July 2021 Business Finance Update
It's great to see some positive news on the jobs and property fronts:
CBD occupancy rates increase
New retirement data released
Unemployment keeps falling
Businesses hunting for new premises
Read more below.
Struggling small businesses have been urged to be proactive at tax time, with reports showing a decline in small business payment plan arrangements over the past three years.
Small business ombudsman Bruce Bilson said if any businesses are struggling to meet their tax obligations, the worst thing they can do is put their head in the sand.
“Small businesses are strongly encouraged to get on the front foot by lodging now and reaching out to the ATO – either online or by phone – for a tailored payment plan, if having difficulties meeting payment obligations,” he said.
“The ATO has told my office it is also introducing a system for payment plans in arrears to give small and family businesses a chance to get back on track rather than falling into default and having to start again.”
Small businesses engaged in a tax dispute are encouraged to contact the ombudsman’s office for help on 1300 650 460 or info@asbfeo.gov.au
Now that the new financial year has started, a series of federal government initiatives have kicked in.
As of 1 July 2021, the tax rate for businesses with turnover below $50 million has decreased from 26% to 25%. For unincorporated small businesses such as sole traders, the tax discount rate has increased from 13% to 16% (up to the existing cap of $1,000).
Large businesses awarded government contracts valued above $4 million must now pay their suppliers with subcontracts of up to $1 million within 20 calendar days, or pay interest.
Under reforms to the Research and Development Tax Incentive, R&D entities with aggregated turnover of less than $20 million are now generally entitled to an R&D tax offset rate equal to their corporate tax rate plus an 18.5% premium.
Meanwhile, automatic mutual recognition of occupational licences has come into effect across NSW, Victoria, the ACT and the Northern Territory. Now, plumbers, builders, architects and other licensed workers can operate across jurisdictions, without having to apply for another state-based certification.
The federal government has released a new online tool to help small business owners hire their first employee.
The Employment Contract Tool guides small business owners through a series of questions to generate an employment contract based on the specific terms and conditions of the relevant award.
You can use it for full-time, part-time and casual employees who are covered by an award.
To use the tool, you'll need to:
Pay your employee an hourly or weekly wage (rather than a salary)
Know the name of the relevant industry award
Know the employee's classification level within the award
The questions will take about 30 minutes to complete. At the end you'll be able to download your employment contract and a letter of offer in a Word document.
Has your business been affected by the latest round of lockdowns? If so, you might be able to get some temporary relief from your lender.
The Australian Banking Association, made up of 22 of the country’s largest banks, including the big four, said they are standing by their home loan customers.
Loan deferrals are potentially available to all small businesses that meet certain criteria, irrespective of geography or industry. To qualify for a loan deferral:
Your business must have a turnover of less than $5 million and loans of less than $3 million
Your loans must be in good standing – either your repayments must be up to date or you must be engaged in a payment program
Other conditions might also apply, depending on your lender and personal situation.
If you need help, speak to your broker today. Banks tend to look more favourably on businesses that approach them while problems are still in their early stages.
Thanks for reading. Get in touch if you need help.
Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any advice provided in this article or on this website.
