accommodation providers funding based on booking cancellations as follows:
- Tier 1: $2,250 (excl. GST) per accommodation premises experiencing 10 or fewer cancelled nights; and
- Tier 2: $4,500 (excl. GST) per accommodation premises experiencing 11 or more cancelled nights.
Accommodation providers can register their interest here to receive more information about applying as it becomes available.
- Travel Voucher schemes
Two schemes will be used to encourage travel throughout Victoria to stimulate the tourism industry.
The schemes will be:
- A new Melbourne Travel Voucher Scheme with 40,000 vouchers to support travel in greater Melbourne; and
- An expanded Regional Travel Voucher Scheme with an additional 10,000 vouchers to support travel in regional Victoria.
If you have any questions relating to the Circuit Breaker Action Business Support Package, please get in touch.
Self-managed Superannuation Fund (SMSF) loans
For many years it has been a popular investment strategy for SMSF to purchase residential investment properties using loans known as Limited Recourse Borrowing Arrangements (LRBA).
However, in recent years a number of lenders have either exited the market or scaled back their SMSF lending options making this strategy a challenging proposition for SMSF trustees to implement.
Bucking this trend, Firstmac have recently announced the launch of a new SMSF lending product.
If you are interested in finding out more about the new Firstmac SMSF lending product, please get in touch. Our in-house broker Kevin Mortimer can provide an overview of the key features and help you to understand your SMSF lending options.
Fringe Benefits Tax 2021
FBT is a tax payable by employers on non-cash benefits provided to employees. This is essentially any benefit provided to employees beyond their normal salary and superannuation.
Common examples of Fringe Benefits are:
- Private use of business vehicles;
- Car parking;
- Provision of entertainment;
- Payment/reimbursement of private expenses;
- Provision of loans;
- Provision of goods/services from the business; and
- Living Away From Home Allowances (LAFHA).
Where an employer provides Fringe Benefits to employees, those benefits must be valued in accordance with the legislation and the employer then pays FBT at the rate of 47%.
There are a number of exemptions & concessions that can be accessed by employers to reduce or eliminate the FBT liability. For example, low value benefits (< $300) may be eligible for the Minor Benefits exemption.
There are also specific rules, concessions & exemptions that apply to employers operating in the not-for-profit sector.
The Coronavirus pandemic has had a number of implications for determining where Fringe Benefits have been provided, how they are valued and whether there is an exemption. Earlier in February, the ATO updated their guidance dealing with the FBT impacts associated with the Coronavirus pandemic.
With the FBT year ending on the 31st of March 2021, employers should be taking steps to ascertain their FBT position and to prepare to lodge a FBT return where necessary.
If you require assistance to review the FBT position of your business, or advice on how to achieve the best outcomes, please get in touch.
With the first batch having reached our shores, the rollout of Coronavirus vaccinations has commenced.
Whilst the government is encouraging as many people as possible to get vaccinated, there are currently no laws or public health orders that make vaccination mandatory.
The broader availability of the vaccination in the coming weeks and months will inevitably raise a number of issues in the workplace that employers will need to navigate.
We encourage all businesses to read this guidance so that they are prepared to manage the impact of the vaccination rollout in their workplaces.
There has also been some suggestion that businesses may be able to lawfully refuse entry/service to customers who have not been vaccinated. Whether such a policy would breach anti-discrimination legislation is currently unclear.
The low rate of vaccination means that such a policy is not practical at the current time. However, businesses should keep an eye on this as it is likely to become a live issue in the coming months.
Fuel Tax Credits
Fuel Tax Credits provide businesses with a credit for the fuel tax that’s included in the price of fuel used in:
- Plant & equipment;
- heavy vehicles; and
- light vehicles travelling off public roads or on private roads.
The amount of the credit depends on the date of acquisition of the fuel, the type of fuel and the activity it is used in.
Fuel Tax Credit rates also change periodically. As such, it is important to check regularly to ensure the correct rate is used.
The most recent change applies from the 1st of February and the new rates can be found here.
If you would like to know more about the Fuel Tax Credits scheme and/or the methods for claiming, please get in touch.
Quote of the month
2020 is a year that we are glad to have put behind us. With Coronavirus restrictions significantly eased, we were all looking to make the most of 2021 and return to something that resembles normalcy.
However, recent incidents around the country and the significant issues persisting internationally have highlighted that we are not out of the woods just yet. Indeed, they are an indication that we need to make more lasting changes.
And with government support being withdrawn moving into 2021, there is now an urgency for businesses to adapt their operating models to work in the current environment.
In this new environment, we must be focused not on what worked in the past, but rather what innovation will work into the future. Albert Einstein captured this sentiment when he said “imagination is more important than knowledge. For knowledge is limited to what we know and understand, while imagination embraces the whole world, and all there ever will be to know and understand”.
In these uncertain times, survival and prosperity will be driven less by what we previously knew to be true and more by our ability to engage our imagination to come up with fresh new ideas and ways of doing things.
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Phone: 1300 328 855
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Postal Address: PO Box 270 Gisborne Victoria 3437