Perth Tax People

ATO announcement to “new working from home rules”

Please note this new method is effective from 1 March 2020 to 30 June 2020. It will then be reviewed.

The ATO has just announced a relaxation to the normal working from home rules and introduced a new 80 cent per hour fixed rate to cover ALL deductions.

There are now three ways you can choose to calculate your additional running expenses:

• shortcut method ─ claim a rate of 80 cents per work hour for all additional running expenses

• fixed rate method ─ claim all of these:

o a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture,
o the work-related portion of your actual costs of phone and internet expenses, computer consumables, stationery, and
o the work-related portion of the decline in value of a computer, laptop or similar device.

• actual cost method ─ claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

Feel free to speak to Perth Tax People on 1300 751 700 to know further regarding the above mentioned rules.

Commercial leasing principals during COVID-19

The government is introducing a mandatory commercial leasing Code of Conduct (the Code). The Code imposes a set of 13 good faith leasing principles for application to commercial tenancies (retail, office and industrial) between landlords and tenants where the tenant is eligible for the Governments JobKeeper program.

For each tenant receiving the Governments JobKeeper payments, landlords should agree tailored, bespoke and appropriate temporary arrangements, taking into account their unique circumstances on a case-by-case basis.
The six main leasing principles are:

1. Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period).

2. Tenants must remain committed to the terms of their lease.

3. Landlords must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals of up to 100% of the amount ordinarily payable. The rent reductions are based on the decline in tenant’s trade during the COVID-19 pandemic period and a subsequent recovery period. For example, if the tenant’s sales drop 50%, the rent payable needs to fall at least 50%.

4. Rental waivers must constitute no less than 50% of the total rent payable under principle three above.

5. Payment of rental deferrals by the tenant are amortised over the balance of the lease term and a period of no less than 24 months (whichever is longer).

6. Landlords must not draw on a tenant’s security for non-payment of rent.

Where landlords and tenants cannot reach agreement on lease arrangements (as a result of the COVID-19 pandemic), the matter must be referred for binding mediation.

Feel free to call us on 1300 751 700 to know more.

Temporary relief for financially distressed individuals and businesses

On 24th March 2020, the Federal Government’s Coronavirus Economic Response Package Omnibus Act 2020 came into force. This legislation aims to provide temporary relief for financially distressed businesses by lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business.

The changes only apply for the six months from 25th March 2020 to 25th September 2020.

The four main differences are:

1. Changes to statutory demands made by creditors
The minimum amount for which a creditor can make a statutory demand has increased from 21 days to 6 months. Also, the response time for a debtor responding to a statutory demand has increased from 21 days to 6 months.

2. Individual bankruptcy
The minimum debt that allows a creditor to initiate bankruptcy proceedings against an individual debtor has increased from $5,000 to $20,000. Also, an individual now has six months, instead of 21 days, to respond upon receipt of a bankruptcy notice.

3. Protection for director’s liability for trading while insolvent
Directors have temporary relief from any personal liability for trading while insolvent.

4. Treasurer’s temporary flexibility to amend the Corporations Act

Contact Perth Tax People on 1300 751 700 to get more information.

Eligible employers

Employers will be eligible for the subsidy if:

1. Their business has a turnover of less than $1 billion, and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month), or their business has a turnover of $1 billion or more, and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month), and the business is not subject to the Major Bank Levy.

2. The employer must have been in an employment relationship with eligible employees as at 1 March 2020,

3. Confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.

Eligible employees

Eligible employees are employees who:

•Are currently employed by the eligible employer (including those stood down or rehired);
•Were employed by the employer at 1 March 2020;
•Are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);’
•Are at least 16 years of age;
•Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and are not in receipt of a JobKeeper Payment from another employer.

Feel Free to contact Perth Tax People on 1300 751 700 for application of Jobkeeper payments for your business.

The Australian Tax Office (ATO) expects over 3 million Australians to lodge their 2020 tax returns through MyTax for free.

You should do away with an accountant and lodge your own tax return if:

•Your tax situation is simple or unchanged – If you only have one job.
•You’re a numbers kind of person – You enjoy keeping track of all the numbers, paperwork and receipts.
•You don’t own share or property investments.
•You can understand tax laws and are happy to stay up to date (MyTax is easy to use with lots of helpful information. In addition, you can browse the ATO website).