In this Sky Update, we bring you all the latest tax news along with some other items that may pique your interest.
JobMaker Hiring Credit
In the Federal Budget delivered on the 6th of October, the Treasurer announced the JobMaker Hiring Credit scheme.
Under JobMaker, employers will be given a credit when they create new jobs and hire young people who have been receiving JobSeeker income support payments in at least one of the three months before they were hired.
It is intended that the credit will be available for up to twelve months for all new jobs created from the 7th of October.
The credit will be:
- $200 per week for each eligible employee aged between 16 & 29; and
- $100 per week for each eligible employee aged between 30 & 35.
There will be a number of conditions to be satisfied to access the scheme, including that the business is not currently participating in the JobKeeper scheme.
The rules for the JobMaker scheme will be set-out in a Legislative Instrument to be made by the Treasurer. However, before that can happen, the Government must pass enabling legislation.
The Economic Recovery Package (JobMaker Hiring Credit) Amendment Bill 2020 was introduced into the House of Representatives on the 7th of October and was subsequently passed in the House on the 19th of October.
The Bill has since been referred to Senate Economics Legislative Committee that is due to report on the 6th of November.
We will not know the substance of the rules until sometime after then when the Bill will be debated and voted on in the Senate.
The JobMaker Hiring Credit could be a fantastic opportunity for businesses to take on new workers and we are already hearing a lot of interest being expressed.
With the devil being in the detail, we urge business to proceed with caution. Until the finer points of the scheme are revealed, there is a risk that employers could take on new employees for which they may not be eligible to receive the JobMaker Hiring Credit.
Contractor or Employee?
The recent MWWD and Commissioner of Taxation case is yet another in a long line that considers the perennially difficult question of when a contractor will be considered an employee for Superannuation Guarantee purposes.
The court confirmed that the “multi-factorial” approach must be applied to reach an appropriate conclusion as to the status of a contractor.
This means that regard must be had to all aspects of the relationship between the parties. In applying this approach, the court considered the following factors:
- The intention of the parties;
- The terms of the contract;
- The extent to which the principal exercised control over the contractor;
- The degree of integration of the contractor into the business of the principal;
- Exclusivity of the arrangements;
- Provision of tools and equipment;
- Remuneration and taxation arrangements; and
- Insurance arrangements and the allocation of risks between the parties.
Ultimately the court found that the contractor should not be deemed to be an employee for Superannuation Guarantee purposes.
This case serves to highlight the difficulties associated with determining when superannuation contributions should be made on behalf of contractors.
Businesses that utilise the services of contractors should make sure that they are across the requirements to ensure that they do not have an exposure to superannuation liabilities.
We also remind businesses that the rules associated with using contractors for Payroll Tax and Workers Compensation purposes vary to those that apply under the Superannuation Guarantee law. There are also variances from state to state.
If you need assistance to understand where you stand with the contractors you use in your business, please get in touch.
Personal Tax Rate Changes
As reported in our Federal Budget update, changes to personal tax rates have been brought forward to the 2021 financial year.
The legislation to confirm those changes has received Royal Assent and the tax cuts are now law.
The ATO has since updated the PAYG withholding tables to take account of the new tax rates and businesses have been given until the 16th of November to implement those new tax tables in their payroll software.
Employees can now look forward to seeing a few extra dollars in their pay packets.
Minimum Wage Increase from 1 November
From the first full pay period on or after the 1st of November, new minimum wage rates and allowances will apply in several awards including the construction, manufacturing, clerks, legal services, professional employees and real estate awards.
A full list of affected awards can be found here.
The Fair Work Commission will issue the updated awards on the 31st of October. The Fair Work Ombudsman will then issue updated pay guides shortly thereafter.
We recommend that businesses take the time to review the applicable awards that are being updated to ensure that they continue to meet the minimum requirements for their employees.
Subscribing to news alerts from the Fair Work Ombudsman is a good way for businesses to ensure that they keep abreast of the ever changing landscape.
The MyBusiness Awards are the largest independent awards program celebrating the achievement of SME businesses and professionals.
Nominations are now open in a range of categories including:
- Business leader of the year;
- FinTech business of the year;
- Hospitality business of the year;
- Professional services business of the year;
- Start-up business of the year;
- Workplace of the year; and
- Health services business of the year.
For a full list of the categories and the nomination requirements, see the Awards website.
Participation in the MyBusiness Awards can be a great opportunity to be recognised and to raise the profile of your business.
We encourage businesses that really believe in themselves to consider nominating.
Loan Health Check
The lending landscape has changed quite dramatically in recent times with historically low interest rates and many lenders providing cash-back offers and other attractive loan features.
Many borrowers have not had a review for some time and may have loans that are no-longer competitive.
To address this, we are providing a no cost, no obligation loan health check service.
We want to make sure that our clients are getting the best deal possible on their loans and encourage you to get in touch if you would like to organise a review of your loan.
Quote of the Month
As we near the end of October, the holiday period is coming into sight. It feels like the year was just beginning and in a whirlwind it is now almost over.
And what a year it has been. Beginning with horrific bushfires then leading straight into the Coronavirus pandemic. This is certainly a year that has contained much hardship and will not be forgotten for a very long time.
We could all be excused for holding the view that there is a lot wrong in the world right now. Perhaps we can reflect on the wise words of a remarkable young woman who faced more adversity than any person should.
It was Anne Frank who said “how wonderful it is that nobody need wait a single moment before starting to improve the world”. What an amazingly positive and powerful outlook!
Let us all consider what we can begin doing this very moment to start making the world a better place.
Don’t be paralysed trying to come up with some grand endeavour. It is the small steps of progress, the small acts of kindness and love repeated that come together to have big impact on our lives and the lives of those around us.
To be cheeky and slip in a second quote, remember that “from little things big things grow”. Paul Kelly & Kev Carmody.
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
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Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437