Update 1 September

The Queensland Government is continuing its support of regional small businesses with the delivery of a $5 million regional round of Business Basics Grants. Program guidelines, FAQs and eligibility criteria for the program are now available via the link below. Through the program, eligible regional small businesses will be able to apply for a $5,000 grant to help finance projects to build basic capabilities and upgrade skills. Funded projects could include anything from website upgrades to strategic marketing services to training and coaching. Applications will be competitively assessed and grants will be paid in full and up-front to successful applicants, with no co-contributions required. Also important to note—the program will close when funds are exhausted. A high level of interest is expected and it is recommended that you get prepared in advance by checking eligibility criteria and reviewing the guidelines. You will need to be ready to apply when the program opens at 9:00am on Wednesday 8 September 2021.

Source and credit: Business.qld.gov.au

The federal government’s Your Future, Your Super (YFYS) reforms were introduced along with an increase to the Superannuation Guarantee (SG) rate and the final rollout of the Single Touch Payroll (STP) program.

While these changes are generally positive for workers and will help make the super process more efficient, they’ve also created some new actions for employers.

Let’s look at the changes and what they could mean for your business.

1. Employer super contribution has increased

On 1 July 2021, the compulsory SG rate increased from 9.5% to 10%. This is the first in a series of slated increases that will see the rate rise by 0.5% every year until it reaches 12% by 2025.

What this means to you is dependent on how you package your salaries:

• If you pay a base salary plus super – your employees’ take-home pay will stay the same and their superannuation payments will increase.

• If you pay a package including super – your employees’ take-home pay may need to decrease for you to pay the extra super, or future pay increases might need to be offset.

• For senior employees, you may need to factor in that the concessional contribution cap was also raised from $25,000 per annum to $27,500. This change may mean you should recalculate package arrangements at certain levels.

2. Single Touch Payroll now applies to most businesses

On 1 July 2021, STP came into effect for most businesses, including organisations with 19 or fewer team members and those with closely held employees (e.g. directors of family companies).

STP was first introduced by the government in 2018 to streamline employers’ reporting obligations. Using STP-enabled software, you provide information such as your employees’ salaries, super and tax at the same time as you process your payroll.

If you haven't started reporting through STP, you need to start as soon as possible to avoid penalties that may apply. Visit the ATO website for more information.

3. Annual performance test for your default super fund

Introduced as part of the YFYS reforms, from 1 July 2021 super funds will need to meet an annual performance test. Failing in any year will require the fund to write to members in underperforming investment options advising them to consider moving. If the fund fails two consecutive tests, it won’t be allowed to accept new members until its performance improves.

If your default fund is underperforming, you may want to consider the reputational risks and note that in the second year of underperforming, you won’t be able to provide it as an option for new employees.

4. New employees ‘stapled’ to their existing super funds

Also as part of the YFYS reforms, from 1 November 2021, when a new employee joins your business, if they have not nominated a chosen fund, you’ll need to pay super into their stapled fund. You’ll be able to find out their stapled fund from the ATO.

This initiative is designed to reduce duplicate accounts in the super system, saving people multiple fees. However, it’s important for workers to make sure they’re happy with their fund over time as a lot can change since their first job. Different funds also offer different levels of insurance that might not suit a worker over their entire career.

Source and credit: BusinessAustralia.com

Temporary full expensing supports businesses and encourages investment, as eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year it is first used or installed ready for use for a taxable purpose.

According to the ATO some sole traders have experienced errors when completing the temporary full expensing (TFE) and backing business investment (BBI) sections in their tax returns.

The error occurs when you incorrectly select an item from the TFE opt out drop-down list in your return.

If you are not opting out of TFE or BBI, or claiming a TFE deduction, you can skip all the labels about TFE or BBI in your tax return. No errors will occur, and you can proceed to lodge your tax return.

To claim TFE:

• add your TFE claim to your 'Depreciation expenses'

• complete the ‘Temporary full expensing deductions’ labels to tell the ATO value of the TFE deduction claimed, and

• complete the number of assets you are claiming for.

Only complete the ‘Temporary full expensing deductions’ labels if you are claiming TFE. To opt out of TFE or BBI:

• select the appropriate option at the relevant opt out question

• tell the ATO the number and value of assets you are opting out of TFE or BBI.

You only need to complete the opt out question and details if you are choosing not to apply TFE or BBI to your eligible assets.

To check for TFE eligibility click the link below.

Source and credit: ATO.gov.au

Just a reminder that we are following current restrictions and therefore, once again, we have closed our front door to manage the amount of traffic through the office.

We ask that when you arrive at our office, to call 02 6684 2502 and one of our administration team will meet you to attend to your inquiry.

We ask also that if you have visited any of the current hotspots in NSW in the past 14 days, or if you are feeling unwell to please not come to the office.

Our team is on standby via telephone, email or social links for any enquiries.

For more information on current NSW restrictions and hotspots please click the link below.

• 21 September 2021 August monthly BAS due