Government Stimulus Package for Small Business

[Paul – FS Concierge]

[USER=117450]@Tradie1[/USER] . I can understand your frustration. You have already stated many times in this thread that you don’t agree with aspects of the Stimulus…. Best to leave the comments there as they may be seen as becoming political comments that break our rules and will be removed.

Cheers

[flinchy]

JamesMillar, post: 269297, member: 5318 wrote:

the comparison period is the same month last year so you would need to compare March 2020 with March 2019 or April 2020 with April 2019. Sounds like you are good to go
My current struggle with this

Is my jan-mar quarter in general 2019, was quite slow, where it then picked up until being very healthy and consistent from jun-now (pre-covid-19-panic)

So I’ve seen a sharp drop in cashflow from jun19-feb20 vs today, but compared to exactly 12 months ago it’s probably only dropped (and still dropping to be fair) to a comparable level.

So while I’ve seen a very immediate >>>30% drop vs jan20 and feb20… March20 vs march19 is probably comparable in mediocrity as a result of the slowdown

I know the exact guidance is still evolving, but this does make me worry a little that id have to drop even further to be eligible?.. or if it’s not compared to exactly the same month, and is compared to a general “typical month of operation” in the past 12 months, then I’m fine.

[James Millar]

flinchy, post: 269348, member: 78334 wrote:

My current struggle with this

Is my jan-mar quarter in general 2019, was quite slow, where it then picked up until being very healthy and consistent from jun-now (pre-covid-19-panic)

So I’ve seen a sharp drop in cashflow from jun19-feb20 vs today, but compared to exactly 12 months ago it’s probably only dropped (and still dropping to be fair) to a comparable level.

So while I’ve seen a very immediate >>>30% drop vs jan20 and feb20… March20 vs march19 is probably comparable in mediocrity as a result of the slowdown

I know the exact guidance is still evolving, but this does make me worry a little that id have to drop even further to be eligible?.. or if it’s not compared to exactly the same month, and is compared to a general “typical month of operation” in the past 12 months, then I’m fine.

Treasury have indicated their will be a method for testing entities less than twelve months old and have other evidence of decline. It seems there will be a prospective forecast type test which means there is risk of overpayment – not sure what will happen if a business is overpaid. There will be an overpayment clawback provision but enforcement and recovery will be tough.

Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900

[flinchy]

JamesMillar, post: 269349, member: 5318 wrote:

Treasury have indicated their will be a method for testing entities less than twelve months old and have other evidence of decline. It seems there will be a prospective forecast type test which means there is risk of overpayment – not sure what will happen if a business is overpaid. There will be an overpayment clawback provision but enforcement and recovery will be tough.
Yeah I just hope there’s a similar test for businesses that have seen growth year on year and haven’t fallen below 12 months ago but are still down >30% otherwise. Would be thousands of us in that position surely

[johnnycashflow]

hey folks a bit late to the party, but posting for a elderly relative who has their own tiny part time business,

how does this instant write off help in terms of cashflow? its just a tax deduction right?
my aunt was looking to buy a shared private /business car $30-50k, and new laptop through the business back in Jan, but obviously hasnt due to the virus

appreciate it

[Paul – FS Concierge]

johnnycashflow, post: 269363, member: 79207 wrote:

hey folks a bit late to the party, but posting for a elderly relative who has their own tiny part time business,

how does this instant write off help in terms of cashflow? its just a tax deduction right?
my aunt was looking to buy a shared private /business car $30-50k, and new laptop through the business back in Jan, but obviously hasnt due to the virus

appreciate it
Yes, same year deduction instead of 3 or 4 years.

The interesting thing is if her income drops significantly in this FY, it effectively becomes less of a benefit but is very good for cash flow.

[bb1]

Paul – FS Concierge, post: 269366, member: 78928 wrote:

Yes, same year deduction instead of 3 or 4 years.

The interesting thing is if her income drops significantly in this FY, it effectively becomes less of a benefit but is very good for cash flow.

I’m confused by you answer, if her income drops, and as such the benefit of the deduction drops. How is that good for the cash flow?

[johnnycashflow]

Paul – FS Concierge, post: 269366, member: 78928 wrote:

Yes, same year deduction instead of 3 or 4 years.

The interesting thing is if her income drops significantly in this FY, it effectively becomes less of a benefit but is very good for cash flow.
she doesnt do bas or gst, just annual tax return,

so that means that if she buys a $3k computer for example, at the end of the year her taxable income goes down by 3k?

as “I did read somewhere about getting the tax deduction back as cash to improve cashflow” is what she has told me

or did she misunderstand,? i ve had a look roo and am a bit confused

[Paul – FS Concierge]

bb1, post: 269367, member: 53375 wrote:

I’m confused by you answer, if her income drops, and as such the benefit of the deduction drops. How is that good for the cash flow?
To clarify, if she drops down the Tax Scales, then the dollar benefit will be less than it would have been in a year when her income did not drop.

Spending money should be assessed against cash flow needs in all circumstances. It has never been more important than now.

[johnnycashflow]

Paul – FS Concierge, post: 269369, member: 78928 wrote:

To clarify, if she drops down the Tax Scales, then the dollar benefit will be less than it would have been in a year when her income did not drop.

Spending money should be assessed against cash flow needs in all circumstances. It has never been more important than now.
yes my aunt ‘s income if I recall is around $20-$30k
so im a bit confused, in her case, a tax deduction will still have a financial benefit, but how does it improve cashflow when she does her tax return the following year?

[one1]

Hi, I have a question about the Jobseeker $1500 payment.

A new entity was created on the 1/7/19 and it employed a staff member on a casual basis for a 6-month probationary period. Shortly after the 1/1/20, the staff member had their employment confirmed and they became part time.

How is this proved? The staff member got a letter at the time, but the government is not notified of someone changing from casual to part time?

[johnnycashflow]

johnnycashflow, post: 269371, member: 79207 wrote:

yes my aunt ‘s income if I recall is around $20-$30k
so im a bit confused, in her case, a tax deduction will still have a financial benefit, but how does it improve cashflow when she does her tax return the following year?
I’ve just spoken to two ato reps for an hour.

They are hopeless.

They couldn’t understand that tax deduction doesnt increase immediate cashflow

Even the example of a company that could cashflow increase was “maybe the company decides to spend more money because they get a bigger deduction at the end of the year”

[one1]

If a staff member was changed from casual to part time on the 1st of January, is it likely I will have to prove this?

[cloud777]

JamesMillar, post: 269337, member: 5318 wrote:

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.

Thanks for your reply, James. I guess there was a lot of speculation (read: rubbish)…

Is it true that the final legislation contains a provision allowing one company director to claim the JobKeeper payment? (Even if not receiving a PAYG wage).

[James Millar]

cloud777, post: 269428, member: 117496 wrote:

Thanks for your reply, James. I guess there was a lot of speculation (read: rubbish)…

Is it true that the final legislation contains a provision allowing one company director to claim the JobKeeper payment? (Even if not receiving a PAYG wage).

Yes one active business participant stakeholder is allowed to claim.

Helping build better businesses and better lives with expert financial and taxation advice. info@360partners.com.au www.360partners.com.au 03 9005 4900

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