COVID-19 Business Update – 16 September 2020
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.
Business Resilience Package for SOME Victorian Businesses
The Victorian government is investing $3 billion in cash grants, tax relief, and cashflow support to aid businesses hit by the tight restrictions and help them prepare for COVID Normal. The types of support included in this package are divided into three categories: Business Support, Business Adaptation, and Waivers and Deferrals. However, only businesses in “Eligible ANZSIC Classes” can apply. Many businesses in the building industry have been excluded! See full list of eligible businesses here. https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-resilience-package/business-support-fund-3
Included in Business Support is the third round of the Business Support Fund for small- and medium-sized business ($822 million), with applications now open for grants of $10,000. There is also a grant for Sole Traders of $3,000 for sole traders who operate from commercial premises.
Meanwhile, Business Adaptation involves funding, tools, and resources to help businesses adapt to COVID Normal.
Tax and cashflow support amounting to $1.8 billion will be provided by the government under the Waivers and Deferrals scheme. Checkout the link below for details.
For a detailed rundown of the inclusions of the Business Resilience Package, click here. Let us help you assess your eligibility and gain access to government support! Get in touch with us so we can schedule a consultation.
Melbourne’s Roadmap to ‘COVID Normal’
A staged plan to ease Melbourne out of tight COVID-19 restrictions has been released. Stage 4 restrictions will remain in place, and will start to ease further from 28 September if the average case numbers remain in the 30-50 range. We are comfortably within that range at present, and provided the Casey cluster is managed properly we should get there!
The final step will be reached by late November if the city has no new cases of COVID-19 for two weeks. Details about this roadmap to COVID Normal can be found here.
Regional Victoria Moves to Step Three of Reopening Plan
Regional Victoria moved to step three of the reopening plan on Wednesday night, which means that sitting in a restaurant, meeting up to 10 people outdoors, kids’ sport and travelling for a holiday will all be allowed.
However, masks will still be mandatory and strict restrictions on the number of people who can visit your home remain in place. You can find a detailed guide on the changes that are coming here.
Missed the Superannuation Guarantee Amnesty Deadline?
The Superannuation Guarantee Amnesty ended last week on 7 September. Businesses that failed to apply for the SG amnesty but still have unpaid or late paid super to disclose will need to lodge a Superannuation guarantee charge statement and pay the super guarantee charge (SGC).
The ATO will notify you of the quarters that are not eligible for the amnesty and charge you with an administration component of $20 per employee per quarter. They will factor in the circumstances of your business in their decision of whether the Part 7 penalty should be remitted and will also work with you through the debt processes to collect the outstanding amount.
If you have any superannuation concerns, feel free to contact us and let us sort it out for you.
Xero Starter Plans have changed
COVID-19 has seen a spike in new businesses started in Australia, with the vast majority being micro/small business. To help, the Xero Starter Plan has been upgraded to help micro and small businesses digitise their accounts.
It’s still $25 per month, however the plan now includes:
- The bank statement limit has been removed
- 20 invoices p/m (approx. 1 per business day)
- 5 Bills per month
- Hubdoc included
- 1 employee through payroll
To celebrate, Xero’s offering all new Starter plans are $12.50 for the first 4 months. This applies to new subscriptions only and for a limited time. See xero.com/pricing or get in touch with us for more information.
Second Round of Cash Flow Boost
If you’ve received initial cash flow boosts, you should get a second round of cash flow boost when we lodge your activity statements for each monthly or quarterly period from June to September 2020.
If you lodge:
- quarterly, you’ll receive 50% of your total initial cash flow boost for each activity statement.
- monthly, you’ll receive 25% of your total initial cash flow boost for each activity statement.
If you receive some funds into your account from the ATO and aren’t sure what it relates to, feel free to get in touch with us and we can investigate.
More details can be found in the ATO website.
Bankruptcy Protection Rules Until End of 2020
Australia will extend its temporary insolvency and bankruptcy protection rules until the end of this year, providing businesses a lifeline to recover from the impacts of COVID-19.
The rules, which were first introduced in March and originally due to expire on 30 September 2020, indicate that creditors cannot issue bankruptcy notices to businesses for debts below A$20,000.
The creditors’ notice period to act on debts could also be extended, allowing businesses to keep trading without paying rent, tax, and loans.
Contact us if you have any questions and we’ll help create a plan for your business.
JobKeeper 2.0 Bill Passed By Federal Parliament
The JobKeeper Amendment Bill 2020 was passed by Federal Parliament this week. Below are the key changes to the scheme:
Extending the period of operation– The JobKeeper scheme and the provisions that allow employers to temporarily vary the working arrangements (by way of JobKeeper enabling directions or agreements under Part 6-4C of the Fair Work Act 2009) will now end on 28 March 2021 instead of 28 September 2020.
New payment rates– The current JobKeeper subsidy rate for full-time workers of $1,500 a fortnight will drop to $1,200 from 28 September 2020, and then to $1,000 a fortnight from January 2021. Meanwhile, those who worked less than 20 hours per week in the relevant reference period (being the four-week pay period before either 1 March 2020 or 1 July 2020) will receive $750 from 28 September 2020, and then to $650 a fortnight from January 2021.
Legacy Employers– Employers who no longer qualify for JobKeeper after 28 September will be classified as legacy employers, and will have to satisfy a 10% decline in turnover to have access to modified JobKeeper enabling directions.
Decline in Turnover Test Certificate– Employers will need to obtain a 10% decline in turnover test certificate from an eligible financial service provider, including a BAS or Tax agent.
These modified directions include reducing an employee’s ordinary hours to a minimum of 60% of the employee’s ordinary hours as they were at 1 March 2020, but cannot result in the employee working less than two consecutive hours in a day.
A dispute can be brought before the Fair Work Commission about whether an employer holds a 10% decline in turnover certificate for the relevant period, including a dispute about whether a certificate is valid.
Penalty– A penalty of up to $13,320 for individuals and $66,600 for body corporates or employers will be imposed if an employer doesn’t meet the 10% decline in turnover test and knowingly or recklessly tries to use the provisions or fails to notify employees that a JobKeeper enabling direction or agreement is not continuing due to not having met the requirements.
JobKeeper Turnover Test Requirements
From the 28th of September 2020:
- businesses looking to claim the JobKeeper payment will be required to demonstrate that they experienced a decline in turnover using actual GST turnover, rather than projected GST turnover. So please ensure your invoicing is up to date, don’t let a backlog build up so you don’t know where you stand.
- businesses will be required to reassess their eligibility with reference to their actual GST turnover in the September 2020 quarter to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021 (the first extension period).
From 4th January 2021:
- businesses will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they suffered a decline with reference to their actual GST turnover in the December 2020 quarter to be eligible for the JobKeeper payment from 4 January 2021 to 28 March 2021 (the second extension period).
The required decline in GST turnover percentages will remain the same:
- 30% for an aggregated turnover of $1 billion or less
- 50% for an aggregated turnover of more than $1 billion
- 15% for ACNC-registered charities other than universities and schools.
Government-backed COVID-19 Loans Extended
The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
Keeping Your Mental Health in Check and Supporting Others
With the prolonged lockdowns and tight social restrictions, combined with the financial uncertainty that everyone is facing, it is important to keep our own mental health in check and look out for others. In this Forbes article, Psychiatrist Dr. Dawn Brown discussed some tips on how you can support those struggling with their mental health:
- Allow for a conversation. As mental health can be a very sensitive matter, start slow and let them lead.
- Treat them with respect and understanding. Watch your language, don’t judge, and be careful not to make assumptions.
- Encourage seeking the support they need. Your support alone may not be enough, so encourage them to talk to a professional who is equipped with more resources to help them.
- Be supportive of positive mental health and do your part to make your workplace better.
Meanwhile, this article focuses on some weekend habits that can help you boost your happiness and productivity. Some ideas include:
- Going for solo dates to renew your mind and experience something new. This exploration will give you fresh sources of creativity.
- Do a weekly personal check-in. This will reorient your life if certain aspects are off track and help you assess your emotional well-being.
- Connect with close friends and family. Stay in touch by scheduling video calls and starting meaningful conversations. Doing this will improve your connection and make you feel better.
Government Launches Business Continuity Website to Support Businesses Amid COVID-19
The Australian Government has launched the Australian Business Continuity website to support businesses with staff working remotely amid the pandemic.
The site provides free practical tools for remote communications, collaboration, workforce management, and video conferencing, as well as advice on how to best use teleworking services.
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