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

Viewing 15 posts - 106 through 120 (of 201 total)
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  • #1222719
    Henri K
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    JamesMillar, post: 269187, member: 5318 wrote:
    A is definitely a scheme
    .. B is definitely not a scheme

    James, thank you once again for your advice. If you provide any further advice you should probably start billing us.

    My evaluation was the exact opposite, and I was considering to start progressing Scenario A today — only to land in a hot spot with ATO later.

    #1222720
    Paul – FS Concierge
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    Henri K, post: 269216, member: 115510 wrote:
    James, thank you once again for your advice. If you provide any further advice you should probably start billing us.

    My evaluation was the exact opposite, and I was considering to start progressing Scenario A today — only to land in hot stop with ATO later.
    If you are ever looking for an Accountant [USER=115510]@Henri K[/USER] , [USER=5318]@JamesMillar[/USER] ‘s business is in his signature :-)

    #1222721
    Tradie1
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    Hypothetical question here…. could a business/sole trader that was or still is registered for payg withholding along with a current workcover registration as at 12th march technically employ someone for monday and Tues (30 31 march) and keep said employee ’employed’ thru until the Sept quarter on minimal hours (ie 4hrs a week or 1 casual shift) be eligible??
    If so it shows how flawed the stimulus package is…….. and opens the whole thing up to be abused….

    #1222722
    Henri K
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    Tradie1, post: 269220, member: 117450 wrote:
    could a business/sole trader that was or still is registered for payg withholding along with a current workcover registration as at 12th march technically employ someone for monday and Tues (30 31 march) and keep said employee ’employed’ thru until the Sept quarter on minimal hours (ie 4hrs a week or 1 casual shift) be eligible??

    it seems that you could, and you would receive $20k.

    However, hiring a minimally paid employee 2 days before the deadline and letting her go the next day after stimulus ends seems to be pretty much the definition of scheming, and the law has very strong and very unclear provisions against scheming.

    It seems that you would face a very high risk of being flagged/audited/executed by ATO and need to pay the $20k back.

    I’m not sure about Australia ([USER=5318]@JamesMillar[/USER] ? once again), but in my previous home-country getting busted of scheming ends up in a database and causes increased risk of audits, and tighter scrutiny of everything you do, and reduces the flexibility of negotiating anything discretionary like tax extensions and payment plans, for years to come.

    #1222723
    Paul – FS Concierge
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    Tradie1, post: 269220, member: 117450 wrote:
    Hypothetical question here…. could a business/sole trader that was or still is registered for payg withholding along with a current workcover registration as at 12th march technically employ someone for monday and Tues (30 31 march) and keep said employee ’employed’ thru until the Sept quarter on minimal hours (ie 4hrs a week or 1 casual shift) be eligible??
    If so it shows how flawed the stimulus package is…….. and opens the whole thing up to be abused….
    Regardless of the answer, think of these packages as a “system” that will cover a broad range of scenarios.

    Now try to build a “perfect system” yourself and put that system in words in the form of Legislation.

    In my experience, it is just about impossible to build a perfect system that covers every single scenario in the form of Legislation.

    The system is good if it meets it’s intended purpose (in this case to deliver money to businesses to be spent in the economy eg, to buy supplies, pay rent, pay wages etc).

    Risk management principles normally apply that limit the government’s exposure. If you think that 3% or less of the funds go to businesses for which the funds shouldn’t be given from the intent of the package point of view, the system is probably good.

    Your example may or may not be part of the 3% or less.

    It just goes back to the principle that there is no broad based system that is perfect.

    Cheers

    #1222724
    Henri K
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    Paul – FS Concierge, post: 269222, member: 78928 wrote:
    it is just about impossible to build a perfect system that covers every single scenario in the form of Legislation.

    I agree that it is impossible to build a perfect system, but I also think it is just about impossible to build any WORSE system than what the government has done here.

    #1222725
    Tradie1
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    Fair points and duly noted…. but still leaves a whole category or workers ie sole traders that will have their own payg tax commitments going forward that may well break them with no cash coming in especially more so with those with accounts to settle etc etc….
    Its my opinion that the tax relief (seeings as the stimulus package is linked to employees tax not being paid by the employer to the ATO) needs to be extended to include sole traders…. still happy to pay the gst component just wanting some tax relief myself to help keep the doors open…. there is a lot of sole traders that may cease without help…. thanks

    #1222726
    James Millar
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    Tradie1, post: 269225, member: 117450 wrote:
    Fair points and duly noted…. but still leaves a whole category or workers ie sole traders that will have their own payg tax commitments going forward that may well break them with no cash coming in especially more so with those with accounts to settle etc etc….
    Its my opinion that the tax relief (seeings as the stimulus package is linked to employees tax not being paid by the employer to the ATO) needs to be extended to include sole traders…. still happy to pay the gst component just wanting some tax relief myself to help keep the doors open…. there is a lot of sole traders that may cease without help…. thanks

    I think round 3 will probably include something for sole traders because they have been largely ignored in rounds 1 and 2.

    I think the stimulus payments were just a little rushed but realistically they need to help employers first and quickly and any other approach would have take longer to role out.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222727
    Tradie1
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    Further to my above points…. completely agree no system will ever be perfect. However this one has a LOT of anomalies for me….. should at least be a minimum amount of turnover as a requirement (say the GST threshold) and also said business must have atleast had to collect PAYG withholding…. believe the government will need some of what their about to give down the track….this scheme opens up side businesses as being able to claim not the point i would have thought……

    #1222728
    Tradie1
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    Thanks james

    #1222729
    James Millar
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    Every measure has an opportunity. The early access to super measure could easily be “optimised” as well. You could easily met the tests, withdraw the $20,000 tax free and then recycle the money back into super claimed a full tax deduction. If you were a sole trader on circa 35% tax rate (may) then you get a net tax benefit of $4000 being $7000 tax value of deduction less $3000 tax the super fund pays on re-contribution.

    Video on our facebook page shortly – happy Friday

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222730
    Tradie1
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    Many thanks again james…. appreciated… super withdrawal would be a last resort for us as i dont have a lot and lost quite a bit of what i did have back in 08…. personal super contributions were on my list for this year and beyond as have just finished paying off other business assets and we were having a good year until now…. for the short term we are ok, im more concerned about what the future holds. But i/we will survive may have diverisfy a little a change the way we do some things but that is given for the whole world after this i rekon…. btw the human side of this carries much more value than finances, im just concerned for my family and would like to see to some help for ALL workers…. time will tell… stay safe all

    #1222731
    James Millar
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    Tradie1, post: 269230, member: 117450 wrote:
    Many thanks again james…. appreciated… super withdrawal would be a last resort for us as i dont have a lot and lost quite a bit of what i did have back in 08…. personal super contributions were on my list for this year and beyond as have just finished paying off other business assets and we were having a good year until now…. for the short term we are ok, im more concerned about what the future holds. But i/we will survive may have diverisfy a little a change the way we do some things but that is given for the whole world after this i rekon…. btw the human side of this carries much more value than finances, im just concerned for my family and would like to see to some help for ALL workers…. time will tell… stay safe all

    Yeah the point of this tax hack is that you return the money straight back into your super fund (recycle) so you are ultimately only depleting it by $3000 but getting a $7000 tax benefit in your personal name. Assuming of course it would not put you over your $25,000 annual cap or carry forward cap

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1222732
    Tradie1
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    Yeah just realised that when i looked at ur other thread. Good advice… will look into it….. cheers

    #1222733
    Paul – FS Concierge
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    Tradie1, post: 269225, member: 117450 wrote:
    still happy to pay the gst component

    Just a point of clarification that people do miss – sorry in advance if this is not you.

    When you provide a product or service subject to GST, you apply a tax on behalf of the Government. You collect the Tax, deduct GST inputs from it and then remit the rest Tax to the ATO.

    In most cases, it is the end consumer that “pays the GST”, not the business that collects it.

    A simple way that I use to think about it is that it is not my money, it was never my money and if I spend it, I am effectively loaning from the ATO.

    Cheers

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