As always there are a lot of things to consider for the end of financial year and starting a new financial year so we have put together some tips below to help.

Top tips to help with end of financial year:

• Once you have run your last pay run for the financial year reconcile the payroll liability accounts (wages payables, superannuation payable & PAYG withholding payable) and finalise your Single Touch Payroll. This will make reconciling/preparing your WorkCover, Payroll Tax & Taxable Payments Annual Report (if applicable) easier.
• Review aged debtors & creditors to ensure all amounts being carried forward are recoverable or payable.
• Reconcile all bank, credit card, loan and petty cash accounts.
• Perform a stock take if applicable on 30^th June to ensure correct stock valuation.

Top things to consider for the new financial year:

• Superannuation guarantee rate has now changed to 10.5% and the minimum $450 threshold has been removed (most software programs will automatically make these changes but it is best to check when preparing the first pay run).
• National minimum wage increases as of 1 July 2022 so check to see if staff need rate changed (5.2% if you are not covered by an award and 4.6% if they are covered by an award).
• Keep in mind Single Touch Payroll Phase 2 will need to be implemented when available by the software provider.

If you have any questions or need help with any of the above, please reach out as we are happy to help.

We are aware the ATO has sent correspondence to businesses to remind them they will need to start reporting additional payroll information as part of their STP Phase 2.

STP2 started on 1 January 2022 however MYOB, Xero and other software providers were not able to update their systems in time so applied for a deferral with the ATO.

MYOB and Xero both have a deferral until 31 December 2022 which means businesses using these software’s have until this date to opt into STP2. If you are using another software for your STP reporting then we recommend checking when they will be STP2 ready.

MYOB has now finished their STP2 software so you can opt in at any time, there will be some additional set up as you will need to report further information going forward.

Xero are still working on their software, but they are hoping it will be fully functional in the next couple of months.

If you have any questions or would like some assistance with set up please contact us.

As we approach the end of the financial year it’s a good time to start thinking about what you could do to minimise your tax liability.

What’s new for 2022?

• The concessional cap for superannuation contributions has increased from $25,000 to $27,500 for the 2022 financial year. Don’t forget, to claim the deduction, your super fund will need to have received the contribution prior to 30 June and you will need to provide them with a notice of intent to claim a deduction.
• The ATO has released a Tax Ruling and Taxpayer Alert which outlines their interpretation with regards to key legislative provisions which govern trust distributions amongst family groups. Where this impacts your group, we will be in touch to discuss in more detail.
• The ATO has also released guidelines which outline where the ATO considers the allocation of profits from professional practices to be low, medium, or high risk. Again, if this impacts your business, we will be in touch to consider how we apply these guidelines to your practice.

Tax Planning Tips & Information

• The company tax rate for base rate entity companies for the 2022 financial year is 25%.
• The loss carry-back rules are still available which means eligible companies can claim a refundable tax offset using the new loss carry-back measures when they lodge their 2022 financial year tax returns where tax was payable in the prior year.
• The various SA COVID-19 grants paid throughout 2022 will be non-assessable income if received so please ensure good records are kept to ensure the correct treatment is applied.
• Temporary full expensing for asset purchases is available for the 2022 financial year and importantly is available until 30 June 2023 so if you are considering any capital investment in your business, talk to us to ensure you obtain the full benefit of these provisions.
• Carry-forward unused concessional contributions are available which allow individuals to claim an additional tax deduction if a superannuation contribution is made to use up unused concessional contributions from the 2019, 2020 and 2021 financial years.
• Capital Gains Tax: If you have made a capital gain during the 2022 financial year, you may consider realising a capital loss (if appropriate) on another asset to offset the capital gain.
• Cash flow: Vary PAYG instalments for the June 2022 quarter (if appropriate). This is best done in conjunction with an estimate of your 2022 tax position.
• Home office expenses: You can claim 80 cents per hour for the 2022 financial year where you worked from home. Make sure you have detailed records of the periods you worked from home.
• Ensure that you retain receipts or substantiation for any expenses you would like to claim.
• If you travel over 5,000kms in your motor vehicle for work, consider whether you should maintain a log book or whether you need to complete a new one (to be completed every five years). If you are relying on a log book prepared from a previous year you also need to record the odometer reading as at 30 June.
• Trading stock: Conduct a stocktake at 30 June, write off any obsolete or damaged stock and choose your stock valuation method. You can use cost, market selling value or replacement value, and this can be changed each year. If you are a small business entity and your trading stock value has not moved by more than $5,000 you do not have to do a stocktake.
• Trust minutes/resolution: Discretionary trusts have to resolve where they would like to distribute their income for the 2022 financial year prior to 30 June 2022. We will prepare trustee resolutions for our clients and will send these out ahead of 30 June.
• Superannuation (businesses): Pay your super before 30 June in order to get a tax deduction for the 2022 financial year. Super contributions need to have been received by the superannuation fund by 30 June.
• Prepaid expenses: If your business is a small business entity, you are entitled to a tax deduction where expenses covering a period of up to 12 months are prepaid.
• Bad debts: Review and write off bad debts to ensure a deduction in 2022 financial year.

Can we give you a hand?

If you would like any further detail on the above, or for an estimate of your tax position for the 2022 financial year, please contact your Holman Hodge advisor.

Whilst there has been a lot of publicity surrounding the grants made available by the SA State Government for businesses that have been adversely impacted by the current Covid outbreak, it’s important to remember that there are also payments available, in limited circumstances, to individuals.

There are two payments available to individuals in SA – the Federal Government Pandemic Disaster Leave Payment and the SA COVID-19 Testing (Cluster) Isolation Payment.

It is important to note upfront that the eligibility requirements for these payments are stringently applied and they are continually being tweaked. The below includes as much detail possible based on Government information available on 18 January 2022.

The Pandemic Leave Disaster Payment

The Panic Leave Disaster Payment is overseen by the Federal Government and paid through Services Australia – the eligibility rules around this payment changed on 18 January 2022. This payment is designed to support people who can’t earn an income because they or someone they are caring for has to self-isolate or quarantine due to Covid.

To get the payment the eligibility requirements are as follows:

• You have Covid or you’re a close contact of a person who has Covid
• You care for a child under 16 years who has Covid or is a close contact of a person who has Covid
• You’re caring for someone who has Covid, or you’re caring for someone with disability or a severe medical condition who must self-isolate because they’re a close contact of a person with Covid (you must be living in the same household as the person with a disability or severe medical condition)
• You must be over 17 years of age
• You must be an Australian resident or hold a visa allowing you to work in Australia
• You must live in Australia at the time of your self-isolation, quarantine or caring and still live here at this time of your claim
• You have no sick leave entitlements, including pandemic sick leave, personal leave or leave to care for another person
• You must have lost at least 8 hours or a full day’s work
• You must have liquid assets of less than $10,000 on the first day of the claim period

You will not be eligible for the payment where, during the isolation period, you:

• Received (or will receive) any income or salary from paid work
• Received any income support payments
• Received the COVID-19 Disaster Payment

The payment amount varies and will be paid as follows for each 7-day period of self-isolation or quarantine:

• $450 if you lost at least 8 hours or a full day’s work and less than 20 hours of work
• $750 if you lost 20 hours or more of work

The Services Australia website at www.servicesaustralia.gov.au/pandemic-leave-disaster-payment has all the information required to work out your eligibility.

SA COVID-19 Testing (Cluster) Isolation Payment

This payment is for $300 and is available to South Australians who need to quarantine while awaiting the results of a PCR test and do not have access to any other kind of income support.

To be eligible for the payment, you must have undertaken a PCR test on or after 23 November 2021 and be required to self-isolate pending the results. You must also:

• Have been scheduled to work during this time
• Have no access to paid leave or other income support
• Be an Australian resident or holder of the necessary visa and work permits
• Be aged over 17 years

It is important to note that this payment is not available for people who already received Australian Government income support or for those returning from overseas. Rapid Antigen Test results are not accepted for this payment.

The SA Government website has further information www.covid-19.sa.gov.au/health-community/financial-support-for-individuals

An individual will only be able to receive one payment at a time so it’s important that the eligibility requirement for each payment is carefully considered to determine which payment is the applicable one.

If you have any questions, please contact your Holman Hodge adviser or go here.

Just after Christmas, the State Government announced further health restrictions due the impact of the Omicron variant of Covid.  These rules were specifically introduced for businesses in tourism and hospitality and gyms, and focused mainly on density limits.

On 31 December, the State Government announced financial support packages targeted at businesses in the industries impacted by the restrictions.  They also announced a “business hardship grant” which is available to businesses who aren’t in tourism, hospitality, or a gym but have been significantly impacted by Covid restrictions. Further detail is provided below regarding these grants.

There are also many South Australians contracting Covid which means they may be eligible for the Pandemic Leave Disaster Payment which is a Federal Government payment made available to people who are unable to work due to having the virus or having to care for someone with the virus.

There are a number of eligibility criteria for both the business and individual payments.

Support for South Australian businesses

Tourism, hospitality, and gyms

An automatic payment was made to businesses in these industries where they received the previous COVID-19 Tourism and Hospitality Support Grant and gym operators that received Additional COVID-19 Business Support grant.  The amount of the payment made was dependent upon a number of factors but includes:

• $3,000 for an employing business or $1,000 for a non-employing business
• An additional $1,000 for businesses located in the CBD
• An additional $7,000 for tourism and hospitality businesses with turnover above $2 million

These payments were made automatically so if you believe you should have received this payment and haven’t, please let us know.

A second grant for operators in these industries is available where the business can show a 30% downturn in turnover when comparing the turnover for the two weeks from 27 December 2021 to 9 January 2022 to a comparable two-week period (generally the same two-week period in 2019 – 2020).  Where the business can show this drop in turnover, they will receive a second grant at the same value as the automatic grant payment referred to above.

This grant must be applied for via the portal on the SA Treasury website (link below).

If a business did not receive the automatic payment, they can still apply for the second grant if they can demonstrate a 30% decrease in turnover.  Businesses have until 31 March 2022 to apply for this grant.

Business hardship grant

Businesses that are not eligible for the tourism, hospitality and gym grants may still be eligible for the business hardship grant where they can show a 50% downturn in turnover when comparing the turnover for the two weeks from 27 December 2021 to 9 January 2022 to a comparable two-week period (generally the same two-week period in 2019 – 2020).

Eligible businesses will receive $6,000 where they employ staff or $2,000 where they do not employ staff.  This grant must be applied for via the portal on the SA Treasury website.

Other financial support

The State Government has also announced other, very specific, financial relief including:

• Major Events Support Grant – this is only payable to operators of major one-off events that were impacted by the restrictions
• Payroll tax relief – tourism, hospitality, gyms, and other eligible businesses that have been impacted by trading restrictions may apply for a payroll tax deferral
• Liquor licence fee relief – the State Government has provided a waiver of annual liquor licensing fees for 2020-21 for a number of categories

If you believe any of these are relevant to your business, please contact us or refer to the link below for further information.

Important eligibility requirements

To be eligible for the grants, businesses must:

• Be registered for GST
• Be located/operating within SA
• Have a valid ABN
• Have Australia-wide grouped payroll of less than $10 million in the 2019-20 or 2020-21 financial year

Please go here for further information from SA Government Treasury.

Pandemic Leave Disaster Payment for individuals

The Panic Leave Disaster Payment is overseen by the Federal Government and paid through Services Australia.  This is payable to people who are required to isolate due to a positive PCR or RAT Covid test however, where the result of a RAT is being used, the result must be registered with the relevant health authority to be eligible for the payment. It is also available in some circumstances to carers and people who are close contacts and have been directed to isolate.

There are a number of eligibility requirements to be met to be entitled to this payment.

To determine whether you are eligible for this payment, please go here to work through the criteria for South Australians.

If you have any questions in relation to the above, please contact your Holman Hodge adviser.