Weekly Digest – 8 May 2020
We hope that you have had a great week and are ready for the weekend, with (hopefully) the relaxing of a number of restrictions.
This weeks wrap up includes the latest progress on JobKeeper, Cash Flow Boosts, the Future & the Economy, Tax Planning time, and a number of resources to help with navigating your business out of the dire situation we’ve all been in. Of course, our week wouldn’t be complete without finishing with a weekly dose of good news.
No doubt there are still tough times ahead but there are many reasons to be hopeful and we’re here to help you through it all.
The first JobKeeper payments started to flow through to bank accounts this week. Please be aware that we have no visibility of these payments via the ATO portal, so if your JobKeeper application has been lodged by us, and your JobKeeper payment has not credited your bank account within a week, please contact your Mukiwa consultant to follow this up for you.
JobKeeper Monthly Declaration
Businesses accepted into the JobKeeper program are required to make monthly declarations to the ATO. This monthly declaration is to update your current and projected turnover and reconfirm your eligible employees. Businesses need to make these monthly declarations by the 7th of each month, in order to receive JobKeeper payments in relation to the prior month.
Mukiwa have completed a large number of JobKeeper applications for our clients and we will be ensuring these monthly declarations are prepared and lodged with the tax office prior to the monthly deadlines. We will need our JobKeeper clients to authorise us to lodge these returns each month, as well confirming certain details with regards to eligible employees and turnover estimates. We will do this by sending out a monthly form to complete and sign, in a similar manner to the form that was recently sent for the April claim. Your prompt attention to completing these forms will ensure your claim is lodged on time and that your business does not miss out on JobKeeper payments to which you are entitled.
Ask us if you have any questions or if you would like us to assist you with JobKeeper.
Cash Flow Boost payments
Cash Flow Boost credits are being applied to Activity Statement accounts following lodgment of the Activity Statements for March and April. These credits will be continue to be applied in subsequent months up to the quarterly $50,000 limit. For Mukiwa clients, we will notify you as and when these credits are applied as well as providing you with an updated account balance. If the CashBoost credit results in a refund position, then obviously no further action is required and the refund will be paid into the designated business account. However, if there is still a payable balance due, we will advise you of the due date and options available in case you cant meet the respective payment dates.
Businesses Aiming to be Back in July
The government announced their goal to get the “overwhelming majority” of Australian businesses back open in July, in a “COVID-19 safe environment.” State and territory leaders are meeting again today to discuss the steps required to lift restrictions – what this might look like will be made public very shortly.
It is said that cafes, restaurants and retail may be in the first wave of those allowed to reopen. Each state will ease restrictions at its own pace, but all will have the common goal of July. The government issued a reminder that social distancing, hygiene and international travel restrictions will remain indefinitely.
According to the Financial Review:
- 1 million people have lost their jobs in the last 6 weeks
- Another 5 million are receiving the JobKeeper wage subsidy
- $7 billion in emergency cash payments has been accessed by 384,000 businesses
- Treasury data estimates that the current restrictions are costing the economy $4 billion a week.
Clearly, getting people back to work will help restart the economy which is good news for all of us.
Tax Planning for 2020
Yes – it is that time of the year again with the end of financial year (EOFY) approaching quickly. NOW is the perfect time to to discuss with us the actions you can take before 30 June to reduce your tax and grow your wealth. We will be releasing some tax planning guides for businesses and individuals in the coming weeks to assist you along the way.
For 2020, key business priorities are:
- Maximising superannuation contributions without exceeding the relevant caps;
- Taking advantage of the $150k instant asset write-off (cashflows permitting);
- Bringing forward deductible expenses;
- Deferring taxable income; and
- Managing capital gains.
The sooner we get started, the sooner we can help you save tax, with sufficient time to implement tax saving strategies. Existing tax clients can book a tax planning meeting here, or if you want to discuss options for us to help with your tax affairs please contact us today.
It is worth reminding our clients that, whilst the CashBoost credit is non-taxable, JobKeeper payments are including in your taxable income and may result in a tax liability in both the 2020 and 2021 years. Worth bearing in mind if you were initially thinking your business might make a taxable loss.
Time to Revisit your Business Plan
We’re guessing you didn’t factor a global pandemic and national lockdown into your 2020 business plan!
So it’s definitely a good time to revisit your business plan for the next year. We know that this can feel like a big effort and not a priority, especially at times like this. However, it is exactly at times like this that you need to take the time to sit down, consider your goals (both business and personal) and what steps you need to take to get there.
So please get in touch if you’d like to talk about your 2021 business plan.
With little revenue coming in for many, the old adage “cash is king” is more relevant than ever, and financial uncertainty will likely impact everyone, even those who are making good money. Lifehacker offers up reasons on why you might consider a budget, and why you should be sceptical of the great deals that cash-starved retailers may be pushing. For example, saving $20 on something that costs $100 might seem like a great idea, but you still have to spend $80, and perhaps that $80 could be spent on something more important. Keeping that cash in hand might be more valuable than saving money later.
Jirav suggests that making a pivot to your business to capitalise on the new ways people are buying during the pandemic can help keep cash coming in the door. This a US article but the tips are great and still apply to Australian markets.
Our team are here to help with some great tools available to help with your cashflow planning – so get in touch with us to find out more.
Pivot Don’t Pause Your Marketing
It’s a classic business mistake to cut marketing when cash flow is tight. This often means you’re sealing your fate as without new customers, businesses wither and die. This article from HubSpot makes some suggestions on how to refocus your marketing for the new economy we suddenly find ourselves part of.
Is it a Good Time to Hire Staff?
If you’re lucky to have a business in a sector not dramatically affected by the Coronavirus shutdown, it could be the perfect time to hire. This article from the Harvard Business Review outlines the opportunity and steps to seize upon it.
Time for some Good News
Actor John Krasinksi has been running his YouTube segment “Some Good News” for a few weeks now. In a recent episode, astronauts from the International Space Station join in to share some good news, a week before two astronauts returned to earth. You can watch the segment here.
If you have any good news, or success stories that have come about as a result of COVID-19, we would love to hear them.
Here to Help
We’d like to say thank you once again for your continued patience as we deal with a significant increase in enquiries, particularly around JobKeeper. We’re committed to helping you through the head winds that we will no doubt still feel over the next few months. If you have any questions or concerns, don’t hesitate to reach out to us.
From everyone here at Mukiwa – have a great weekend and a very Happy Mothers Day to all the mum’s