In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
Fair Work Commission Annual Wage Review 2019-20
In its Annual Wage Review 2019-20 decision, the Fair Work Commission has awarded an increase of 1.75% to the National Minimum Wage bringing it to $753.80 per week ($19.84 per hour). The increase applies from the first full pay period starting on or after the 1st of July 2020.
Modern award minimum wages will also be increased by 1.75% in three stages as follows:
- Group 1 Awards – from the 1st of July 2020;
- Group 2 Awards – from the 1st of November 2020; and
- Group 3 Awards – from the 1st of February 2021.
The purpose of the staged changes are to soften the impact of the increase on those industries hardest hit by the Coronavirus pandemic such as the hospitality and tourism industries.
The Fair Work Ombudsman website provides guidance on the changes, including which awards fall into which group. The Fair Work Ombudsman will also be updating their award pay guides to reflect the Fair Work Commission decision.
Employers are encouraged to familiarise themselves with the upcoming changes to ensure that they continue to meet minimum wage requirements.
$150,000 Instant Asset Write-off
On the 19th of June, Treasury Laws Amendment (2020 Measures No.3) Bill 2020 received Royal Assent. Amongst other measures, this Bill amends the income tax law to allow a business with an aggregated turnover of less than $500 million to immediately deduct the cost of a depreciating asset costing less than $150,000 provided it is first used or installed ready for use by the 31st of December 2020.
Prior to the amendments the $150,000 instant asset write-off was scheduled to have ended on the 30th of June 2020.
The $150,000 write-off presents a good opportunity for businesses to invest in new equipment, vehicles and the like.
JobKeeper Program Review
In a media release issued at the beginning of June, the Government announced that its review of the JobKeeper Program is expected to conclude by the end of June. Accordingly, the economic and fiscal update has been deferred to the 23rd of July 2020 so that it can incorporate the outcomes of the review.
With the Treasurer holding the power to unilaterally change the rules of the JobKeeper Program without consultation or the need to go through Parliament, there is much speculation that there are changes coming.
Adding fuel to the speculation fire, the Government has announced changes to the eligibility of child care providers as a result of the resumption of the Child Care Subsidy.
Whilst it is too early to be jumping to any conclusions about what might change when, it is not too early to be working on strategies to reduce your businesses reliance on the JobKeeper Program.
In other words, businesses should have a plan as to what actions they can take to sure up their cash flow and profitability should their access to the JobKeeper Program be affected.
Victorian Coronavirus Restrictions
Due to escalating cases in metropolitan Melbourne, the Victorian Government has made changes to the planned easing of restrictions on households and businesses. Details of the current restriction levels, applicable to the 19th of July, can be found on the Health and Human Services website.
In a blow to the hospitality industry, the planned increase from 20 to 50 patrons onsite has been deferred.
We encourage all businesses and individuals to take the time to educate themselves on the current restriction levels and to exercise caution. Businesses in particular must be mindful of their OH&S obligations to staff and also the safety and well-being of their patrons.
We recommend that businesses access the resources available from Safe Work Australia to assist them to operate safely and in compliance with their legal obligations.
Tax Time 2020
With end of financial year just days away, we are receiving a lot of enquiries about arrangements for preparation of 2019/20 income tax returns.
Whilst our offices remain closed, we are still very much at work and are here to assist you with your business and taxation requirements.
The safety of our clients and staff is paramount and we take very seriously the directives of the Chief Health Officer to prevent community transmission of Coronavirus.
Unfortunately, this means that we are unable to offer face to face appointments for preparation of tax returns at this time. In light of this, we have arrangements in place to run tax time appointments using video conferencing technology or by telephone.
In the meantime, we will continue to monitor the directives of the Chief Health Officer and look forward to being able to catching up with all of our clients in person soon.
Quote of the Month
The latest Coronavirus developments in Victoria will surely have taken the wind out of the sales of many. Particularly those in heavily affected industries such as hospitality and tourism.
In these difficult times, tenacity and grit are valuable commodities that will no doubt have a significant influence on our ability to survive this period and thrive on the other side.
As Harriet Beecher Stowe, the American abolitionist and author wrote, “the longest way must have its close – the gloomiest night will wear on to a morning.”
Let us all reflect on those words and harden our resolve to persevere.
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Sunbury & Gisborne
Phone: 03 97444522
Sunbury Office Address: Suite 13, 33-35 Macedon Street, Sunbury, Victoria 3429, Australia
Gisborne Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437