The ATO has prepared a range of resources to assist those in the security industry with their tax returns during this difficult period. As many individual’s working situations may have changed due to the Coronavirus pandemic, it is now more important than ever that everyone understands how to best prepare and lodge their tax returns, to ensure they claim their applicable deductions.
Take advantage of small business concessions
You may be able to reduce your tax bill if you are eligible for concessions such as instant asset write-off or immediate deductions for prepaid expenses. You may also be able to save time by estimating the value of your trading stock instead of doing a stocktake. Find out more about the different types of concessions at ato.gov.au/concessionsataglance
Follow the three golden rules when it comes to claiming deductions
You can claim a deduction for most of the costs of running your business. But it’s also important to remember the three golden rules so you only claim what you’re entitled to:
- The expense must have been for your business – not for private use.
- If the expense is for a mix of business and private use, you can only claim the portion that’s used for your business.
- You must have records to prove the expense and show how you worked out the business portion of an expense.
Work out your motor vehicle expenses the right way
The method you use to calculate your motor vehicle expenses depends on your business structure and the type of vehicle. For example, if you operate your franchise as a sole trader or partnership and the vehicle is a car, you can use the cents per kilometre method or the logbook method. However, if you operate your franchise as a company or a trust, you can’t use either of these methods and can only claim the actual costs based on receipts. Read more at ato.gov.au/motorvehicleexpenses
You may be able to claim home-based business expenses
If your home has been your main place of business (for example, if you have used your home as your main place of business because of COVID-19), you can claim deductions for the portion of expenses that relate to running your business. Your business structure also affects how and what you can claim. Find out more at ato.gov.au/homebasedbusiness
Remember to include all your income
Include all your income in your income tax return, including cash, coupons, EFTPOS, online, credit or debit card transactions, and income from other platforms such as PayPal, WeChat or Alipay. You may also have income from business assets, other business activities or capital gains. Getting your income and expenses right, and keeping good records of them, will also help you keep track of your turnover and cash flow.
Keep track of losses so you can claim a deduction for it later
It has been an extra challenging year and many businesses may find themselves making a loss for the first time. If your business makes a loss, you can generally carry forward that loss and claim a deduction for your business in a future year. How you can claim a tax loss depends on your business structure. Visit ato.gov.au/businesslosses for more information.
Know what to do if you take money out of your company or use its assets
If you take money out of, or use your company assets for private purposes, you need to report these transactions appropriately and keep proper records. There are different reporting and record-keeping requirements depending on how you have done it (for example, through your salary, a fringe benefit or a loan from the company). Find out more at ato.gov.au/Division7A
How to report JobKeeper in your business tax return
JobKeeper payments are taxable and need to be included in tax returns. If you’re a sole trader who has received JobKeeper payments, you need to include the payments as business income in your individual tax return. If your business is a partnership, trust or company, and you received JobKeeper payments, you don’t need to include it as assessable income in your individual tax return – but you need to report it as part of your business income.
Your workers who have received JobKeeper payments won’t need to do anything different as the payments will be included in their regular income statement that you provide as an employer.
How to report Cash Flow Boost in your business tax return
You don’t pay tax on the Cash Flow Boost credits as they are non-assessable non-exempt income, but you may need to report the amount for the purpose of other income tests. This is different depending on your business structure so talk with your tax agent for more detail.
Check that your records are complete and accurate
It’s important that you understand what records you need to keep, and they are complete and accurate. You need to keep most records for five years, store them in a safe place, and they must be in English (or easily converted to English). Check out ato.gov.au/recordkeeping. You can also use our record keeping evaluation tool at ato.gov.au/ recordkeepingevaluation to help you check how well you’re keeping your business records so you can make improvements in the future.
Get expert help if you’re having trouble with cash flow
Good cash flow means having enough cash at the right time to pay bills and meet your tax, super and employer obligations. You can prepare a cash flow projection (find out how at ato.gov.au/managecashflow) to help you see your likely cash position at any time. You can also talk to a registered tax professional about managing your cash flow and they can help you work through our cash flow coaching kit.
Look after your mental health
In tough times like these, it’s more important than ever to look after yourself and the ones you love. We have information available at ato.gov.au/smallbizmentalhealth. You can also check out the Australian Small Business and Family Enterprise Ombudsman’s My Business Health web portal at www.asbfeo.gov.au/my-business-health for practical tips.
If you are having difficulty meeting your tax and super obligations, we can work with you to develop tailored payment plans and defer lodgments and payments.
Ask for help if you need it
We want to work with you to solve problems before they escalate; it’s never too late to speak with us. If you've been affected by COVID-19, or a disaster such as bushfire or drought, and need some help with reconstructing records, we have information available at ato.gov.au/reconstructing-your-tax-records.
If you need some extra help with your tax and super affairs, you can contact us or your registered tax professional. We’re here to help.
Visit ato.gov.au/SBsupport our one-stop shop for tools and services to help make it easier for you to get your tax and super right.
Andrew Watson is an Assistant Commissioner in the Small Business area of the ATO. His role involves engaging and supporting small businesses so it’s easier for them to meet their tax and super obligations, and they get the help and support they need. He is also focused on driving the ATO’s digital services and helping small businesses manage their cash flow.
|There have recently been some changes to workplace laws to support employees and employers during the coronavirus pandemic.
The Fair Work Act has been amended to support the implementation and operation of the JobKeeper wage subsidy scheme (JobKeeper scheme) in Australian workplaces. These changes are temporary and will end on 28 September 2020.
The JobKeeper scheme helps employers significantly affected by coronavirus to keep paying their employees, by providing a subsidy administered by the Australian Tax Office. The changes also give eligible employers the ability to give certain directions to and make agreements with their eligible employees to help manage their business.
Unpaid pandemic leave & annual leave changes to awards
The Fair Work Commission has added a temporary new schedule into 99 awards to provide greater flexibility during the coronavirus pandemic. The temporary schedule gives employees:
The schedule applies from an employee’s first full pay period on or after 8 April 2020 until 30 June 2020. Find out more at Unpaid pandemic leave & annual leave changes to awards.
Annual Wage Review
The Fair Work Commission is in the process of carrying out its annual review of minimum wages. A decision is expected sometime in June. You can follow the process on the Fair Work Commission’s website, and we’ll send you more information when it’s available.
Coronavirus and Australian workplace laws
If your workplace is impacted by coronavirus, we have information about your workplace rights and obligations. This includes information about:
For more information, see Coronavirus and Australian workplace laws.
Safe Work Australia resources
The Safe Work Australia website provides a hub of work health and safety guidance and tools that Australian workplaces can use to manage health and safety risks related to COVID-19. It includes industry-specific guidance, information about physical distancing, personal protective equipment, cleaning, workers’ compensation, conducting risk assessments and designing emergency plans, and case studies showing how to manage COVID-19 risks in the workplace. Find out more on Safe Work Australia’s website COVID-19 Information for workplaces.
The Government has passed legislation on the JobKeeper Payment. We want to share information with you and your networks about how businesses and individuals can access the available support.
Please get in touch if you have any questions, and also note that our dedicated webpage ato.gov.au/coronavirus will be kept up to date with support and services available.
WHAT EMPLOYERS NEED TO KNOW
Employers need to take steps now to be eligible and ready to receive the JobKeeper payment in May. Our website has all of the information employers need in the one spot; ato.gov.au/JobKeeper
Other resources you may find useful:
Cash Flow Boost:
From 28 April 2020, eligible businesses and not-for-profit organisations will receive a tax-free cash flow boost of between $20,000 and $100,000 through credits in the activity statement system when they lodge their activity statements up to the month or quarter of September 2020.
Full details about eligibility, timing and what you need to do are on our website at ato.gov.au/cashflowboost.
WHAT EMPLOYEES NEED TO KNOW
Employees will need to meet eligibility criteria to access the JobKeeper payment from their employee. A breakdown of the requirements is on our website: ato.gov.au/JobKeeper
Working from home expenses
Additionally, The ATO has introduced a simplified method for claiming deductions for anyone working from home as a result of COVID-19. Between 1 March and 30 June 2020, taxpayers will be able to claim 80 cents per work hour for all their additional running expenses, rather than needing to calculate costs for specific running expenses. This new method is designed to make tax returns simpler for anybody who has recently transitioned to working from home due to COVID-19, and ensures they are able to easily claim their relevant deductions. This information has been summarised into a Working from home media release.
Other resources you might find useful is the ATO working from home poster
Early release of super
Eligible individuals will be able to apply for early access to their super from mid-to-late April 2020 through myGov. More information including eligibility requirements is available on our website: ato.gov.au/early-access
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees.
Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Please find below a breakdown of the various stimulus packages currently available.
Backing business incentive
- The cash flow boost has been enhanced and up to $100,000 is now available and is split into 2 periods.
- The first period is Jan to Jun 2020 and up to $50000 is available. The payment is now 100% of the PAYG up from 50%. (PAYG is the tax taken from employee wages.)
- The payment is tax free and is calculated automatically by the ATO based on the activity and instalment statements lodged. (BAS/IAS) The payment will be a credit on your tax account from 28 April 2020, if there is no debt then a refund will occur.
- The minimum payment has increased from $2000 to $20000. The payment for the first period will be $10000.
- To qualify for the second period the entity must continue to be active. The second period is Jul to Oct 2020 and entities will receive an additional payment equal to the first period. A quarter of the payment will be received in Jul/Aug/Sep/Oct.
- Applies to businesses with turnover under $50 million and that employ workers.
Business Loans Repayment Deferrals
Businesses can defer principle and interest repayments for up to six months. Some banks are also waiving merchant terminal fees. Contact your bank for their specific options.
Deferred ATO Payments and PAYG Instalments
- Payments can be deferred for up to 4 months.
- These include payments for Business Activity Statement, Income Tax and Fringe Benefits
- Businesses can vary PAYG instalments to $0 on the March BAS. A refund can also be claimed for any instalments from September 2019 and December 2019
- These are not automatic and need to be applied for so contact us or your accountant should you wish to explore these options.
Supporting Apprentices and Trainees
- Eligible employees can apply for a wage subsidy of 50% of their apprentice’s or trainee’s wage.
- The eligible period of 1st January to 30th September 2020. Employers will be reimbursed up to a maximum of $21000 per eligible employee.
- It will be paid at $7000 per quarter.
- To be eligible you must have fewer than 20 full time employees. They must be in training as at 1st March 2020.
- An eligibility assessment must be undertaken by an Australian Apprenticeship Support Network (AASN) provider.
- Employers can register for the subsidy from early April 2020; final claims for payment must be lodged by 31 December 2020.
- Contact an AASN provider for further information.
Supporting the flow of credit
- The Government and the Reserve Bank have coordinated to ensure the flow of credit.
- Under the Coronavirus SME Guarantee Scheme, the government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs.
- The scheme will guarantee up to $40 billion of new lending. SMEs with a turnover of up to $50 million will be eligible Maximum total size of the loans of $250000
- Loans will be up to three years with an initial 6 month repayment holiday
- The loans will be in the form of unsecured finance meaning borrowers won’t have to provide an asses as security,
- The scheme will commence early April 2020 and be available for new loans until 30 September 2020
- The government is providing an exemption from the responsible lending obligations for lenders providing credit to existing small business customers. This goes for 6 months.
- The RBA has announced a term funding facility for the banking system; it is $90 billion at a fixed rate of 0.25 per cent. To encourage lending to businesses with particular incentives applying to new loans to SMEs.
Temporary relief for financially distressed businesses
- Changes to how statutory demands can be issued: temporary increase in the threshold from $2000 to $20000 and the time to respond from 21 days to 6 months.
- Changes to bankruptcy proceedings: temporary increase in the threshold from $5000 to $20000 and extended time periods.
- Temporary relief for directors from any personal liability for trading while insolvent. This will apply for 6 months.
- For owners or directors of a business that are currently struggling due to the Coronavirus the ATO will tailor solutions including reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Increasing the instant asset write-off
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing Business Investment
The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Australian Federal Government and State Governments links on COVID 19 information and latest updates.
The Fair Work Ombudsman has secured penalties totalling $68,560 against the former directors of a Coffs Harbour security contractor found to have underpaid 14 employees almost $94,000.
The Federal Circuit Court found that Northcoast Security Services Group Pty Ltd (Northcoast Security), which has since been liquidated, contravened the Fair Work Act, and fined former company directors Kuldeep Chouhan and Ricky John Nelson, $32,560 and $36,000 respectively, for their involvement in the company’s underpayment of its workers.
The Court also ordered that both pay compensation of $128,678 in respect of underpayments and interest owing, noting that that they managed the operations of Northcoast Security and were responsible for the loss sustained by the workers.
The workers were paid flat rates as low as $18 an hour, with the exception of public holidays, while under the Security Services Award 2010, were entitled to around $40 an hour for some weekend, night and overtime work.
The company also underpaid broken shift allowances and made unauthorised deductions from employee wages to pay for uniforms and security equipment.
The Fair Work Ombudsman had previously informed Mr Chouhan about the need to pay employees their full lawful entitlements and commenced proceedings in 2014 after security guards contacted the regulator for help.
During the proceedings, Northcoast Security argued that the workers were actually employed by two labour hire entities, however the Fair Work Ombudsman rejected this argument and the Court agreed that Northcoast Security did employ the workers and had contravened the Fair Work Act.
The employees were issued rosters by Mr Chouhan, wore shirts bearing the logo of Northcoast Security and completed timesheets headed with the company’s name.
Fair Work Ombudsman Sandra Parker said the penalties and compensation imposed by the Court reflected the deliberate nature of the contraventions.
“Labour hire is a legitimate way to source staff, as long as they are paid correctly. Unfortunately some employers seek to use this arrangement unlawfully, to ignore award entitlements and get a competitive advantage over businesses that operate according to the law,” Ms Parker said.
“This judgment should serve as a warning to employers that they will get caught and face significant consequences for their actions, such as orders for significant compensation.”
In setting the penalties, Judge Manousaridis said that the penalty should “signal to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they do not comply, or take steps necessary to ensure they comply” with the Fair Work Act.
The Transport (Cash in Transit) Award has been varied as a result of the 4 yearly review of modern awards.
The new Transport (Cash in Transit) Award 2020 will commence on 4 May 2020. Future award MA000042 from 4 May 2020 (PDF)
This survey is to collect views on the current state, and future training needs, of the Property Services sector (which includes security). It will directly inform our project proposals for training products. Round 2 of the survey closes on the 17 February 2020.