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  • #1000071
    JamesMillar
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    • Total posts: 1,676

    UPDATED with more detail 12.45pm 12/3

    Most relevant for many small business are

    1. Temporary uplift to the instant asset write off threshold from $30k up to $150k. This is for acquisitions prior to 30 June 2020. Big winner will be car dealers.

    Note that to access instant asset write off you must be using the simplified depreciation provisions within the Act (which is pooling for other assets). If you use traditional depreciation per Div 40 with useful lives for each asset then YOU CANNOT claim this concession (and you should not have claimed previously). Be careful.

    2. Temporary accelerated depreciation to deduct first 50% of asset immediately and rest of normal useful life method (presume for those not using SBE simplified depreciation).This runs until 30 June 2021

    2. Up to $25,000 cash payment from ATO / Gov for employers with $50,000 or more in annual PAYG withholding. Update – test period is 1 January 2020 to 30 June 2020. The payment reduces by 50 cents for every dollar less than $50k in PAYG withholding. Example if you have staff and total PAYG withholding is $25,000 for the 6 months test period then your business payment would be $12,500. Timing of credit from ATO depends on your BAS IAS cycle but is instant.

    Employers that pay wages but are under PAYG withholding thresholds will get $2000.

    3. Apprentice wage subsidies – less relevant but good assistance with Govt paying some of those wages this year.

    FYI our facebook and linked in pages might have more current info and broader strategies

    #1222615
    JamesMillar
    Participant
    • Total posts: 1,676

    If you have an old PAYG withholding registration and old ABN then sit tight might be legitimate way of accessing the $2000.

    #1222616
    JamesMillar
    Participant
    • Total posts: 1,676

    Ok we’ve been through the treasury documents regarding the $25k payment and our conclusion is that many are going to need help to fully access and optimise the small business payment. With up to $25k on the line for activity statements between 1 January and 30 June 2020 this should be optimised to maximise your entitlement.

    We expect to release a facebook video in next 48 hours on 360 Partners page to outline elements and offer solutions. Don’t wait until June to address this because the activity statements and payment cycle begin in the March 2020 lodgement through to the June 2020 lodgement. Payments are based on that content.

    There are a lot of small businesses currently disbursing profits on a dividends (company) or distribution (trusts) basis – which we normally endorse as a good strategy. EXCEPT YOU WILL MISS OUT ON THIS PAYMENT if you persist with this approach in the next 4 months.

    Call your accountant today and schedule a planning meeting to maximise your payment. If they don’t have a solution feel free to call us 03 9005 4900.

    #1222617
    bb1
    Participant
    • Total posts: 4,472

    [USER=5318]@JamesMillar[/USER] great summary, but just to help a real FSér, who is self employed, doesnt need to buy a new vehicle, doesnt have staff (yes FS), doesnt run out each year and buy enough to even reach the current instant write off, you get the drift.

    Whats for a typical FSér, or is it all really geared to the top end of small business, bordering on bigger business’s.

    #1222618
    JamesMillar
    Participant
    • Total posts: 1,676
    bb1, post: 268971, member: 53375 wrote:
    [USER=5318]@JamesMillar[/USER] great summary, but just to help a real FSér, who is self employed, doesnt need to buy a new vehicle, doesnt have staff (yes FS), doesnt run out each year and buy enough to even reach the current instant write off, you get the drift.

    Whats for a typical FSér, or is it all really geared to the top end of small business, bordering on bigger business’s.

    I am not necessarily advocating this strategy but so far the example below seems within bounds of law.

    If someone in business were to employ family member (sole trader can’t employ yourself) for a legitimate small amount of work – theoretically $1 of wages in next four months may entitle the business to the minimum $2000 payment.

    The fine print of any integrity measures is not yet available (if they exist) but this MAY work speak with your accountant and ask them what your options are.

    #1222619
    JamesMillar
    Participant
    • Total posts: 1,676

    This might help explain how to maximise

    https://www.360partners.com.au/small-business-stimulus-package

    #1222620
    ryza82
    Member
    • Total posts: 2

    This package is better than nothing i guess but i cant see it having much impact on short term cashflows for small businesses. I think for many businesses that dont meet the threshold, $2k is immaterial. Businesses facing a downturn in sales will have no choice but to lay off staff if it persists, the 2K will have no impact on their decision.

    #1222621
    JamesMillar
    Participant
    • Total posts: 1,676
    ryza82, post: 269008, member: 117098 wrote:
    This package is better than nothing i guess but i cant see it having much impact on short term cashflows for small businesses. I think for many businesses that dont meet the threshold, $2k is immaterial. Businesses facing a downturn in sales will have no choice but to lay off staff if it persists, the 2K will have no impact on their decision.

    Agree with that. Morrison government are about to announce a second range of stimulus package measures which will likely extend to small micros and individuals. With this space.

    I’ve spoken with a lot of small business owners in last two business days and many are in real trouble. I think people are underestimating the long term effect of these extreme measures to restrict movement and business.

    hold on tight.

    #1222622
    Paul – FS Concierge
    Moderator
    • Total posts: 3,127
    ryza82, post: 269008, member: 117098 wrote:
    This package is better than nothing i guess but i cant see it having much impact on short term cashflows for small businesses.

    I respectfully disagree. It is a broad-based strategy that will provide some stimulus to the economy at a time when stimulus is called for.

    Any broad based strategy will not help everyone, but it is the macro of the effect that is important.

    #1222623
    Paul – FS Concierge
    Moderator
    • Total posts: 3,127

    Just wondering [USER=5318]@JamesMillar[/USER] , if switching Contractors to employees for a period is a worthwhile, legal and ethical consideration?

    #1222624
    JamesMillar
    Participant
    • Total posts: 1,676
    Paul – FS Concierge, post: 269014, member: 78928 wrote:
    I respectfully disagree. It is a broad-based strategy that will provide some stimulus to the economy at a time when stimulus is called for.

    Any broad based strategy will not help everyone, but it is the macro of the effect that is important.

    Interesting Paul. If the $2000 is not enough to keep a business afloat does that really achieve the objective? Its certainly $2000 more into the economy in some way shape or form but are there better options?

    I was thinking last night that $17b blank cheque to medical R&D would certainly expedite a medical solution and more rapid resolution. Yes testing takes time but generally more resources solves more problems (and faster if need be). We could roll out rapid labs, hire the best medical science talent to test, make more test facilities, process more data. Sheer greater effort faster.

    The longer this drags on the greater chance of long term economic damage which everyone seems to be forgetting about. I can see people never working again after this as entire businesses and industries are wiped out. As in business extinction event. Dinosaurs dead.

    #1222625
    JamesMillar
    Participant
    • Total posts: 1,676
    Paul – FS Concierge, post: 269015, member: 78928 wrote:
    Just wondering [USER=5318]@JamesMillar[/USER] , if switching Contractors to employees for a period is a worthwhile, legal and ethical consideration?

    Yes and this is part of our recommend strategy WHERE suitable. There are potentially many things that can be done to maximise claims

    #1222626
    one1
    Member
    • Total posts: 17

    Is there a maximum PAYG tax percentage that can be taken out of employee payments? ie. Can an employee agree to have 80% of their salary taken out as PAYG tax?

    #1222627
    JamesMillar
    Participant
    • Total posts: 1,676
    one1, post: 269018, member: 4789 wrote:
    Is there a maximum PAYG tax percentage that can be taken out of employee payments? ie. Can an employee agree to have 80% of their salary taken out as PAYG tax?

    Haha one of the many discussions we have had in office. There are options for upwards voluntary PAYG variations, HELP debts, no threshold (second job) etc etc. However at this point we haven’t seen fine print on legislation (hasn’t even been drafted) so we don’t know what the integrity measures are – there will be some SO DO NOT do this just yet.

    #1222628
    Paul – FS Concierge
    Moderator
    • Total posts: 3,127
    JamesMillar, post: 269016, member: 5318 wrote:
    Interesting Paul. If the $2000 is not enough to keep a business afloat does that really achieve the objective? Its certainly $2000 more into the economy in some way shape or form but are there better options.

    In times of sharp contraction, you want the stimulus money spent. Sending out money that goes unspent would be my major concern.

    This package looks a bit complicated and convoluted to me.

    I would have preferred something along the lines of instantly shipping dollars to businesses whose tax is up to date with a cap on turnover and using a sliding scale.

    This might be heresy here, but the stage 1 package to welfare recipients will probably produce the largest and most positive effect on the economy IMO.

    On the other hand, already profitable businesses with sufficient capital will potentially just save the cash.

    Of course any extra money going to medical research is always welcome as they have been starved of funds for so long now.

    Moving to a personal agenda of mine, I would love to see the formation of a worldwide organistion to umbrella medical and pharmaceutical research, moving research away more and more from private firms that are profit motivated.

    Theranos is a good example of capitalism gone wrong in this sector. And many life saving and pain and suffering easing drugs are not created because the “market” for them is “too small” within a free market environment.

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