Podcast Covid19 Federal Government Support Packages

Hi, welcome to the podcast, podcast my business where we talk about business. And in todays pocast we’re talking about the various government support packages for COVID-19. And hopefully getting some clarity around that. And we’re welcoming Alan Mason from encore accounting.com.au. Good afternoon, Alan.

Good afternoon, Tony.

How you been?

 

Really busy trying to distil all these support message support packages, and all the different ways that they work for different type different types of businesses has been a minefield.

 

Yeah. And then you got clients calling you, especially if probably a few weeks ago panicking. I know. I was panicking a few weeks ago. So that’s got to be fun as well.

 

It is and the clients need to know what what they can access and what’s available to them. The there are a number of measures, there are a number of criteria. And And quite frankly, a lot of the government and a lot of agencies do not know how it’s going to work. It’s a little bit because it’s happened so quickly. Most, if you ring up the tax office, honestly, they don’t know all the answers. If you try to ring up any government department, they know all the answers, probably because they haven’t been worked out. And it was only last Wednesday that the job keeper was legislated. So last Wednesday, it became legislation.

So and it applies from first of April, and people have to be employed from the first of March. So bad luck. If you employed a few people in mid-March, and we’re hoping to get a job keeper, you won’t.

So all these little tricks and all these things that are behind the scenes that make it Important for clients and as an accounting practice 45 years we’ve got to be on top of this and on top of it very, very quickly so that we can then go yes, you need to do this or no you can’t or you will get this extra support. And it does not apply to everybody the support packages only apply in certain situations, for instance, to get a job keeper and it would if you just cut in tony if you want want to

You’re doing very well Allen, keep going.

Thanks. So if you want to get a job keeper means the government doesn’t pay social welfare you as the employer does, and that’s very clever.

So you decide I want to keep some staff on I’m going to pay the 1500 a fortnight. Now.

I don’t know who pays the wages for that thing, but most people do it weekly.

But anyway, that’s 1500 per fortnight or 750 a week. If you’ve got somebody employed at 700 a week Well, 1400 dollars a fortnight, you dont get it.

So you’ve got to increase their wages.

So if you haven’t had a reduction in turnover of 30%. And you might say 30% of what? Well, I’m an accountant, I could make 30% on anything. Just tell me the numbers on make it work. But bottom line is, you don’t get it. If you can’t prove you’ve had a 30% reduction in turnover. And this has been very contentious. Is it turnover for the 12 months ending March is at the 12 months ending April. The tax office have allowed a certain amount of discretion in that and they’re allowing you to calculate based on maybe April month, maybe may month to project forward and get the job keeper and then have it taken off you if you haven’t had a 30% reduction. That’s going to be funny.

 

So there’s a lot of these parts of it that you need to as a business owner, you need to talk to your accountant, your accountants got to be able cross it. And this time of year, most accountants are fairly busy with their lodgements because 15 may 15 june lodgement dates.

 

Fortunately, at encore accounting, we are on top of all of our lodgement. So we’re ahead of everything. So we’ve been able to devote all of our resources into learning, understanding the, these allowances and this three basic ones that apply.

 

But there’s another two that could apply three basic ones that can apply it doesn’t apply in every situation and applies in some situation.

So for instance, if you don’t have staff you dont  get it, you don’t get the stimulus burst.

If you’re a sole trader, you’ll get the 1500 dollars job seeker. If you’re a company and you have directors, as my wife say or other directors, you only get it for one director. So the devil is in the detail. The devil is here calculating what you can and cannot get there. Making sure that if you’re going to get help to keep your business going, that if you can make any small changes has to be legal. But make any small, say, variations to comply.

As I said before, if you paid someone, say $1,000 a week you need to pay 1500. And that’s allowed. If you were not registered for PAYG. On the 12th of March, maybe you need to backdate your registration, providing you have actually been paying wages.

So there’s a lot of detail and finer points that business owners need to get right to make sure they claim and remember

Tony, we’re talking about survival. We’re talking about survival of the business.

And in life.

One of the I’ve written three books, and one of my books was how to survive in business.

We spend 61% of our awake time in our business.

And if our business is less than optimal, if our business is in trouble, can’t pay the wages, we can’t pay the rent. If things are pretty miserable, our life is less than optimal.

So, we ourselves, we owe it to our family and we it to the community to be successful.

So these things are important, and the government recognizes that small business employs something like 80% of the workforce. Small Business goes falls on sword. As Australia we’ve got we’ve got a problem and as our economy

Just jumping quickly, because we don’t have a lot of time and I, we could probably spend an hour talking about this.

But tax free payments up to $100,000. for employees, that’s something else as well. I know lots of small businesses with sole traders and alike. And I remember reading somewhere that a sole trader, according to the ATO is, you pay yourself you’re not an employee, but you’re still paying peer PAYG and GST is to say you are a business.

And the rules around that for the tax free payments is as murky as all the others.

What’s your advice in relation to that

 

A sole trader can get the 1500 dollar job keeper that’s been a carve out that’s been put in there. Because of all the press and because of all of the publicity around the fact that sole traders generally don’t have access.

As far as the tax free payments go, you have to be an employer.

And if you’re a sole trader, you are not employing yourself.

Because the concept of mutuality, which which is how clubs work neutrality means that you can’t employ yourself which is Because you’re the, you’re the business as a sole trader.

So the answer is no, you do not get the hundred thousand dollar tax free payment.

It’s only for employers, and it’s only based on PAYG deducted. So it may not even be 100,000. If you have salaries of 100,000 a year and you’re deducting maybe 30,000 a year as PAYG tax, when salaries for staff we are talking, you would only get 30,000.

So you wont get 100 you have to be a larger employer and employ a lot more people to get the hundred thousand dollar stimulus package. So that tax free part as there are a lot of aspects of this some the support the government’s giving, it doesn’t apply to everybody.

Not all the parts apply to everybody. So there’s some parts that do.

For instance, loans you can get from the Queensland Government or from the from your bank queensland government loan is interest free 250,000 for the first year interest free that was repaid over the next 10 years.

So, there are many aspects of the stimulus package that may or may not apply to you and you need to look at it.

If anyone needs a copy, they can send me an email or email copy of the outline we’ve put together. outline is 57 pages, 57 pages, and it’s the details right? In good detail, right? It’s worth it’s worth $100,000 to tax free. You want to get the detail right.

 

Yeah exactly. And I’ve got that here the COVID-19 stimulus and support measures. So if people would just get in touch with you via your phone number, 07 3257 7777 or email allan@encoreaccounting.com.au

 

Fantastic, okay, we can get, like I say, I know it’s only a very, very short period of time. But I guess you’re busy. I’m trying to stay busy. And at least we get some information now, thanks for that information about the sole trader because I thought that we could get it and because you’re still paying big and all sorts of fun things. Nothing is clear. All right. All right. Thanks for your time, Alan. Okay, thank you, Tony.