In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
Businesses that are seeking to participate in the second JobKeeper extension from the 4th of January to the 28th of March must test their eligibility and meet the wage condition by the 31st of January.
In assessing eligibility, businesses will need to test the decline in turnover for the quarter ending the 31st of December 2020 to determine whether it exceeds the relevant threshold, being:
- 50% for businesses with turnover in excess of $1b;
- 15% for ACNC registered charities; and
- 30% for all other businesses.
Businesses that are continuing in the second extension period should also be mindful that the fortnightly payment rates in the second extension period have dropped to:
$1,000 for Tier 1 employees; and
$650 for Tier 2 employees.
If you need assistance to determine your eligibility or complete the testing process in the ATO system, please get in touch.
Minimum Pay Rates Increasing From 1 February
Back in June 2020, the Fair Work Commission announced a 1.75% increase to minimum wages. Due to the impact of the Coronavirus pandemic, the increases were set to apply to different awards progressively.
The minimum wage rates in Group 3 Awards will be increasing from the 1st of February. Group 3 Awards cover the industry’s most heavily impacted by the Coronavirus pandemic and include the:
- General Retail Industry Award;
- Hair & Beauty Industry Award;
- Hospitality Industry (General) Award;
- Registered & Licenced Clubs Award; and
- Restaurant Industry Award.
The Fair Work Ombudsman will soon issue updated Pay Guides to reflect the new minimum wages.
If you have staff that are subject to a Group 3 Award, please keep an eye out for the new Pay Guides to ensure that you continue to pay staff correctly.
If you are not sure if an Award applies to your staff, or if you need assistance to implement the new pay rates, please get in touch.
Research & Development Tax Incentive
The R&D Tax Incentive is a program jointly administered by AusIndustry and the ATO. The objective of the program is to foster Australian innovation by providing a tax incentive to firms that undertake eligible R&D activities.
Under the R&D Tax Incentive, eligible companies receive a tax offset for R&D expenditure on qualifying activities.
The due date for registering R&D activities for the 2019/2020 year is the 30th of April 2021.
Extensions of time to submit an application are extremely rare. If applications are not lodged on time, the company will simply miss out on its opportunity to claim the R&D Tax Incentive.
As such, companies should be prioritising the preparation of their R&D application to ensure that they can meet the April deadline.
If you need assistance to determine your eligibility and to assess the likely benefits for your business, please get in touch. Likewise, if you need assistance to submit your R&D application, we are here to help.
Protections for Businesses & Individuals Experiencing Financial Difficulties Have Expired
In response to the Coronavirus pandemic, the Government announced a number of temporary protections for businesses, including:
- relief for Directors from personal liability for trading whilst insolvent;
- an increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond; and
- an increase in the threshold for a creditor to initiate bankruptcy proceedings and the time to respond to a bankruptcy notice.
These temporary measures expired on the 31st of December. As such, any companies or individuals experiencing financial difficulties should now be taking proactive steps to manage their situation.
The Government has introduced insolvency reforms that came into effect on the 1st of January to assist struggling small businesses to either restructure or liquidate.
If you or your business are experiencing serious financial difficulties, please get in touch so that we can assist you to understand your options and obligations. We can also put you in touch with experienced professionals who can help you to manage the situation in the best way possible.
Quote of the Month
With Chinese New Year celebrations commencing shortly, we are reminded of the numerous Chinese proverbs that are so full of insight and wisdom.
So instead of sharing a quote, we thought we would share one of our favourites, which goes a little something like this……
The best time to plant a tree was 20 years ago. The second best time to plant a tree is today.
We cannot go back in time and do something we ought to have. However, we can do the next best thing and take action today.
What should you do today that your future self will thank you for?
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