Home – New Forums Money matters Government Stimulus Package for Small Business

Viewing 15 posts - 151 through 165 (of 201 total)
  • Author
    Posts
  • #1222764
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    Tradie1, post: 269303, member: 117450 wrote:
    Is the stimulus definatley available to those sole traders without employees???if so, I can use bank statements to prove the zero income for march….. we use a basic spreadsheet for accounting and my accountant does the rest….. i like simple im my life plus it doesn’t need to be complicated for what we do……. its not so much the right here right now im concerned about, its down the track when life returns the ‘new’ normal because lets face it, will never be quite the same. I mentioned in earlier posts that i would be happy with some tax relief going forward…… but if this is the package i will try to access it bcos we are definatley going to continue to suffer a downturn in the months ahead…

    You will be able to self assess the decline in income on the ATO application form that is coming. Your records from excel would be sufficient to draw that conclusion if they are well kept for each month. Yes it’s apparently available for sole traders for both their employees and also the sole trader themselves. Might be monthly eligibility testing for sole trader so will need to see fine print but it’s looking good for you.

    If you are legitimately eligible then go for it.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222765
    Tradie1
    Member
    • Total posts: 21
    Up
    0
    ::

    Thanks james, again…. little bit of reassurance atleast ….. will speak to my accountant cheers

    #1222766
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    #1222767
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::

    Our video commentary on this https://www.360partners.com.au/small-business-stimulus-package-3

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222768
    broker
    Member
    • Total posts: 3
    Up
    0
    ::

    I’m in a tricky situation.

    I have been legitimately running my company for about 3.5 years and registered for GST from day 1.

    As revenue was choppy in the early days, I always just took the minimum via directors fees on an adhoc basis and survived on savings.

    Fast forward to Jan 1 2020, I had decided with my accountant to register for PAYG and begin paying a small salary. As I am in a financial services business, I get paid large sums infrequently, i.e. one quarter could be $0, $10,000, $5,000 = $15,000 total.

    I decided it was best to pay myself quarterly for cash flow purposes from 1 Jan 2020. First pay was due to be paid on 31 March 2020 for the period 1 Jan – 31 Mar 2020.

    The tricky part is, I only registered all this on pay day (31 March) and entered a PAYGW start date of 1 Jan 2020.

    Obviously, my business has gone to $0 revenue and will likely be that way until all this is over, so I need some form of assistance.

    I’ve had a read of the integrity measures and this very act is likely to cause trouble for me even though that is legitimately what the plan was.

    I don’t know what to do as I don’t want to receive the Boost if it’s going to be viewed as a “scheme”, but at the same time, if I earn income from Jan 1, I need to be registered for PAYGW from Jan 1 for my affairs to be in order.

    Can I forego the payment (even though I really need it) or must I accept it and hope nothing comes of it? I really don’t want a massive penalty to sink me after I have come through the other side.

    How do I navigate this one?

    #1222769
    bb1
    Participant
    • Total posts: 4,485
    Up
    0
    ::
    broker, post: 269321, member: 117491 wrote:
    I’m in a tricky situation.

    I have been legitimately running my company for about 3.5 years and registered for GST from day 1.

    As revenue was choppy in the early days, I always just took the minimum via directors fees on an adhoc basis and survived on savings.

    Fast forward to Jan 1 2020, I had decided with my accountant to register for PAYG and begin paying a small salary. As I am in a financial services business, I get paid large sums infrequently, i.e. one quarter could be $0, $10,000, $5,000 = $15,000 total.

    I decided it was best to pay myself quarterly for cash flow purposes from 1 Jan 2020. First pay was due to be paid on 31 March 2020 for the period 1 Jan – 31 Mar 2020.

    The tricky part is, I only registered all this on pay day (31 March) and entered a PAYGW start date of 1 Jan 2020.

    Obviously, my business has gone to $0 revenue and will likely be that way until all this is over, so I need some form of assistance.

    I’ve had a read of the integrity measures and this very act is likely to cause trouble for me even though that is legitimately what the plan was.

    I don’t know what to do as I don’t want to receive the Boost if it’s going to be viewed as a “scheme”, but at the same time, if I earn income from Jan 1, I need to be registered for PAYGW from Jan 1 for my affairs to be in order.

    Can I forego the payment (even though I really need it) or must I accept it and hope nothing comes of it? I really don’t want a massive penalty to sink me after I have come through the other side.

    How do I navigate this one?

    Don’t come to a forum, go back to your accountant who knows the in’s and outs of your affairs, and helped you register, wouldn’t they be in the best position to advise.

    #1222770
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    broker, post: 269321, member: 117491 wrote:
    I’m in a tricky situation.

    I have been legitimately running my company for about 3.5 years and registered for GST from day 1.

    As revenue was choppy in the early days, I always just took the minimum via directors fees on an adhoc basis and survived on savings.

    Fast forward to Jan 1 2020, I had decided with my accountant to register for PAYG and begin paying a small salary. As I am in a financial services business, I get paid large sums infrequently, i.e. one quarter could be $0, $10,000, $5,000 = $15,000 total.

    I decided it was best to pay myself quarterly for cash flow purposes from 1 Jan 2020. First pay was due to be paid on 31 March 2020 for the period 1 Jan – 31 Mar 2020.

    The tricky part is, I only registered all this on pay day (31 March) and entered a PAYGW start date of 1 Jan 2020.

    Obviously, my business has gone to $0 revenue and will likely be that way until all this is over, so I need some form of assistance.

    I’ve had a read of the integrity measures and this very act is likely to cause trouble for me even though that is legitimately what the plan was.

    I don’t know what to do as I don’t want to receive the Boost if it’s going to be viewed as a “scheme”, but at the same time, if I earn income from Jan 1, I need to be registered for PAYGW from Jan 1 for my affairs to be in order.

    Can I forego the payment (even though I really need it) or must I accept it and hope nothing comes of it? I really don’t want a massive penalty to sink me after I have come through the other side.

    How do I navigate this one?

    Questions

    1. Who added the PAYG withholding role to the ABN (you or agent) and exactly what date did they / you contact the ATO to do it (I don’t mean the specified start date of 1 January 2020 because the ATO call centre would have been closed on that day and the ATO portal is shut during that time as well). I am guessing you added the role sometime after 1 January and backdated. By any chance was this all done after 12 March 2020?

    2. Did the company lodge a 2019 income tax return showing any amount of business income and when was that return lodged?

    3. Did the company lodge a sept 19 or dec 19 bas showing any income? When lodged?

    4. If you do take this proposed wage will it put the company into loss for 2020FY? How much of a wage are we talking about between 1 January 2020 and 30 June 2020?

    The answers shape where you sit on the risk curve. Interestingly the cash flow boost measure does not contain an opt out clause and there is no application process. The jobkeeper program does have an application process.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222771
    broker
    Member
    • Total posts: 3
    Up
    0
    ::
    JamesMillar, post: 269330, member: 5318 wrote:
    Questions

    1. Who added the PAYG withholding role to the ABN (you or agent) and exactly what date did they / you contact the ATO to do it (I don’t mean the specified start date of 1 January 2020 because the ATO call centre would have been closed on that day and the ATO portal is shut during that time as well). I am guessing you added the role sometime after 1 January and backdated. By any chance was this all done after 12 March 2020?

    Interestingly, none of us added the role. It was automatically added once either the payroll (through STP) was done on 31 March (pay day) or the employee (me) went onto mygov to register employment details. I can’t work out which action resulted in the role being added.

    2. Did the company lodge a 2019 income tax return showing any amount of business income and when was that return lodged?

    We haven’t lodged the 2018/19 return just yet – it’s due to be done shortly. This is a legitimate (and my only) business with business income reported each year since 2016.

    3. Did the company lodge a sept 19 or dec 19 bas showing any income? When lodged?

    Yes we did and it showed income of $30,000 (expenses $24,000) and directors fees of $3,400 were paid if that’s relevant – the directors fees were not paid via payroll.

    4. If you do take this proposed wage will it put the company into loss for 2020FY? How much of a wage are we talking about between 1 January 2020 and 30 June 2020?

    The wage is nominal – $22,000/yr paid QRTLY. It won’t put the company into loss – prior to making the payment, there was $10,000+ in the bank account and profit YTD was $7,000.

    The answers shape where you sit on the risk curve. Interestingly the cash flow boost measure does not contain an opt out clause and there is no application process. The jobkeeper program does have an application process.

    The fact you have no choice in the matter, yet by correctly reporting the start date you open yourself up to scrutiny scares me somewhat. My accountant has been no help for the other poster above you.

    I hope I’ve answered your questions with sufficient detail in bold above.

    I very much appreciate you taking the time to help James.

    #1222772
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::

    It all comes down to your statement and when that decision was made.(and when you can prove it was made)….

    “I decided it was best to pay myself quarterly for cash flow purposes from 1 Jan 2020. First pay was due to be paid on 31 March 2020 for the period 1 Jan – 31 Mar 2020.”

    It seems that your first actions to support this were on or around end of March 2020 (if you have evidence the decision was made earlier than March 2020 then you should be fine). Being that 31 March was after the announcements for some of these stimulus measures, a cynic (or ATO) could argue that your decision was motivated in part to get access to stimulus concessions. The test is whether you took a wage with the sole or dominant purpose of getting access to the stimulus measures. If you have a valid commercial reason that could be put forward for first taking a wage at this time then you could prevail in a dispute.

    If the ATO decide in a few years to audit taxpayers that took wages for first time in this last half of year they are going to be very busy. There will be tens of thousands taking wages for first time in last six months of this financial year.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222773
    cloud777
    Member
    • Total posts: 2
    Up
    0
    ::

    I am a company director who generally takes ‘drawings’, as many do. The company is registered for PAYG and we have employees, but it’s still unclear to me whether I’m personally eligible for the $1,500 payment.

    My impression from this thread is that the answer is probably no, but the links below seem to suggest yes:

    “Yes you can apply for JobKeeper … you can convert drawings to wages.”
    (https://www.dailytelegraph.com.au/coronavirus/hibernation/david-gandolfo-answers-your-small-business-questions/news-story/d0ccff9f85118b4d962aaa2cccae8fda)

    “The subsidy is available to their employees and the principal has the option of converting their drawings to a fortnightly wage to receive the subsidy also”
    (https://acapmag.com.au/2020/03/wage-subsidy-what-you-need-to-know/)

    Would really love to know the answer because my accountant isn’t sure either…

    Thanks,

    Jason

    #1222774
    broker
    Member
    • Total posts: 3
    Up
    0
    ::
    JamesMillar, post: 269332, member: 5318 wrote:
    It all comes down to your statement and when that decision was made.(and when you can prove it was made)….

    “I decided it was best to pay myself quarterly for cash flow purposes from 1 Jan 2020. First pay was due to be paid on 31 March 2020 for the period 1 Jan – 31 Mar 2020.”

    It seems that your first actions to support this were on or around end of March 2020 (if you have evidence the decision was made earlier than March 2020 then you should be fine). Being that 31 March was after the announcements for some of these stimulus measures, a cynic (or ATO) could argue that your decision was motivated in part to get access to stimulus concessions. The test is whether you took a wage with the sole or dominant purpose of getting access to the stimulus measures. If you have a valid commercial reason that could be put forward for first taking a wage at this time then you could prevail in a dispute.

    If the ATO decide in a few years to audit taxpayers that took wages for first time in this last half of year they are going to be very busy. There will be tens of thousands taking wages for first time in last six months of this financial year.

    Thanks so much James. I think it will come down to proof of when the decision was made – luckily, I had discussed this with my accountant and he recommended I register for PAYG within the last financial year.

    I will ask him to provide correspondence to cover myself because as you mentioned, I’ll get the payment whether I like it or not!

    #1222775
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    broker, post: 269335, member: 117491 wrote:
    Thanks so much James. I think it will come down to proof of when the decision was made – luckily, I had discussed this with my accountant and he recommended I register for PAYG within the last financial year.

    I will ask him to provide correspondence to cover myself because as you mentioned, I’ll get the payment whether I like it or not!

    Yep If you have any evidence then you will be fine. We have lots of clients in same boat and we are trying to figure out what justification and evidence they can produce if asked

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222776
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    cloud777, post: 269334, member: 117496 wrote:
    I am a company director who generally takes ‘drawings’, as many do. The company is registered for PAYG and we have employees, but it’s still unclear to me whether I’m personally eligible for the $1,500 payment.

    My impression from this thread is that the answer is probably no, but the links below seem to suggest yes:

    “Yes you can apply for JobKeeper … you can convert drawings to wages.”
    (https://www.dailytelegraph.com.au/coronavirus/hibernation/david-gandolfo-answers-your-small-business-questions/news-story/d0ccff9f85118b4d962aaa2cccae8fda)

    “The subsidy is available to their employees and the principal has the option of converting their drawings to a fortnightly wage to receive the subsidy also”
    (https://acapmag.com.au/2020/03/wage-subsidy-what-you-need-to-know/)

    Would really love to know the answer because my accountant isn’t sure either…

    Thanks,

    Jason

    All rubbish. There is nothing in any measure that states that a drawings to wages switch is outright acceptable and certainly, when it comes to the cash flow boost payment the ATO has specifically warned against this (they have an integrity measure to guard against abuse). Jobkeeper legislation will likely have the same provision.

    It is possible that if you can show evidence of intent to record as a wage before March 2020 and administratively had not done it yet then that may be safe. Also perhaps for new entities and those first turning a profit. Point is you need a case to show that claiming these entitlements was not your sole or dominant purpose. For everyone that is now making that decision you run the risk of the integrity measures being applied and repayment. Remember the Commissioner is right until you prove him wrong (reversal of the onus of proof – normally you are innocent until proven guilty but tax law does not work that way)

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222777
    Tradie1
    Member
    • Total posts: 21
    Up
    0
    ::

    So many grey areas will ALL the stimulus to date….. hard to fathom that ‘some’ businesses will get the 20k with minimal turnover and also the job keeper when employees earn no where near the $750 a week…. they technically not even required to have paid or withheld tax… yet some business with larger turnover that contribute a lot more thru personal tax and buying good and services through other business stand to be left out to dry potentially….. for me this whole thing should be a safety net NOT something that some can actually profit from…

    #1222778
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::
    Tradie1, post: 269338, member: 117450 wrote:
    So many grey areas will ALL the stimulus to date….. hard to fathom that ‘some’ businesses will get the 20k with minimal turnover and also the job keeper when employees earn no where near the $750 a week…. they technically not even required to have paid or withheld tax… yet some business with larger turnover that contribute a lot more thru personal tax and buying good and services through other business stand to be left out to dry potentially….. for me this whole thing should be a safety net NOT something that some can actually profit from…

    Well the problem is you don’t even get a choice to opt out of the cash flow boost even if you want to. There is no application process. If you meet the requirements you effectively must take it (so it’s hard to accuse people of abusing the system).

    But agreed its got some faults. They just want a simple system that pumps money into economy. If it gets to 80% of the intended people quickly that sound’s like they would be happy. Probably better than being more targeted with stricter conditions but taking months to implement.

    A good plan today is better than a perfect plan tomorrow.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
Viewing 15 posts - 151 through 165 (of 201 total)
  • You must be logged in to reply to this topic.