Important Updates - July 2020
This newsletter includes a range of information for businesses and individuals, including:
Small business COVID-19 recovery grant is open for applications
Fair Work Commission has announced an increase to minimum wages
COVID-19 Long Service Leave Act Amendment for NSW
ATO reimbursement rate increased to 72 cents per kilometre from 1 July
ATO calculation methods for claiming home office expenses
What records you need to keep for the ATO and how you can utilise the myDeductions app
What options you have and how to get help if you're struggling to pay your bills or fines
Important considerations before withdrawing your super early
Small business COVID-19 recovery grant applications are OPEN.
If your small business or not-for-profit organisation has experienced a decline in turnover as a result of COVID-19, you may be eligible for a small business recovery grant of between $500 and $3000.
This grant helps small businesses meet the costs of safely reopening or up-scaling operations.
Keep reading.
Increase to minimum wages & awards.
The Fair Work Commission has announced a 1.75% increase to minimum wages.
This increase will apply to all award wages. This will come into effect on 3 different dates for different groups of awards:
Group 1 Awards - from 1 July 2020 (e.g. Frontline Health Care & Social Assistance Workers, Teachers and Child Care, other Essential Services)
Group 2 Awards - from 1 November 2020 (e.g. Construction, Manufacturing, Clerks)
Group 3 Awards - from 1 February 2021 (e.g. Accommodation and Food Services, Arts and Recreation Services, Aviation, Retail, Tourism)
For anyone not covered by an award or an agreement, the new national minimum wage will be $753.80 per week or $19.84 per hour. This applies from the first full pay period starting on or after 1 July 2020.
Amendments to the Long Service Leave Act.
On 24 March 2020, NSW Parliament passed temporary laws which will create greater flexibility for employers and workers to access long service leave in advance during the ongoing COVID-19 crisis.
These laws are effective on and from 25 March 2020.
Employers, managers and employees have all been impacted by these recent events, and there are many questions relating to Long Service Leave entitlements in unusual circumstances.
Keep reading.
ATO kilometre reimbursement rates increased to 72c per kilometre from 1 July 2020. Some awards also increased the km reimbursement rate.
If you are a sole trader or partnership (where at least one partner is an individual) claiming for a car, you can use a set rate for each kilometre travelled for business. You to claim a maximum of 5,000 business kilometres per car, per year, and this set rate considers all vehicle running expenses.
From 1 July 2020, the reimbursement rate has increased from 68c to 72c per kilometre.
Keep reading.
ATO calculation methods for claiming home office expenses.
If you're an employee who works from home, you may be able to claim a deduction for expenses you incur relating to that work. These can be additional running expenses such as electricity, the decline in value of equipment or furniture and phone and internet expenses.
If your home is your principal place of business, you should refer to running your business from home.
There are some expenses you can't claim a deduction for as an employee, such as general household items, children-related expenses and costs that you're reimbursed for or paid by the employer.
Calculating home office expenses
There are three ways of calculating home office expenses depending on your circumstances. The methods are the:
Shortcut method (80 cents) – only available 1 March to 30 June 2020
Fixed rate method (52 cents)
Regardless of the method you choose to use to calculate your expenses for working from home, you will need to have records.
If your circumstances change part way through the income year – for example, your usual pattern of work from home changes – you will need to keep separate records to show this change.
Keep reading.
Records you need to keep for the ATO and how the myDeductions app can help you.
If you claim a deduction, you must have records to show how you calculated your claims. Records are usually a receipt from the supplier of the goods or services. A receipt must show the:
name of the supplier
amount of the expense
nature of the goods or services
date the expense was paid
date of the document.
myDeductions app
Records you keep don't have to be in paper form. myDeductions is a record-keeping tool that makes it easier for you to keep track of your records digitally.
The myDeductions tool allows you to keep your records digitally in one place during the income year, and you can upload your completed records from the myDeductions tool and pre-fill your myTax return. If you use a registered tax agent, you can email your records directly to them.
If you're struggling to pay your bills or fines, there are options to seek help.
With the recent heavy impact of COVID-19 on businesses, the ongoing effect will be felt for a long time and can mean that money is tight for individuals and families.
If you are struggling to pay your bills or fines, there are a couple of options that can potentially help:
If you think you'll have trouble paying your rent, talk to your landlord or real estate agent. Ask about reducing or deferring payments for 30 days until you have a better idea of your income
If you can't pay your electricity, gas, phone or water bill, contact your service provider straight away. They will explain your options, such as an extension to pay, paying in instalments, Centrelink deductions or applying for a utility rebate or voucher.
If you're struggling to pay your home, car or health insurance premiums or excess, contact your insurer straight away. Explain your situation and tell them you would like to apply for financial hardship. Some insurers are also delaying or cancelling their 2020 rate increase. Check with your insurer.
If you can't pay your council rates, contact your council as soon as possible. Ask about your payment options.
If you can't pay parking, speeding or littering fines, it's important to contact your state debt recovery agency straight away and ask about your payment options.
Important considerations before withdrawing your super early.
If you're affected by the COVID-19 pandemic, you may be eligible to access up to $10,000 of your super until 24 September 2020. Your super is your retirement savings. Consider all your options before you apply to access your super.
It's important to remember your super is a long-term investment and poorly considered decisions can be damaging. Before applying for early access to your super, make sure you:
Check you are eligible to access your super early
Know all your financial assistance options
Check your current super balance
Consider impacts on your insurance
Estimate the impact on your retirement savings
Make a plan for the months ahead
Find additional help if you need it - Please contact us for expert advice tailored to your personal situation.
We are here to help.
Please contact us if you have any questions in regards to any of the above information, or are seeking expert and tailored advice.