Small business lodgement penalty amnesty deadline

Posted on 18 December 2023 | by Allan Hall

Clock ticking on small business lodgement penalty amnesty

Small businesses have until the end of December 2023 to get back on track with overdue forms via the small business lodgement penalty amnesty.

Late lodgement penalties will be remitted under the amnesty which ends on 31 December 2023 for small business income tax returns, fringe benefits tax (FBT) returns and business activity statements (BAS) originally due between 1 December 2019 and 28 February 2022.

More than 14,000 small businesses have taken advantage of the amnesty since it kicked off on 1 June 2023, with more than $48 million in failure to lodge (FTL) penalties remitted.

Directors who bring their company lodgements up to date can also have FTL penalties remitted if they rely on company lodgements to finalise their tax affairs. This applies to eligible lodgments made between 1 June and 31 December 2023.

The amnesty provides an opportunity for small businesses to re-engage with their tax affairs and get back on track with their lodgement obligations without penalties.

If a small business has ceased trading, they need to advise their registered tax professional or contact the ATO directly to seek assistance with finalising their tax obligations, which may include lodging overdue returns, cancelling their ABN and paying any amounts overdue.

While penalties will be remitted under the amnesty, if a business finds themselves with a tax debt after their overdue forms are lodged, they must pay in full to avoid further interest charges or check the ATO website to see if they are eligible for a payment plan.

CONTACT ALLAN HALL BUSINESS ADVISORS

Insurance for tax audit costs

Posted on 21 April 2023 | by Allan Hall

Limit your costs in the event of an audit with tailored coverage

The ATO has been funded with an additional $1.5 billion to increase the volume of audits and reviews, making it more likely that businesses and individuals will be audited.

Considerable costs can be involved in responding to an ATO tax audit, as you may need your accountants to prepare detailed responses and compile supporting documentation.

The costs can quickly add up to significant levels for the work involved.

AuditCover audit insurance covers professional fees in the event of an audit. Policies are available starting from $99 for individuals and $150 for businesses and groups, and the premium is tax deductible.

AuditCover audit insurance covers audits and reviews for:

Capital Gains Tax
Income Tax
Land Tax
Payroll Tax
Workers Compensation
BAS/GST Compliance
Superannuation Guarantee
Fringe Benefits Tax
Stamp Duty and more…

CLICK HERE TO GET A QUOTE

For any questions please call AuditCover on 1300 895 797 or read more here. Allan Hall clients are invited to obtain a quote from AuditCover.

DISCLAIMER: As with any insurance, it is important that you read the Policy Wording and ensure that the product is right for you. This page is intended to provide general information about tax audits and AuditCover and does not constitute advice.

CONTACT ALLAN HALL BUSINESS ADVISORS

Increase in fuel tax credit rates

Posted on 6 February 2023 | by Allan Hall

Fuel tax credit rates increased on 1 February

This increase is in line with fuel excise indexation.

Here’s what you need to know

The easiest way to apply the correct rate is to use the ATO’s fuel tax credit calculator when making a claim on BAS
The ATO’s simplified method can be used to claim less than $10,000 a year in fuel tax credits.

If you claim less than $10,000 in fuel tax credits per year, the easiest and safest way to get your claims right is to use these simplified methods. These include:

the basic method for heavy vehicles which works out your off-public road use for you, so you don’t miss out on any credits
using the rate that applies at the end of your BAS period.

When working out your fuel tax credits, remember to use these tips to help get your fuel tax credits right:

Check how your fuel is used
Check you’re using the right rate — you may need to use different rates for fuel that was acquired before and after 1 February
Use the ATO fuel tax credit calculator to help you calculate your claim.

Registered tax agents and BAS agents can always help you with your tax, including making a correct claim.

CONTACT ALLAN HALL

Fuel tax credit rate changes

Posted on 26 September 2022 | by Allan Hall

Making the correct fuel tax credit claim

If you claim fuel tax credits, multiple rates may apply to your business activity statement (BAS) that is due in October, depending on when you acquired the fuel.

Changes to fuel tax credit occurred on 30 March, 1 July (biodiesel only), 1 August and 29 September 2022.

The easiest way to ensure you are using the correct rate is to use the fuel tax credit calculator.

The temporary reduction of fuel excise duty ended on 28 September 2022. From 29 September 2022:

increased fuel tax credit rates apply. You must only apply this increased rate to fuel acquired from this date
if you’re an eligible business that uses fuel in heavy vehicles for travelling on public roads, you can claim fuel tax credits. You cannot claim between 30 March to 28 September 2022. This is because the road user charge exceeds the excise duty paid and this reduces the fuel tax credit rate to nil.

Remember to always keep accurate records to support any claims. Your records need to show the type, date and quantity of fuel acquired for business activities.

Your registered tax or BAS agent can help correctly calculate your fuel tax credit and lodge your BAS.

CONTACT ALLAN HALL

Relief for flood-affected communities

Posted on 15 March 2022 | by Allan Hall

Help for businesses affected by storms and floods

Financial support

We outline both state and federal financial recovery assistance for people impacted or affected by the recent NSW floods.

Please liaise with the relevant agencies directly and contact us if you require support in making an application for funding.

Small business and not-for-profit organisations

Disaster recovery grant – up to $50,000 to help pay for the cost of clean-up and resuming operations
Disaster recovery allowance – a short-term income support payment to assist if you’ve lost income as a direct result of the floods, provided by the Australian Government
Stamp duty relief – for replacing insured commercial motor vehicles written off due to floods and storms
Disaster relief loans – concessional interest rate loans up to $130,000 for small businesses and up to $25,000 for not-for-profit organisations.

Primary producers

Special disaster grant – up to $75,000 to help pay for the cost of clean-up and resuming operations
Disaster recovery allowance – a short-term income support payment to assist if you’ve lost income as a direct result of the floods, provided by the Australian Government
Stamp duty relief – for replacing insured commercial motor vehicles written off due to floods and storms
Natural disaster transport subsidy – up to $15,000 to cover costs of transporting fodder/water to an affected property, stock to sale or slaughter and stock to/from agistment
Disaster relief loans – concessional interest rate loans up to $130,000 for business continuity and to replace or repair damage not covered by insurance
Flood-affected farmers and land managers who require assistance with livestock assessment, veterinary assistance, emergency fodder and livestock euthanasia or burial, can call 1800 814 647.

Sport and recreation clubs

Disaster relief grant – up to $2,000 to assist with clean-up and restoring essential facilities and equipment
Disaster relief loans – concessional interest rate loans up to $10,000 to help meet the costs of restoring essential club facilities, equipment or other assets

Clean-up support

Flood-impacted businesses will receive clean-up assistance, including the removal of debris, mud and green waste.

Skip bins and dump trucks have started to appear on the streets. Where there are no skip bins or dump trucks available, separate waste on the kerbside until they arrive.

Cleaning up after a natural disaster can be dangerous. Here’s some advice on how to clean up safely and deal with hazardous waste.

Request clean up support »

Additional support

Use the Disaster Assistance Finder to generate a customised list of flood recovery services.

Also, taxpayers in flood-affected local government areas in NSW and QLD are provided with immediate tax relief to alleviate pressures on cash flow and operations.

The Treasurer announced that affected taxpayers will be eligible to receive the following concessions:

additional time to meet their upcoming Business Activity Statement (BAS) obligations
taxpayers paying PAYG instalments on a quarterly basis are eligible to vary upcoming instalments and receive a refund of previously paid instalments
claims for GST refunds will be expedited to ensure eligible taxpayers promptly receive their payments
small business and individual taxpayers will be able to notify the ATO about their circumstances to assist them in their situation.

The ATO has also announced that small businesses and individuals who need to lodge a BAS or instalment with an original due date of 28 February 2022 or 21 March 2022, and are not able to lodge by that date, may lodge these returns by 28 March 2022 without needing to request a lodgement deferral. Taxpayers who are unable to lodge by the new deadline of 28 March 2022 should contact the ATO and apply for a deferral as required.

The ATO has indicated that the payment due date will remain the same for these returns, but they will take an empathetic approach to the situations of affected taxpayers. Note that this concession does not apply to significant global entities or large businesses, who should contact the ATO to discuss their situation.

The ATO understands that tax is not your number one priority at this time, however you are encouraged to lodge when you can. The ATO has established an emergency Infoline on 1800 806 218 to answer any questions or provide urgent support to taxpayers.

Mental health support

Natural disasters, cleaning up and recovery can take a toll on your mental and physical health. It’s important for you to seek support and look after your own and your employees’ wellbeing.

Find out more »

CONTACT ALLAN HALL

close up of completing Australian tax form

ABN intent to cancel program

Posted on 13 December 2021 | by Allan Hall

The ATO is reviewing Australian business numbers (ABNs) to identify potentially inactive ABNs for cancellation.

We’ve made improvements to the ABN cancellation program by introducing a new automated process that allows you to confirm if an ABN is still required via a secure voice response system.

An ABN may be selected if it has not reported business activity in a tax return, or there are no signs of business activity in other lodgments or third-party information.

Any income earned under an ABN needs to be reported in your tax return, regardless of the amount. By keeping your tax obligations up to date the ATO can see you are actively undertaking a business, therefore the ABN should not be cancelled.

If the ATO believes you are no longer carrying on an enterprise, they may contact you or your accountant to advise of their intention to cancel the ABN.

If your ABN is identified for cancellation you may be contacted and advised what actions you need to take to prevent your ABN from being cancelled
If you are no longer in business, no action is required to be taken
If your ABN has been cancelled and you are still entitled to one, you will need to re-apply to reactivate it.

COVID-19 JobSaver payment

Posted on 26 July 2021 | by Allan Hall

JobSaver cash flow support to impacted businesses to help maintain NSW employee headcount on 13 July.

Applications close 18 October

» UPDATE: JobSaver expanded following NSW lockdown extension

The eligibility for JobSaver has been released and is expected to be open for applications from 26 July 2021. The program objective is to help businesses save jobs to support the economy after restrictions are lifted.

JobSaver will provide cash flow support for impacted businesses that will receive a backdated fortnightlypayment to cover costs from week 4 (18 July) of the Greater Sydney lockdown, onwards.

Businesses that have applied and are eligible for the 2021 COVID-19 business grant will generally be automatically eligible for JobSaver but must provide further information on employee headcount and payroll. These businesses may be contacted by Service NSW if further information is required.

Some businesses that are not eligible for the 2021 COVID-19 business grant are still eligible provided they meet specific criteria. These businesses will be required to complete an application form.

Available funding

Fortnightly payments backdated to cover costs incurred from week-4 of the Greater Sydney lockdown (from 18 July). Once eligible, fortnightly payments will be automatic and businesses will not need to re-apply but must notify Service NSW if they are not maintaining their headcount that they had on 13 July. First payment backdated to 18 July.
Minimum payment of $1,500 per week and maximum of $10,000 per week equivalent to 40% of Weekly Payroll for work performed in NSW.
Non-employing businesses will receive $1,000 per week.
The Weekly Payroll amount will be worked out by reference to the W1 amount reported on the most recent activity statement lodged with the ATO prior to 26 June 2021. For most businesses this will be either the March 2021 BAS (for quarterly withholders) or the May 2021 IAS (for monthly withholders). Amounts withheld on behalf of contractors and wages not related to NSW should be removed.
Weekly Payroll Calculation– Take amount at W1 subtractW1 amounts that relate to states other than NSW subtractamounts withheld on behalf of contractors. The remaining amount is then divided by the number of days in the BAS period (depends on quarterly or monthly lodgment) and multiplied by 7. This will give the Weekly Payroll amount.
The weekly payment (paid fortnightly) will be calculated as 40% of the amount calculated above as the Weekly Payroll amount.

Example

As an example, a business that lodged a W1 amount of $20,000 on their May Activity Statement (so a monthly withholder – assume only NSW wages and no contractors):

W1 = $20,000
Weekly Payroll – $20,000 divided by 31 days multiplied by 7 days
Weekly Payroll equals $4,516
Weekly Payment – $4,516 x 40%
Weekly Payment equals $1,806
This business would receive a payment of $3,612 per fortnight

Note: A quarterly withholder would likely use the March 2021 BAS and 90 days rather than 31 days in the above example.

Businesses that do not submit a BAS (such as weekly withholders) or have no W1 amount should use the ATO definition of W1 to calculate total wages. Then apply the same method as above.

Eligibility criteria

Must have an ABN and operating in NSW at 1 June 2021. There are some exemptions if you have an ABN outside NSW but can demonstrate you operated within NSW at 1 June 2021.
Aggregated turnover of more than $75,000 and less than $50M for year ended 30 June 2020. A micro business grant for businesses or sole traders with turnover of more than $30,000 but less than $75,000 will be available from late July.
Decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the Greater Sydney lockdown (26 June and due to end 30 July compared to the same period in 2019).
For employing businesses, maintain head count as at 13 July (Persons employed in NSW and who are Full-time and part-time and long-term (more than 12-month casuals) while they continue to receive JobSaver payments.
Businesses that do not maintain the declared headcount must notify Service NSW. An employer will remain eligible if an employee voluntarily resigns.
For non-employing businesses, the business receiving the payments must be the primary income source for the associated person. Individuals with more than one non-employing business can only claim from one business.
Entities earning passive income (such as rental income) are not eligible.
Employees canreceive Commonwealth COVID-19 Disaster Payments if their employer is receiving JobSaver.
Non-employing businesses are noteligible for JobSaver if individuals associated with and deriving income from the business are receiving the Commonwealth COVID-19 Disaster Payment.

Evidence in support of eligibility

Applicants must have experienced a decline in turnover of 30% or more over a minimum 2-week period from 26 June 2021 to 30 July 2021 compared to the same period in June and/or July 2019.
Declare headcount on 13 July and declare this headcount will be maintained.
Submit a tax return, notice of assessment or other document to show turnover between $75,000 and $50M.
Evidence of Weekly Payroll:
- Most recent BAS with a W1 amount submitted prior to 26 June within the 2020-21 financial year;
- For businesses with no W1 (weekly withholder) their 2019-20 payroll tax return;
- For business that do not submit a BAS – contact Service NSW.
There is no alternate test for businesses that were not operating in 2019 (or if 2019 is not a true comparison) or did not meet the minimum $75,000 turnover. These applicants must contact Services NSW.
If you are in a highly impacted industry a letter from your accountants is not required with your application.
Anyone not in one of the highly impacted industries will require an accountant letter to submit with their application.

Some important notes

Applicants must have lodged a 30 June 2020 tax return to demonstrate a minimum $75,000 turnover. We understand some clients that are eligible may not have lodged their 2020 tax return, however, we understand there will be other options available to prove the $75,000 turnover requirement. If you are in this position, please contact your Allan Hall advisor.
Funding received from JobSaver is to be used to cover costs incurred from 18 July (Wages, rent etc.) The primary objective is to maintain employee relationships.
Businesses that applied and were eligible for COVID-19 business grant will generally be automatically eligible for JobSaver but must provide further information on employee headcount and payroll.
Construction and other industries are now considered highly Impacted .
Where a business operates through a Trust, they will be required to provide additional information to demonstrate an aggregated turnover of $75k or more is derived through the Trust, as opposed to a business linked to a trust.

See more information at https://www.service.nsw.gov.au/jobsaver-payment-guidelines or call Allan Hall’s team on 02 9981 2300.

Other Employment Options

There are also a number of other options for employers to consider at this time, including:

Allowing employees to continue to work from home
Standing down employees unable to work with no pay
Agreeing on changing rosters and hours of work
Agreeing on changing employees’ duties

See our HR team’s article here for more details. Alternatively, please contact our HR team directly to discuss your unique business circumstances by emailing [email protected] or calling 1300 675 393.

NOW OPEN 2021 COVID-19 business grant

Posted on 19 July 2021 | by Allan Hall

Eligibility for the 2021 COVID-19 business grant released

Registrations are expected to be open from today. Online applications will close on 13 September 2021.

» You can apply online at https://www.service.nsw.gov.au/transaction/2021-covid-19-business-grant

We have been through the detailed guidelines and summarise as follows.

Available funding

30% or more reduction in turnover – $7,500
50% or more reduction in turnover – $10,500
70% or more reduction in turnover – $15,000
Multiple businesses under one ABN are only eligible for one grant.

Eligibility criteria

Must have an ABN and have been operating in NSW at 1 June 2021. There are some exemptions if you have an ABN outside NSW but can demonstrate you operated within NSW at 1 June 2021.
Total Australian wages less than $10M at 1 July 2020.
Aggregated turnover of more than $75,000 less than $50M for year ended 30 June 2020. A micro business grant for businesses or sole traders with turnover of more than $30,000 but less than $75,000 will be available from late July.
Business costs that no other grant is available for (such as fees & charges rebate).
Maintain employee head count as at 13 July (Persons employed in NSW and who are full-time and part-time and long-term (more than 12 month) casuals). This means that the employer-employee relationship must be maintained, consistent with employment law (ie employment cannot be terminated). However employer will remain eligible if an employee voluntarily resigns.

Decline in turnover conditions

Your business must have experienced a decline in turnover of 30% or more over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to the same period in June and/or July 2019.
There is no alternate test for businesses that were not operating in 2019 (or if 2019 is not a true comparison) or did not meet the minimum $75,000 turnover. These applicants must contact Services NSW.
If you are in a highly impacted industry you only need a letter from your accountant for the $15,000 Grant. Service NSW will release $10,500 immediately and the additional $4,500 when you provide the letter. For the $7,500 and $10,000 Grant Service NSW requires you to include Allan Hall’s details for potential compliance.
Applicants not in one of the ‘highly impacted industries’ require an accountant’s letter to confirm their reduction in turnover. Contact your Allan Hall advisor who can assist with providing this.

Some important notes

Applicants must have lodged a 30 June 2020 tax return to demonstrate a minimum $75,000 turnover. We understand some clients that are eligible may not have lodged their 2020 tax return, however, we understand there will be other options available to prove the $75,000 turnover requirement. If you are in this position, please contact your Allan Hall advisor.
Non-employing businesses are not eligible to apply if persons associated with the business, and who derive income from it, have applied for, or are receiving, the Commonwealth Covid-19 Disaster Payment.
Where a business operates through a Trust, it will be required to provide additional information to demonstrate an aggregated turnover of $75,000 or more is derived through the Trust, as opposed to a business linked to a trust.

The Public Health Orders have created challenges for many businesses and the purpose of this one-off grant is to help cover business expenses and support employment for the first three weeks of the restrictions that were announced on 26 June.

From Week 4, eligible businesses will receive a minimum of $1,500 and a maximum of $10,000 per week under the JobSaver program announced by the NSW Government. Applications for the JobSaver program will be available from 26 July. We will communicate additional information on the JobSaver program when they are released by Services NSW later this week. Please refer to our previous article with what we know so far.

To avoid delays in preparing an application, please also refer to the Get readysection of our other previous article .

In addition, there are a number of options available to employers and employees during this time. Our HR team have prepared an article covering some key aspects, please click here for more information.

Heavy vehicle fuel tax solution for modest claims

Posted on 1 March 2021 | by Allan Hall

The ATO has released a simpler way to calculate fuel tax credits for diesel used in heavy vehicles.

Truck owners that use a heavy vehicle and who claim less than $10,000 each year can use the new “basic method”.

The method makes it easier to work out on and off public road use. The rate for travel off public roads is higher than on public roads, meaning more fuel tax credits are made if off public road use is calculated correctly.

Examples of travel off public roads includes heavy vehicle use in warehouses, depots or car parks, where a heavy vehicle may be idling, loading or unloading.

This method can be used for diesel acquired on or after 1 October 2020. Any other methods for calculating fuel used for travel on and off public roads cannot be used this method is applied.

The basic method for heavy vehicles when lodging the next business activity statement (BAS) can be found here.

Just started using fuel in your business? Check if you are eligible for fuel tax credits on the ATO website here.

Have you got a question about calculating fuel credits in your business? Get in touch with our Tax & Accounting team who will be able to assist you on 02 9981 2300.