1. Maximise Cash Receipts from the Updated Government Stimulus Package
Review the Australian Government stimulus package for business cash flow. Identify which key parts your business may be eligible for and get the process started to obtain these cash flow bonuses.
- Boosting Cash Flow - Up to $100,000 credit or cash payment against activity statements equal to 100% of PAYG withheld from employees from March 2020 to September 2020
- Boosting Cash Flow – Minimum payment of up to $20,000 even if employers aren’t required to withhold tax from employees
- JobKeeper Payment* – Subsidy paid to you by the Government of $1,500 per fortnight per eligible employee or business participant from 30 March 2020.
- Instant Asset Write-off – Up to $150,000 per asset can be instantly written off for assets purchased by 30 June 2020. Applies to businesses with turnover up to $500 million.
- Accelerated Depreciation Deductions – Deduction of up to 50% of the cost of an asset in addition to existing depreciation rules.
*A note about the JobKeeper payment - Entities (such as partnerships, trusts or companies) and sole traders may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one $1,500 JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant.
Not sure if your business is eligible? Contact us today!.
2. Prepare a Cash Flow Forecast for 12 Months
We suggest preparing your business cash flow plan over the coming months, (you are welcome to meet with us to do this). You need to forecast your daily and weekly planned cash position to make informed decisions, like when you may need additional bank funding.
3. Consider Delaying Payments to the ATO
Keeping the farming business alive means paying your employees (where applicable), and your key suppliers. Nothing else matters over the short term.
You may need to delay making payments of GST, PAYG Instalment and Employee PAYG Tax to the ATO. See the section below about ATO Tax Relief Options.
Important:
It’s vital that you keep lodging your Business Activity Statements (BAS’s) and Instalment Activity Statements (IAS’s) by their due dates and negotiate a delayed payment with the ATO, otherwise the ATO may view the PAYG withholding portion as non-compliant and you will then lose you tax deduction for these amounts.
4. Review ATO Tax Relief Options
The Australia Taxation Office (ATO) is implementing a series of relief options to assist those impacted by the coronavirus. The relief will not be automatically applied.
We or you need to contact the ATO on to make any of the following requests for assistance:
- Businesses can call the ATO’s Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances.
- Individuals and businesses can request deferral of some payments (by up to 4 months) and vary instalments.
- Businesses (under $20 million turnover) can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months.
- Quarterly payers can vary their PAYG instalments for the March 2020 quarter and claim a refund of instalments paid for the Sep and Dec 2019 quarters, at no risk of interest or penalties when your 2020 tax return is lodged.
- Businesses can request remittance of interest and penalties applied to tax liabilities incurred after 23 January 2020.
- Businesses can request a low interest payment plan.
- Employers still need to meet their SG obligations. The ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late/unpaid.
5. Enduring Power of Attorney (EPOA) + Will: Create or Update these Now
If you have to self-quarantine or if you incapacitated in any way, you need to have an EPOA in place so your business can continue to operate.
Ensure your EPOA and Will are up to date now and ensure your family and your Accountant know where the original signed documents are.
We can assist you to quickly and professionally have these documents prepared and signed this week if required.
6. Consider your Farm Succession Plan
It's also worth considering whether you have a Farm Succession Plan in place. The impact of Covid-19 has undoubtedly sparked uncertainty in many of us, both in relation to our families' future and the stability of the family business.
Succession planning is about paving the yellow brick road for the next generation into the family farm business. It doesn’t mean transferring assets now, rather, it’s about starting to plan the farm business for the future you can plan for your retirement funding and consider what your future may entail. It also provides an important blueprint for the younger generation, giving them a sense of direction and security in their farming future. This is an important time to be able to provide that sense of guidance and certainty.
Please contact Gavin on (08) 9071 2173 or at gavin@smithshearer.com.au for assistance with your Farm Succession Plan.
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