Business Cost Assistance Program Round Four – Construction

The Victorian government’s grant program to provide financial assistance to businesses in the construction industry, which were impacted by the recent Covid mandates, is now open.  The program will remain open until 11:59pm on 9 November 2021 or when funds are exhausted, whichever is sooner.  Therefore eligible businesses should apply as a matter of urgency.

Eligibility

  • To be eligible for the program, businesses must:
  • hold an Australian Business Number (ABN) and have held that ABN on and from 24 September 2021
  • be registered with the responsible Federal or State regulator eg ASIC
  • be located within Victoria
  • be registered for Goods and Services Tax (GST) on and from 24 September 2021
  • (for employers) have an annual Victorian payroll of up to $10 million in 2019-20 on an ungrouped basis
  • operate in an eligible sector listed on this list of eligible ANZSIC classes
  • have been contracted (prior to the restriction period being announced) to undertake, or supply workers to undertake, work at a construction worksite that was shut down due to the COVID-19 restrictions announced 20 September 2021 in Local Government Areas in metropolitan Melbourne, City of Greater Geelong, Mitchell Shire, or Surf Coast Shire.
  • have incurred direct costs because of the restrictions in effect from 21 September to 4 October 2021 and been unable to operate remotely.

Businesses that employ staff must be registered with WorkSafe Victoria, and attest that the business is supporting its workers to access any paid leave entitlements during the construction sector shutdown, and supported their causal workers, where possible.

Where a business does not employ staff the business owner must hold a WorkSafe Construction Induction Training Card (white card or ‘ticket’), or interstate equivalent.

Recipients of the Business Costs Assistance Program Round Two, the Business Costs Assistance Program Round Two July Extension, or the Small Business COVID Hardship Fund are not eligible for this grant.

How much is the grant?

The amount of the grant will be determined by the size of the payroll, as follows:

  • $2000 for non-employing businesses
  • $2800 for employing businesses with annual payroll below $650,000
  • $5600 for employing businesses with an annual payroll between $650,000 and less than $3 million
  • $8400 for employing businesses with an annual payroll between $3 million and $10 million.

Businesses that receive funding under this program will not be eligible for automatic top-up payments under the Business Costs Assistance Program Round Two and the Business Costs Assistance Program Round Two July Extension.

More information

The program guidelines are available here.

A helpful list of Frequently Asked Questions can be accessed here.

You can apply here.

We are here to help

We are ready and equipped to support you, so please don’t hesitate to contact us if we can be of help. Just call us on 9878 1477, or email us at contact@rdlaccountants.com.au

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COVID-19 Home Office hourly claim extended

The ATO has recently announced a further extension to the temporary shortcut method for claiming home office running costs, extending the method to 30th June 2022.

Initially announced in early April 2020, the shortcut method allows a taxpayer to claim a fixed rate of 80 cents per hour where he or she worked from home. 

The fixed rate of 80 cents per hour covers all the following running expenses:

  • power, light and heating
  • cleaning costs
  • the decline in value and repair of home office items such as home office furniture and furnishings, phone, and computer or laptop devices
  • phone and internet expenses
  • stationery and computer consumables

It is important to note that if you choose to use this shortcut method, you will not be able claim a further deduction for any of the expenses listed above, as this is an “all-inclusive” rate.

It is also worth noting that each individual working from home will be entitled to claim 80 cents per hour, irrespective of how many people live in the same house.  This increases the appeal of this method where a number of people are working from the same location.  In addition, this method of claiming can be used where there is no separate or dedicated working space, which is a concession on the normal rules, and caters for many who have had to work from, for example, the kitchen table.

It will be necessary to keep a record of hours worked from home to back your claim.  The ATO has specified that appropriate records could include a timesheet, roster, diary or similar document that sets out the hours you worked.

You may, of course, continue to use one of the existing home office deduction methods.  The shortcut method is merely an alternative that has been offered as a concession in the current climate.

With a Productivity Commission paper stating that in less than two years, we have gone from less than 8 per cent of Australians working from home to 40%, the ATO is now looking to more agile and simpler methods to allow taxpayers to claim costs of working from home.

If you need more information, or help in determining which claim is best for you, please contact our office on 9878 1477.

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Electronic Signing of Documents


Streamlined delivery of documents to you
We have recently decided to move to a streamlined easy-to-use electronic signing platform, as one of our highest priorities is getting documentation out to our clients as quickly and securely as possible.

Our practice has decided to implement FuseSign, an electronic platform that will allow us to securely deliver documents to you electronically, as well as enable you to electronically sign documents.  This system relies on your mobile phone number as your authenticator when signing your documentation.

What does this mean for you?
In the coming weeks we will begin sending eligible documents under this system, which you will be able to approve by signing electronically.  Please note that this will come from a “FuseSign” email address.

In the meantime you can view this short video to explain how the new system will work.  Just follow the link https://vimeo.com/439139011

Of course, this system will not replace meeting with you to discuss your financial and tax affairs.  You might prefer to receive and sign documents in the traditional paper format which is perfectly fine.  You can just let us know.

We see this system of digital signing as a quick and simple way to deliver documents to you, enabling you to approve and sign documents with minimum effort. 

Please let us know if you have any questions or concerns.

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Director identification numbers available soon

The Federal government has now confirmed the due dates for application by all directors for a Director Identification Number (DIN), with applications open from November 2021.

 The rules require existing company directors to apply for a DIN by 30 November 2022, while directors of Indigenous corporations that are governed by the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act) will be required to apply for the unique identifier by 30 November 2023

New directors appointed between 1 November 2021 and 4 April 2022 will be required to apply for a DIN within 28 days after appointment, while those directors who are appointed from 5 April 2022 will be required to apply for their DIN before appointment.

Applications may be made on the newly established Australian Business Registry Services (ABRS), a single platform administered by the Commissioner of Taxation, combining ASIC’s 31 business registers and the Australian Business Register.

Directors are required to apply for their director ID themselves, and produce their myGovID alongside two identity documents from a list including their bank account details, super account details, ATO notice of assessment, dividend statement, Centrelink payment summary, and PAYG payment summary.

Unlike a tax file number which is subject to privacy restrictions, the DIN will be publicly available and will attach to a director for life.  It will provide traceability of a director’s relationships across companies, enabling better tracking of directors of failed companies, and preventing the use of fictitious identities.

Under this law, directors who fail to apply for a director ID within the stipulated time frame can face criminal or civil penalties of 5,000 penalty units, which currently stands at $1.11 million. Directors of a CATSI organisation can face penalties of up to $200,000.

The penalties also extend to conduct that undermines the new requirements, including providing false identity information or intentionally applying for multiple DINs.

Do you need to know more?  Just give us a call.

 

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Government grants for construction businesses

The Victorian government has released limited details of the Business Cost Assistance Program Round 4 – Construction, providing financial assistance to businesses in the construction industry, which were impacted by the recent Covid mandates.

Key eligibility criteria are as follows:

  • Businesses must have a worksite located in metropolitan Melbourne, the City of Greater Geelong, Mitchell Shire or Surf Coast Shire.
  • Businesses must have incurred direct costs because of restrictions in place between 21 September – 4 October, which have not been partially or fully recovered.
  • Business must not have been able to operate remotely between 21 September – 4 October.
  • Must not have received a Business Costs Assistance Program Round 2 or Business Costs Assistance Program Round 2 – July extension payment, or Small Business COVID Hardship Fund payment

The program is expected to open on 5th November 2021.

Businesses will need to fall within specified industries (based on ANZSIC code) to qualify for  a one-off payment of  $2,000 for eligible non-employing construction industry businesses, and one-off amounts of $2,800, $5,600 or $8,400 for eligible employing construction industry businesses, based on payroll size.

We will provide further details as they are announced.

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Support for Commercial Landlords

The recent reintroduction of the Commercial Tenancy Relief Scheme will require certain landlords to provide rent concessions to small to medium commercial tenants with an annual turnover under $50 million, which have been significantly impacted by COVID-19.

In recognition of the anticipated impact on commercial landlords, the Victorian government this week released details of its Commercial Landlord Hardship Fund 3

 

This is a $20m fund providing grants to commercial landlords who experience hardship as a result of waiving rent for their tenant(s) under the Commercial Tenancy Relief Scheme.  Landlords can apply for a grant of up to $6,000 per eligible tenancy in proportion to their ownership share.  In cases where landlords are experiencing acute hardship because of the rent waiver agreed with their tenant(s), the grant may be increased to a maximum of $10,000 per eligible tenancy.

 

Applications to the Commercial Landlord Hardship Fund 3 close at 11:59pm on 15 January 2022, or until funds are exhausted.

To be eligible for a grant landlords must:

  • have total taxable landholdings of less than $3 million.  This refers to the land value of all property held as shown on the 2021 Land Tax Assessment or Rates notices (where the value of all land held is under $250,000).  It includes part-holdings of properties but excludes the owner’s principal place of residence.
  • be an owner and landlord of the property for which an application is made (you cannot apply as a sub-lessor)
  • be a landlord that has made a rent relief agreement with their tenant(s) under the Commercial Tenancy Relief Scheme in operation between 28 July 2021 and 15 January 2022
  • be an Australian citizen, resident or Australian incorporated entity (Trusts are included).
  • state that commercial rent represents more than 50 per cent of their total gross annual income for the 2019-20 financial year.

To be eligible for acute hardship consideration, landlords must provide an accountant’s letter confirming that commercial rent represents at least 70 per cent of their total gross annual income for the 2019-20 financial year, and that the landlord is neither an owner occupier nor a related party of the tenant.

Owner occupied properties are eligible for the basic $6,000 grant under special conditions.

You can access details of the grant here, or simply contact your RDL accountant for more information.

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Victorian Covid relief payments declared tax free

Earlier this month, the Federal Government passed legislation to enable the Treasurer to decide which state and territory business support programs would be eligible for tax-free status, known as non-assessable non-exempt (NANE) income.

In light of this, Federal Treasurer Josh Frydenberg has declared amounts received from the following five Victorian business support programs as NANE:

  • the Alpine Resorts Support Program (Streams 1, 2 and 3);
  • the Business Continuity Fund;
  • the Business Costs Assistance Program Round Two – July Extension;
  • the Licenced Hospitality Venue Fund 2021 – July Extension; and
  • the Small Business COVID Hardship Fund.

The legislation passed earlier in the month also provides individuals receiving COVID-19 Disaster Payments with tax-free payments.  Under this program workers who lose 20 or more hours of work a week will receive the full $750 a week, while those who lose between 8 and 20 hours will receive $450.

Our office is currently assisting clients with applications for Victorian and NSW business support grants.  How can we help you?

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Small Business COVID Hardship Fund – now enhanced

Late last week the Victorian Government announced an increase in funding for the Small Business COVID Hardship Fund, increasing the amount of the grant from $10,000 to $14,000.  This is a grant for Victorian businesses that have been adversely affected by measures to combat the spread of COVID, and unlike earlier grants, access is not limited to specified industries.

Applications for the program are open and will remain open until program funds are exhausted or 11.59 pm Friday 10th September 2021, whichever is earlier.

Businesses that have received funding under any of the Victorian Government COVID-19 support packages launched on or after 27 May 2021 are not eligible for a grant under this program.

To be eligible, businesses must:

  • be located within Victoria
  • as a direct consequence of COVID-19 restrictions since 27 May 2021 have experienced a reduction in turnover of at least 70% for a minimum consecutive two-week period comparable to a benchmark period in 2019
  • have an annual Victorian payroll of up to $10 million in 2019-20 on an ungrouped basis
  • have been registered for Goods and Services Tax (GST) on and from 28 July 2021
  • hold an Australian Business Number (ABN) and have held that ABN on and from 28 July 2021
  • be registered with the responsible Federal or State regulator.

Employing businesses must also:

  • be registered with WorkSafe Victoria
  • attest that the business is supporting its workers to access any paid leave entitlements, or that if a person can work from home, to work from home during the COVID-19 restrictions, and supporting their casual workers, where possible.

In addition,  a business must demonstrate that as a direct consequence of COVID-19 restrictions since 27 May 2021 (the “Impacted Period”), they have experienced a reduction in turnover of at least 70% for a minimum consecutive two-week period, comparable to a “Benchmark Period” in 2019.  Such assessment will need to be supported by a statement from a Qualified Agent” (essentially the accountant).

You can find the guidelines here, and you can apply here.

RDL is also available to assist you.  We are just a call or email away.

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Are COVID-19 grants and funding tax free?

Most people would think that money provided by the Government to support people and business during a crisis would be tax free.  Otherwise, it’s like giving money with one hand and then taking it away with the other, isn’t it?

But, the tax laws don’t work like that. To make a payment tax-free, legislation is required to enable it to be classified as exempt income or non-assessable non-exempt income. In general, any income received will be assessable unless the Government has legislated for it to be tax-free. JobKeeper for example was not tax free and anyone who received it in 2020-21 will need to declare it in their income tax return. Businesses also will need to declare JobKeeper income in their tax return even if the full amount flowed directly to employees.

At the Federal Government level, the Prime Minister recently announced that the COVID-19 Disaster Payment will be tax free and legislation enabling this change is before Parliament. Prior to this, disaster recovery grant payments to primary producers and small businesses for floods between 19 February and 31 March 2021 were also made tax-free. Other payments however, such as the Pandemic Leave Disaster Payment, are taxable.

The Treasurer has also been granted the power to make COVID-19 relief provided by the States and Territories tax-free but only from 13 September 2020, and only if they request the Commonwealth Government to make it tax free.  If you’re confused, it’s not surprising. The result is a mix of tax treatments depending on what support you received and from whom.

To date, only a series of Victorian business grants are tax-free. The recent business grants in New South Wales, Queensland and South Australia have not as yet been declared tax free (but we expect that this will change).

The general rule is that grants are likely to be taxable unless they are specifically excluded from tax. If the grant relates to your continuing business activities, then it is likely to be included in assessable income for income tax purposes. The position can be different in cases where the payment is made so that the entity can commence a new business, or cease carrying on a business.  The good news with all this is that your RDL accountant can sort out for you what is taxable and tax free, so you don’t need to worry.

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New laws target sharing economy platforms

In an attempt to reign in undeclared income, proposed new laws will require platform providers in the sharing economy to report all transactions through their platforms.

Traditional employment models have shifted in favour of more flexible options including contracting, self-employment and use of labour hire. Consumers are increasingly paying to ‘use’ rather than ‘own’ assets, creating new income opportunities for the owners of assets – like AirBNB. And, the Government believes they are missing out on tax revenues from these payments – income tax from income earned, GST on ride sharing (because the ATO considers all ride sharing a taxi service and as a result GST applies), and capital gains tax on the sale of property used to earn income, etc.

While data matching programs have targeted sharing platforms previously, the proposed laws provide a structured and consistent framework to recognise all revenue earned in Australia through these platforms.

The laws target electronic platforms capturing those that act as intermediaries between buyers and sellers, as well as more complex arrangements where the platform operator assumes much of the inherent risk in the transaction between the buyer and the seller, play a quality assurance role, and ensure a seamless experience for the buyer and seller. The laws do not rely on the platform processing payments and will reach to those who use third party payment providers.

If implemented, the laws will apply to ride sharing and accommodation services from 1 July 2022, and all other services from 1 July 2023.

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