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OUR SERVICES

Accounting & tax compliance

Is accounting and compliance taking you away from your focus?

Business tax consulting service

Are you sure your business structure is correct? Don't risk it!

Business benchmarking

How do you measure up against other businesses?

Business exit planning

Do you know when you will be exiting your business?

Business acquisitions and sales

Are you acquiring or selling your business?

Business growth consulting services

We can help you grow your business like many others to achieve your goals.

Financial management and external CFO Services

We are an extension of your business for advice.

Self Managed Superannuation Fund Compliance

Are you staying compliant with all the SMSF laws?

CHECKLISTS

Download our handy checklists using the buttons below

Business

Our checklist ensures you have everything you need to prepare your business tax return.

Home Office

If your perform some of your work from your home office, you may be able to claim a deduction for the cost you incur in running your home office, even if the room is not set aside solely for work-related purposes.

Individual Tax Return

To maximise your deductions and ensure that your tax return is complete, please review the following items and advise your Accountant if any apply to you.

Business

Our checklist ensures you have everything you need to prepare your business tax return.

Home Office

If your perform some of your work from your home office, you may be able to claim a deduction for the cost you incur in running your home office, even if the room is not set aside solely for work-related purposes.

Individual Tax Return

To maximise your deductions and ensure that your tax return is complete, please review the following items and advise your Accountant if any apply to you.

ABOUT US - THE TEAM

Company History

Zentveld & Lewis was originally founded in 1983 by Barry Lewis with a vision of providing better service through creating stronger relationships. The practice has achieved continual growth as we continue to develop and strengthen the businesses of our clients.

We provide specialist services to our broad client base. We draw upon our knowledge and experience to give you the best advice and service. At Zentveld & Lewis, it’s not just about providing an exceptional service, it’s about providing clients with information you require to make informed decisions about your business and financial affairs.

The business environment has changed. Technology is driving this rapid change….are you equipped? Don’t make the mistake of doing nothing. Talk to us, so you are not left behind in your industry. We want to see your business exceed, not just survive.

Our Mission & Values

Our mission is to build strong client relationships whereby we provide tailored services aimed at providing clients with the best opportunity to maximise their financial position and lifestyle balance. Our commitment to excellence is underpinned by the three core values.

Customer Service & Relationships

We take the time to listen to our clients to ensure we are focused on their needs. We are pro-active in maintaining our clients trust and work diligently to provide new ideas to meet their goals. We do all our accounting and taxation services in-house. We do not out source our accounting or taxation services overseas to Manila or India. Our accountants work in our office at Holland Park.

Quality Advice

We pride ourselves on maintaining a high standard of industry knowledge to ensure we maintain the highest professional standards and competence through effective training and feedback.

Our initial consultation is complimentary.

Exceeding Our Clients Expectations

Our satisfaction is from knowing we have performed exceptionally to help our clients reach their goals and lifestyle balance.

Peter Zentveld - Zentveld and Lewis

Peter Zentveld - Principal

Peter has worked in public practice since 1995 and is a qualified Chartered Accountant and Registered Tax Agent.

Nicole Zentveld - Zentveld and Lewis

Nicole Zentveld - Senior Associate

Nicole has been in public practice since 1994 and is a qualified Chartered Accountant.

Sisi Wu - Zentfeld and Lewis

Sisi Wu - Senior Accountant

Sisi is focused on providing timely and detailed advice to small business owners concerning their taxation and SMSF compliance needs.

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Zentveld & Lewis
Chartered Accountants

23 Smith Street
Holland Park, QLD 4121

Zentveld Lewis Chartered Accountants
Zentveld & Lewis © All rights Reserved
Liability limited by a scheme approved under Professional Standards Legislation

Accounting and tax compliance

Our Services

  • Tax compliance including FBT, GST, CGT & income tax
  • Income tax strategies and tax returns
  • SMSF administration and compliance
  • Preparation of year end financial statements and periodic management accounts
  • Cash flow monitoring and management
  • Structure review and establishment

Accounting and tax compliance

Do you feel you are spending too much time on accounting compliance instead of growing your business?

We specialise in knowing exactly what needs to be done to meet your regulatory and statutory needs. Let us fix this so you can work on your business growth. 

Understanding your business and how it is trending with other industry benchmarks is key. Are you expanding too quickly without sufficient working capital. 

Avoid penalties. The tax and accounting laws are very complex and rapidly changing. We have the expertise to handle these situations and keep your business safe.

Our initial consultation is complimentary.

Business tax consulting service

Our Services

  • Tax planning and structuring strategies
  • Asset protection
  • Retirement & estate planning
  • Managing capital gains tax
  • GST advice

Business tax consulting service

Being in the wrong tax structure can cost you money and assets. As a business owner, growing the business has been your priority. However, some important decisions do not get made that could impact on your wealth. 

Come and talk to us about asset protection and minimising your risk and exposure.

Business benchmarking

Our Services

  • Industry benchmarking
  • Financial strategies to drive performance
  • Financial business assessments

Business benchmarking

We can help you understand how your business is performing compared with other businesses in your industry. 

There are many financial drivers at play. We can help address key areas of concern and identify the best strategies to increase profitability.

Business exit planning

Our Services

  • Business exit planning
  • Preparing a business for sale
  • Tax advice
  • Structuring a sale
  • Succession planning

Business exit planning

Do you know what your exit plan is? Will the next generation continue with this legacy? 

Whether this exit is soon or many years from now, planning is necessary to achieving the best outcome for all. It will minimise stress and keep you focused on the end goal in achieving financial success and lifestyle balance. 

Business acquisitions and sales

Our Services

  • Due diligen
  • Benchmarking against best practice
  • Structuring advice
  • Exploring purchasing options
  •  

Business acquisitions and sales

It is important to understand the process involved to acquire or sell your business and what you can do to increase the value and opportunities of success.

We will give you a clear perspective on areas of concern, as well as strategies to address these areas.

Business growth consulting service

Our Services

  • Cash flow analysis
  • Strategic planning and support in funding growth
  • Business assessment and key financial indicators
  • Growth through acquisition
  • Avoid growing too quickly
  •  

Business growth consulting service

Knowing when to build your business is critically important depending on where it is in the business lifecycle. Avoiding the pitfalls and capitalising of emerging markets is key to building sustainable businesses.

Many businesses will need external funding at some point to grow. We can help you determine your current capital needs, future needs and what the most appropriate way is to source it?

Financial management & external CFO services

Our Services

  • Cash flow management
  • Management accounting
  • Budgeting, forecasting and reporting
  • Improving business processes and internal controls
  •  

Financial management & external CFO services

We can strengthen your business and financial leadership with setting effective business strategies. We are here to guide you through complex decisions as they develop.

We can help your business on complex matters as and when they arrive. Many businesses enjoy this service as a cost effective alternative to hiring a full-time General Manager.

Self Managed Superannuation Fund compliance

Our Services

  • Technical advice on superannuation matters
  • Preparation of annual financial statements
  • Completion and lodgement of annual tax return
  • Audit arrangement of your SMSF
  • Management of compliance obligations

Self Managed Superannuation Fund compliance

Having a SMSF can have its challenges. We are here to step you through the process to ensure the trustees of the fund understand their obligations and all the requirements and legislation are complied with.

You can be confident that we are here to listen and help you as we appreciate SMSF is a daunting subject for many and we know how vital it is that you have a point of contact to assist you and answer your queries.

Peter Zentveld

Peter Zentveld - Zentveld and Lewis
Peter
Zentveld

Principal
P: (07) 3394 4992

Peter works with a diverse range of clients including small and medium business operators. 

Peter has considerable experience in all aspects of taxation, business management, structuring and succession planning. He works closely with clients to create strategic plans aimed at improving the financial health of their businesses. 

Peter has a special interest in property developments and construction. He understands the taxation implications from working on commercial and residential projects and offers sound commercial and practical solutions. 

Areas of expertise

  • Business & Personal Taxation
  • Business Taxation – Small and Medium Business
  • Business Consulting Service
  • Management Accounting
  • Tax Planning and Structure Advice
  • Business Acquisitions & Sales
  • Outsourced Financial Controller (FC)
  • Property Development & Construction
  • SMSF compliance

Qualifications & Memberships

  • Bachelor of Commerce
  • Member of Chartered Accountants Australia and New Zealand
  • Tax Agents Licence
  • Practice Certificate

Nicole Zentveld

Nicole Zentveld - Zentveld and Lewis
Nicole Zentveld

Senior Associate
P: (07) 3394 4992

Nicole manages the taxation and compliance needs of all our SMSF clients and personally manages some of our Small Medium Enterprise clients. 

She brings a wealth of knowledge and practical experience gained from previously working as an Insolvency specialist. Nicole understands where businesses collapse and can assist in turning those cash strapped enterprises into profitable businesses. Nicole’s knowledge and expertise of compliance needs combined with her outstanding interpersonal and communication skills allows her to provide expert advice while also identifying potential areas of additional need for clients. 

Nicole also spends a considerable amount of time in managing the strategic direction of the firm. Nicole is a keen advocate for new technologies and Artificial Intelligence that is driving change in many industries. She is passionate about ‘Embracing Effective Change’ otherwise ‘Risk Being Forgotten’. 

Areas of expertise

  • SMSF compliance
  • Business & Personal Taxation
  • Business Consulting Service
  • Tax & Succession Planning
  • Management Accounting
  • Outsourced Financial Controller

Qualifications & Memberships

  • Bachelor of Commerce
  • Member of Chartered Accountants Australia and New Zealand

Sisi Wu

Sisi Wu - Zentfeld and Lewis
Sisi
Wu

Senior Accountant
P: (07) 3394 4992

Sisi is focused on providing timely and detailed advice to small business owners concerning their taxation and SMSF compliance needs. She is able to provide value adding advice and one on one assistance to clients regarding cloud and computerised accounting, proving to be a real time saver for business owners. 

Areas of expertise

  • Business & Personal Taxation
  • SMSF compliance
  • Computerised Accounting & Training
  • Management Accounting

Qualifications & Memberships

  • Bachelor of Commerce
  • Member of Chartered Accountants Australia and New Zealand
  • Xero Advisor

COVID-19 Income Support for Individuals

COVID-19 Income Support for Individuals

Income Support for Individuals

The Government is providing support for individuals to assist them during the next six months.

INCREASED AND ACCELERATED INCOME SUPPORT

Summary

The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.

Eligibility

Payment categories

The income support payment categories eligible to receive the Coronavirus supplement are:

  • Jobseeker Payment1 (and all payments progressively transitioning to JobSeeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
  • Youth Allowance
  • Parenting Payment (Partnered and Single)
  • Austudy
  • ABSTUDY (Living Allowance)
  • Farm Household Allowance
  • Special Benefit recipients

Anyone who is eligible for the Coronavirus supplement will receive the full rate of the supplement of $550 per fortnight.

Expanded access

For the period of the Coronavirus supplement, there will be expanded access to the income support payments listed above.

• Expanded access: Jobseeker Payment and Youth Allowance Jobseeker criteria will provide payment access for permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests as a result of the economic downturn due to the Coronavirus. This could also include a person required to care for someone who is affected by the Coronavirus.

• Reduced means testing: Asset testing for JobSeeker Payment, Youth Allowance and Parenting Payment will be waived for the period of the Coronavirus supplement. Income testing will still apply to the person’s other payments, consistent with current arrangements.

• Reduced waiting times:

–  The one-week Ordinary Waiting Period has already been waived.

To further accelerate access to payments, the Liquid Asset test Waiting Period (LAWP) and the Seasonal Work Preclusion Period (SWPP) will also be waived for recipients eligible for the Coronavirus supplement.

–              People currently serving a LAWP will no longer need to serve that waiting period.

–              The Newly Arrived Residents Waiting Period (NARWP) will be temporarily waived for recipients eligible for the Coronavirus supplement. When the Coronavirus supplement ceases, those people that were serving a NARWP will continue to serve the remainder of their waiting period, though the time the person was receiving the Coronavirus supplement will count towards their NARWP. Residency requirements still apply.

–           All income testing, Income Maintenance Periods and Compensation Preclusion Periods will continue to apply.

People will not be permitted to access, and will need to declare that they are not accessing, employer entitlements (such as annual leave and/or sick leave)or Income Protection Insurance, at the same time as receiving Jobseeker Payment and Youth Allowance Jobseeker under these arrangements.

From 20 March 2020, Sickness Allowance was closed to new entrants and was replaced by the JobSeeker Payment. This does not mean that people who previously may have been eligible for Sickness Allowance are now unable to access income support. JobSeeker Payment better accommodates individual circumstances, including assisting people who are sick or bereaved.

Faster claim process

Accelerated claim process: To ensure timely access to payments, new applicants are encouraged to claim online. If applicants do not have internet access, they can claim over the phone.

•           From April 2020, Services Australia will allow new applicants to call to verify their identity to reduce the need to visit a Services Australia office.

•           To claim online, people who do not already deal with Services Australia will need to setup their myGov account, call to verify their identity, and get a link to their Centrelink online account.

•           Applicants for Jobseeker Payment and Youth Allowance Jobseeker will:

–           Make an initial declaration about their identity, residency status, income and that they have been made redundant, or had their hours reduced (including to zero) as a result of the Coronavirus.

–           In the case of sole trader sand the self-employed, applicants will make a declaration that their business has been suspended or had turnover reduced significantly.

•           Applicants may also declare the amount of rent they pay in this declaration to qualify for Rent Assistance.

•           Services Australia has effective measures in place to detect those seeking to defraud the social security system. Anyone fraudulently claiming a payment will need to pay the money back and may face legal action.

Streamlined application process: A number of simplified arrangements will be put in place to make it easier to claim, including removing the requirements for:

•           Employment Separation Certificates, proof of rental arrangements and verification of relationship status;

•           JobSeeker Classification Instrument assessment for those people who have recently left jobs, recognising they are job ready; and

•           Jobseekers to make an appointment with an employment service provider before they can be paid.

Flexible jobseeking arrangements

Those receiving Jobseeker Payment have an obligation to actively look for work or build their skills, but the Government is making sure this can be done flexibly and safely.

•           Jobseekers who have caring responsibilities, or who need to self-isolate, are able to seek an exemption from their mutual  obligation requirements without the need for medical evidence.

•           Activities can be rescheduled if the jobseeker is unable to attend as a result of the Coronavirus. Job Plans will be adjusted to a default requirement of four job searches a month (or one a week).

Mutual obligations can be tailored for each individual to suit not only their needs but also the needs of the community. In some circumstances, jobseekers can undertake training or volunteer within their community to meet their mutual obligation requirements.

Sole traders that become eligible for the Jobseeker Payment will automatically meet their mutual obligation requirements during this period by continuing to develop and sustain their business.

Jobseekers are encouraged to stay job ready, connected to their employment services provider and up to date on potential job opportunities in their local area.

These changes ensure that jobseekers can reliably access income support, safely look for work, fill critical vacancies as they emerge, develop their skills and job preparedness, contribute to their community and help the economy to bounce back stronger.

Timing

The coronavirus supplement will commence from 27 April 2020.

Expanded access for payments and faster claims processing will commence from 25 March 2020.

FOR MORE INFORMATION

For more information on the Australian Government’s Economic Response to the Coronavirus visit treasury.gov.au/coronavirus.

Businesses can visit business.gov.au to find out more about how the Economic Response complements the range of support available to small and medium businesses.

**This advice constitutes general advice only**

Last Updated 29/3/2020

Entertaining, Meals and FBT

Entertaining, Meals and FBT

ENTERTAINING,

MEALS AND FBT

TIPS & TRAPS

An everyday occurrence across the business landscape in Australia is the practice of taking both existing and potential clients out for a meal to cement the business relationship, with the cost of this meal often covered by one party.

Equally, business owners commonly reward by taking high performing employees out for lunch and covering the cost.

ARE THE COSTS OF THESE MEALS TAX DEDUCTIBLE?

After all, it was a genuine business expense surely, I can claim back the GST and claim a tax deduction?

The case outlined above is a clear example of “Meal Entertainment”. Unless the business owner wants to pay the appropriate amount of fringe benefits tax (FBT) no deduction is allowed and the GST cannot be claimed.

The provision of meal entertainment is defined as:

  • providing entertainment by way of food or drink
  • providing accommodation or travel related to, or to facilitate the provision of, such entertainment
  • paying or reimbursing expenses incurred by the employee for the above.

Considering this, some of the more common practices that are included as meal entertainment would be:

  • taking your employees out for coffee or lunch
  • meeting with clients at a café or restaurant for a meal or drink
  • social functions, such as Christmas parties, where food or drink is supplied

CONSEQUENCES

If there are no exemptions available, the FBT consequences of providing meal entertainment expenses are, by example using the 2018/19 FBT rates:

DETAIL

AMOUNT

Cost of XMAS party (incl. GST)

1,500.00

Gross up rate*

2.0802

Taxable value of event

3,120.30

FBT Rate

47%

FBT Expense

1,466.54

*all fringe benefits are subject to a gross up rate.

Where FBT is paid the cost of the meal entertainment benefit (in this case the Xmas party) is deductible and the GST can be claimed on your next BAS.

As you can see from the example above, even considering that the event is now tax deductible, the FBT cost associated with providing the meal entertainment benefit is more than the cost of the party. Obviously, we want to avoid paying the FBT where possible.

EXEMPTIONS

The two most common exemptions available that eliminate the FBT liability are outlined below:

MINOR AND INFREQUENT

There are some exemptions allowed that will reduce the taxable value of meal entertainment benefits to Nil.  However, where this is the case, no tax deduction can be claimed, and neither can the GST.

The most common exemption is the minor and infrequent exemption which states:

  • The cost of the benefit is less than $300 (per person)
  • The benefit is not provided frequently

Both conditions above must be satisfied for the meal entertainment benefit to be exempt. For example, taking an employee out to lunch to reward high performance would be exempt as it would be an infrequent occurrence and the cost would be less than $300.

Alternatively, if taking your employees out to lunch is a regular weekly occurrence for which the employer covers the cost, this no longer satisfies the infrequent condition above and the benefits are subject to FBT, even though the cost is less than $300 per person.

IN HOUSE MEALS

Simple meals (e.g. sandwiches and juice) provided to your employees within your office to enjoy at lunch are not subject to FBT and are deductible.

Be cautious though if meals become more complex, such as including alcohol or multiple courses, as these may alter the characteristic of the benefit being provided and the tax deduction may be lost.

In conclusion, the provision of meal entertainment benefits can be a taxation minefield. We strongly suggest that if you have questions regarding your business practices and how you reward your employees please contact Peter Zentveld at Zentveld & Lewis today.

Zentveld & Lewis Chartered Accountants

a 23 Smith Street, Holland Park Qld 4121
p 07 3394 – 4992 e admin@zentveldlewis.com.au

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances. © 2019 Zentveld & Lewis | Last Updated 28 March 2019

JobKeeper Payments

JobKeeper Payments

CORONAVIRUS (COVID – 19)

Urgent Update: NEW Government JobKeeper Payments

On 30 March 2020 the Federal Government announced the $130 billion JobKeeper payment.

Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees.

The JobKeeper payment will be administered by the ATO, and will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses over $1bn).

Affected employers will be able to claim a fortnightly subsidy payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. This full amount of $1,500 must then be paid to all eligible employees, whether they are full time, part time or casuals.

The first payments will be made from the ATO on 1 May 2020.

The business will continue to receive the subsidy payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the business.

ELIGIBILITY – EMPLOYERS

Employers will be eligible for the subsidy if 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). There are a few other requirements for larger businesses.

The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments. Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.

Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.

ELIGIBILITY – EMPLOYEES

Employees eligible for JobKeeper payments are those who:

  • Were employed by the relevant employer at 1 March 2020;
  • Are currently employed by the employer (including those who have been stood down or re-hired);
  • Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March);
  • Are at least 16 years of age;
  • Are an Australian citizen, hold a permanent visa, are 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.

APPLICATION PROCESS

Businesses, both with employees and without employees (sole traders) can register their interest in applying for the JobKeeper payment with the ATO at https://www.ato.gov.au/Job-keeper-payment/

At a later date, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.

Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.

Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment, provide that individual’s Tax File Number and provide a declaration as to recent business activity. People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.

NEXT STEPS

The Legislation hasn’t yet been released. We will keep you informed as we learn more information from the Government and the ATO.

Please note that your business will have to keep paying your employees between now and 1 May 2020 out of your cashflow, and on 1 May 2020 if you are eligible for JobKeeper payments, the ATO will then reimburse you $1,500 per eligible employee per fortnight dated from 30 March 2020.

Contact us TODAY so we can assist you with the registration process, application process and the calculations.

**This advice constitutes general advice only**

Update on Assistance for Business - COVID-19

Action Required: Update on COVID-19 Assistance for your Business

What a week this has been for all of us!

As you would be aware, things have changed significantly around Australia with the recent announcements of enforced closing of some businesses and other restrictions imposed by the Governments to stop the spread of COVID-19.

It is going to be a very tough time for all of us business owners over the next 6 to 12 months and some of us will be affected way more than others, but we want to reassure you that the team at Zentveld & Lewis are here and will be working overtime to ensure we are supporting all of our clients.


The key Government website that you need to be aware of is https://treasury.gov.au/coronavirus.

It contains very useful Fact Sheets and information for business owners and individuals (perfect for your employees).

First of all, please feel free to phone or email us anytime for support. We are here to help you. We will stay in touch with you with regular update emails, and while we’re not doing face to face meetings any more for the time being, our team is always available to have a Zoom Meeting with you, even after business hours if needed.

5 urgent things you need to be aware of:

1. Updated Government Stimulus Package – Our Tax Planning meeting with you this year will be VITAL!
2. Helping your Employees that you have to Stand Down – Fact Sheets for you to use
3. Business Continuity Planning – Immediate MUST DO Actions
4. Get your Will and EPOA updated / set up NOW
5. Our ongoing Support for you as your Accountants and Advisors

1. UPDATED GOVERNMENT STIMULUS PACKAGE – OUR TAX PLANNING MEETING WITH YOU THIS YEAR WILL BE VITAL!

The Australian Government has just updated its economic stimulus package, which now totals $189 billion. The package has been marketed as a measure to provide timely support to affected workers, businesses and the broader community.
 

The updated key tax and stimulus measures include:

Cashflow Assistance for Businesses
 
  • Tax-free payments of up to $100,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) and not for profit organisations based on their PAYG withholding obligations. This is not a cash payment, but it is a credit in the activity statement system equal to 100% of the PAYG amounts withheld from salary and wages paid to employees.
These payments will only be available to active eligible employers established prior to 12 March 2020, and you simply need to have employees for whom you withhold tax on wage payments.
First payment of up to $50,000 – Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Business that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
Second payment of up to $50,000 – To qualify for this additional payment, the business must continue to be active. Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending June 2020 and September 2020. Business that lodge on a monthly basis will be eligible for the credit for the June 2020, July 2020, August 2020 and September 2020 lodgements.
 
If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $10,000 will still be made in the period up June 2020, and a second minimum payment of $10,000 in the period after June 2020 and up to September 2020. These payments will be applied to the first activity statement lodged in each period.
 
  • Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
Business Investment

  • From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.

  • A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.

Temporary Relief for Financially Distressed Businesses

  • These measures are designed to give a safety net for businesses to ensure that when this crisis has passed, they can resume normal business operations. It includes lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business. They include:
o A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
o A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition.
o Temporary relief for directors from any personal liability for trading while insolvent.
 
 
Business Lending Guarantee

  • The Government will provide a guarantee of 50% to Small and Medium Enterprise lenders for new unsecured 3 year loans of up to $250,000 per borrower to be used for working capital. These loans will be up to three years, with an initial 6 month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
  • Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.
  • The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Individual Assistance

  • Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners. These payments will commence to be automatically made from 31 March 2020.
When we have our 2020 Tax Planning meeting with you over the next few weeks, we will assist you with opportunities to restructure how you pay yourself to that you can receive the maximum cashflow assistance amounts from the Government.
 
Contact us if you would like a phone meeting with us earlier to ensure you receive your maximum cashflow assistance from the Government.

2. HELPING YOUR EMPLOYEES THAT YOU HAVE TO STAND DOWN

With the recent requirements that many businesses are to be temporarily closed, you may have to stand down many of your employees from their employment.

The good news is that the Government is providing support for individuals to assist them in the next 6 months.

The Government has expanded the access to the Jobseeker Payment and the Youth Allowance Payment so that the following people affected by the Coronavirus can immediately receive them, commencing 27 April 2020:
  • permanent employees who are stood down or lose their employment
  • sole traders
  • self employed
  • casual workers
Please refer to the fact sheets below for an excellent summary of what individuals are entitles to. We recommend providing these to your employees.

Income support for Individuals 
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf
 
Payments to support households
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

Temporary early release of Superannuation –https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf
 
3. BUSINESS CONTINUITY PLANNING – IMMEDIATE MUST DO ACTIONS

You need to quickly decide whether your business can continue to trade or if it needs to temporarily close or reduce its operations.

We have developed a Cash Flow Forecast template that we are using with our clients so that we can help you to quickly make a decision about what you should do.

We have also developed a Business Continuity Plan that we have just updated with the latest Government announcements.

Contact us to book in a 30 minute Zoom online meeting so we can discuss your business situation and make plans to assist you.
 
4. GET YOUR WILL AND EPOA UPDATED / SET UP NOW

If you have to self-quarantine or are admitted to hospital, if you don’t have an EPOA then no-one else can make important business or financial decisions on your behalf.

As a business owner, it is 100% essential that you have an up to date EPOA and Will, and that your family know where these are stored.

Please let us know if you would like to do this. We can arrange this through our solicitors which offer you a fast, easy and professional way to get these documents prepared quickly.

Simply reply to this email or phone our office on 07 3394 4992 and we will email you our “Will and EPOA Data Capture Form” to get started.
 
5. OUR ONGOING SUPPORT

Since 24 March 2020, our team has been working from their homes.

We want to reassure you that we have 100% capacity to continue helping you and your business.

Please continue to phone our office number 3394 4992 and we will assist you asap. Also, you can always email us for instant support at admin@zentveldlewis.com.au.
 
NEXT STEPS

These are times when we need to stay calm and rely on reliable news sources and information from State and Australian Government websites. What you see on social media may be panicky and unreliable information – stay away from this!

There are still deadlines we will need to meet for you so that you can receive the Government Stimulus Package amounts that you are entitled to.
 
**This flyer constitutes general advice only**
 
Last updated 30 March 2020

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Dealing with tax and renting via Airbnb

Dealing with tax and renting via Airbnb

Airbnb is one of many examples of the “sharing economy” — connecting buyers (users) and sellers (providers) through a facilitator that usually operates an app or a website. Airbnb acts as this facilitator by allowing individuals, referred to as “hosts”, to rent out a room of their house or their whole house for a short-time basis via its online platforms.

While the focus here is on Airbnb, the tax concepts outlined could be applied in a more general sense to anyone seeking to rent out a part of their home, whether through Gumtree, Realestate.com.au, Flatmates.com.au and so on.

The tax issues raised relate to hosts who:

  • own their own home;
  • live in it full time; and
  • want to generate some dollars by putting up an identifiable area of their home for rent.

As a host, the three major tax considerations that you need to be aware of are rental income, rental expenses, and capital gains tax.

Rental income
The main question hosts need to ask themselves here is whether a commercial amount of rent is being charged. Generally, where a room is advertised for rent at market rates to the general public through Airbnb (or a similar online directory, but we’ll use Airbnb as the generic term) the arrangement is likely to be at “arms-length” and hosts would be required to declare their rental income.

Rental expenses
Where the rental arrangement is at “arms-length” and income is declared, hosts would be entitled to tax deductions for expenses incurred in deriving that rental income.

Expenses incurred by hosts can be split into three categories:

  1. Expenses that are directly associated with the rented area – deductible in full.
  2. Expenses that relate to shared areas – apportionment required.
  3. Expenses that relate to the host’s private area only – not deductible.

Depreciation on furniture purchased for use in the rented room is a good example of an expense that is directly associated with the rented area of the host’s home, and would be deductible in full.

Some examples of other expenses that may be deductible in full include:

  • commercial cleaning of a rented area;
  • repairs and maintenance;
  • professional photography for the listing; and
  • host service fees charged by Airbnb.

Where there are expenses that relate to the entire property, apportionment is required. The ATO has indicated that floor space can be used as a general approach for apportioning expenses.

Some examples of expenses that relate to the entire property and may be deducted in this way include:

  • mortgage interest;
  • council rates;
  • utilities; and
  • insurance.

It is important to note that where capital works are undertaken in relation to the property, capital works deductions are generally not available to hosts, as they are also using the property for their own residential accommodation.

Expenses that relate to shared areas can be apportioned based on access. In regard to using floor space as an indicator, if say one tenant and one host had equal access to shared areas, the host could therefore claim for 50% of these expenses.

Examples of expenses that relate to shared areas only, and may be deductible in this way, include:

  • depreciation on furniture and appliances located in shared areas;
  • internet; and
  • cable TV.

One final thing to note in relation to expenses is that they are only deductible where an area of the house is either actually rented out, or genuinely available for rent. For example, where a room in the host’s home is only available for rent for 90 days a year, say while a housemate is away, then only the portion of rental expenses that were incurred during that 90-day period would be deductible and further apportionment may be required.

Capital gains tax
In general terms, the sale of an individual’s primary residence is CGT-free under the main residence exemption if the dwelling was their main residence for the entire time they owned it, and it was not used to produce assessable income.

However as hosts are renting out a portion of their home on Airbnb, they are using a portion of it to produce assessable rental income and therefore would only be only eligible for a partial main residence exemption. This means that hosts may be taxed on a portion of any capital gain realised upon the sale of their main residence.

Remember that “pre-CGT” assets (bought before 20 September 1985) are not subject to CGT, regardless of whether they are used to derive rental income.

Dealing with a post-CGT main residence
The below scenarios assume the following:

  • the host purchased their home post-20 September 1985 (and therefore may be subject to CGT on the sale); and
  • the host would have been eligible for the main residence exemption from the time that they purchased their home until the time that they started renting out a portion of their home.

A basic scenario would be one in which a host rented out the same part of their home from the time that they purchased it until the time that they sold it. In this case, the part of the home used to produce assessable income would be subject to CGT and the private portion of the home would be CGT free under the main residence exemption. As with expenses, an apportionment based on floor space may be used to determine the portion of the property that is subject to CGT.

A more common scenario may be where the host began renting out a part of their home some time after moving in. The calculations under this scenario can differ depending on whether the host first began using their home to produce assessable before or after 7.30pm on 20 August 1996.

The reference “first used to produce assessable income” would generally be the first time a host rented a part of their home out (whether on Airbnb or otherwise). However, if the host had previously used part of their home as a home office or workshop at some time in the past, it may actually be that time that the home was “first used” to produce assessable income.

Pre-20 August 1996 property
Where the host first used their home to produce assessable income prior to 7.30pm on 20 August 1996, they would need to calculate the portion of the ownership period in which they used the entire house for private purposes and the portion in which they were renting part of the house out.

Purchased: 1 July 1991 (used 100% for private purposes)
First rented a portion of house: 1 July 1995 (30% of total floor space apportioned to tenant)
Sold: 1 July 2012
Total days house was owned: 7,671
Total days portion was rented out: 6,210
Gain on sale: $100,000
Calculation: $100,000 x 6,210/7,671 x 30% = $24,286 gross capital gain.

This gross capital gain could then be reduced further by either indexation or the general 50% CGT discount, as the property was held for at least 12 months.

Post-20 August 1996 property
Where the host first used their home to produce assessable income post-20 August 1996, the calculation is slightly different. Firstly, the host is deemed for tax purposes to have acquired the property as at the date that the house was first used to produce assessable income and secondly, a market valuation, calculated at that date, may be required, which is then taken to be their deemed cost base to be used in calculating any future capital gain. This valuation could come from a registered valuer or could be calculated by the host, however it is important to note that the ATO has the power to challenge valuations.

Purchased: 1 July 1991 (used 100% for private purposes)
First rented a portion of house: 1 July 1998 (30% of total floor space attributable to tenant)
Market value @ 1 July 1998: $200,000
Sold: 1 July 2012
Sale price: $500,000
Calculation: ($500,000 – $200,000) x 30% = $90,000 gross capital gain.
This amount may be reduced further by either indexation or the general 50% CGT discount.

These two scenarios are relatively straightforward. Where different portions of the house were available for rent during the host’s ownership period, or where the entire house was rented during some periods and was used 100% for private purposes during other periods, the CGT calculations can become very complex.

Goods and services tax
Income from renting out part of a residential property is typically “input-taxed”. This means that hosts should not charge GST on the rent that they earn from guests. Conversely, hosts cannot claim input tax credits for any rental expenses that they incur, but are entitled to claim the GST inclusive amount of any rental expenses as a tax deduction.

Be aware however that GST may apply if host is taken to provide “commercial residential premises” – which includes, among other things, accommodation that is a hotel, motel, inn, hostel or boarding house. Remember also that being registered for GST is subject to the host exceeding the $75,000 turnover threshold.

PAYG instalments
If hosts report more than $2,000 of rental income on their latest lodged tax return, they may receive a letter from the ATO notifying them that they are required to begin making periodic PAYG instalments. These are essentially prepayments of tax that are offset against the host’s final tax liability at the end of the year upon lodging their tax return.

What types of legal expenses are tax deductible?

What types of legal expenses are tax deductible?

When a legal expense is incurred in relation to the operation of a business to produce assessable income, it is generally allowable as a deduction. Exceptions are when the legal fee is capital, domestic or private in nature, if it is specifically excluded by another section of income tax legislation, or is incurred in earning exempt and non-assessable non-exempt income.

In this regard, for individuals incurring legal fees, the expense incurred would not be deductible unless there is a clear nexus with the expense being incurred in deriving assessable income (for example, for an investment property). In other cases, the expense may be private in nature so a deduction would not be available in any case.

The following types of legal expenses are not deductible under the general deductibility provisions because they are of a capital or private nature. Instead they are made deductible under a specific provision in tax law:

  • the preparation of an income tax return, the disputing of a tax assessment and the obtaining of professional tax advice
  • the preparation of lease documents
  • certain borrowing expenses, and
  • certain mortgage discharge expenses.

Other common legal expenses are considered below.

Business lease expenses
The cost of preparing, registering and stamping a lease is deductible if the taxpayer is using or will use the property for earning assessable income. The lease payments themselves will be deductible under the general deduction rules, and are therefore subject to special prepayment rules.

Valuation expenses
If valuation fees are paid to help decide whether to buy a business, these are generally capital costs and not an allowable deduction. However if the valuation is used to support an application to borrow money for use in the business, those expenses can be claimed as borrowing costs immediately if under $100 or over the life of the loan, or five years from the date of the loan, whichever is shorter.

Fines and breaches of law
Deductions are specifically denied for fines or penalties (however described) that are imposed as a consequence of a breach of any Australian or foreign law. This rule does not apply to administratively imposed penalties such as the general interest charge (which the ATO applies to unpaid tax liabilities) and penalties for underestimating GST instalments. However, while the fines and penalties may be specifically disallowed, the costs incurred in defending an action may be deductible.

Evicting a tenant
A taxpayer may acquire premises (all or a portion of) that were leased to a tenant of the former owner. Any expenses incurred trying to evict the tenant will not be deductible. This expense becomes part of the cost of acquiring the property and a capital expense for income tax purposes. Arguably, the expense could form part of the “cost base” of the property, being expenditure of a capital nature incurred in establishing the taxpayer’s title to, or a right over, the asset. However a private ruling for a particular set of circumstances could be required.

Legal expenses that can be claimed
Circumstances where legal fees are usually deductible include:

  • negotiating current employment contracts (including disputes) in respect of existing employment arrangements
  • defending a wrongful dismissal action bought by former employees or directors
  • defending a defamation action bought against a company board
  • arbitration in settling disputes (depending on the facts)
  • recovering misappropriated funds of the business
  • opposing neighbourhood developments that are likely to adversely affect the taxpayer’s business (depending on the facts of the case)
  • evicting a rent-defaulting tenant
  • recovering wages of an employee as a result of a dishonoured cheque
  • defending a libel action provided the case was directly related to comments in pursuit of the company’s business
  • pursuing claims for workers compensation, and
  • defending the unauthorised use of trademarks (depending on the facts of the case).

Legal expenses that cannot be claimed
Circumstances where legal fees are generally not deductible include:

  • the cost of negotiating employment contracts with a new employer
  • defending driving charges (regardless of whether the transgression occurred while driving on company business)
  • defending charges of sexual harassment or racial vilification that occurred in the workplace
  • eviction of a tenant whose term had expired
  • resisting land resumption, rezoning or disputing the amount of compensation, and
  • disputing redundancy payout or seeking to increase the amount of any redundancy payout.

Disclaimer: The information contained in this article is general in nature and does not constitute advice.