Update 3 May
We are starting to prepare for Tax time and under 'Upcoming dates' we have listed some Important reminders including lodgement dates. There are also some links available for Fringe Benefits Tax and what may be available to you.
Superannuation for Under 18's will now need to be paid from 1 July 2022 due to the $450- per-month threshold for super guarantee being removed.
There are a number of grants available for startups with the NSW Government also offering some insightful links on what your business may qualify for.
We wanted to wish all Mum's a joyous Mother's Day.
The WD Nicholls Team
As previously mentioned in the last 2 monthly articles, interest rates and inflation have been the 2 biggest discussion points. With the interest rate increase in March for the US it was Australia’s turn with the Reserve Bank increasing the cash rate by 0.25% to 0.35% yesterday. The move was largely expected when the March quarter inflation announcement was made a few weeks back. The headline inflation rate (the raw inflation figure ) 5.1% and underlying inflation (one-off seasonal or volatile factors removed to reveal the underlying trend) at 3.7% was higher than anticipated by the Reserve Bank. The Reserve Bank’s target is 2-3% underlying inflation through the cycle. However, it was what was said in the RBA’s statement versus last month that has caused a reasonable move across markets today.
Key points from the announcement were as follows:
The Board agreed now was the right time to start removing stimulus (providing capital through purchasing corporate bonds)
Cash rate lift by 0.25% and flag of more to come
RBA’s balance sheet to reduce significantly over the next couple of years (but no selling of government bonds)
Inflation has picked up faster than expected, largely reflecting global factors
Supply constraints remain a problem and inflation pressures have broadened
A further increase in inflation is expected, but inflation will start to subside as supply-side constraints are resolved
Inflation to settle back down at 3% by mid-2024, with rate rises a key assumption
Wages growth appears too strong and largely forced the RBA’s hand to raise at this meeting
The result of the announcement has caused the Australian Share market to fall (0.50% after the announcement but then rebounded a little after that), Australian dollar rise against US dollar (due to the anticipation of higher than expected rates) and Australian government bond yields rising (yet again).
So we turn our attention to the Big 4 Banks. As of this morning, they have not responded to the announcement on what increase they will pass onto their borrowers.
We are currently of the view that interest rate and bond markets (predictor of rate movements) are being far too aggressive when it comes to their expectations for rate hikes for this year and next. We are of the view there are many other factors that may lower inflation which could result in not as many rate increase that the markets are pricing in. As we continue to receive data throughout this year and next year this will largely dictate the RBA’s rate path from here.
From 1 July 2022, you will need to pay super for your employees who are under 18 years old if they work more than 30 hours for you in a week.
This is because the $450-per-month threshold for super guarantee is being removed.
Employees who are under 18 will be eligible for super if they work more than 30 hours in a week, regardless of how much they’re paid.
Take Lily for example. She is 17 years old and works a 32-hour week once a month at her local hardware store, earning $382 before tax. She also works 6 hours a month as a barista for a cafe down the road.
As Lily works over 30 hours in one week in her job with the hardware store, her hardware employer will need to pay her super from 1 July 2022.
As Lily does not work 30 hours in a week in her job as a barista, she won’t be entitled to super for this work. Likewise, Lily won't be entitled to super for any weeks she works less than 30 hours for the hardware store.
As we move closer to 1 July 2022, check your payroll and accounting systems have been updated so you can correctly calculate your employees' super guarantee payments or speak to one of our team.
The ATO will update their online tools and calculators so they are ready for you on 1 July 2022.
Source and credit: ATO.gov.au
If you’re running a startup, you need to understand your financing options. In NSW, there are a number of grants you could be eligible for. These include:
Minimum Viable Product grants: This grant supports promising startups that have not generated any income yet, including for those in the research and development (R&D) phase.
Building Partnerships grants: This NSW business grant helps startups which are generating revenue to scale up by acquiring a key customer or channel to market.
Regional startup grants: If your business is located regionally, you may be eligible for NSW business grants that support innovation in your area.
Western Sydney Investment Attraction Fund grants: Specifically designed to boost the Western Sydney economy, you may be eligible for this grant if your startup is situated here.
To learn more visit the Support For Startups page on the NSW government website.
Source and credit: Business Australia
It's 2022 fringe benefits tax (FBT) time! Here are some things to be aware of to help you lodge:
If you provided additional benefits to your employees during the FBT year in response to COVID-19, such as paying for items that allowed them to work from home, remember that FBT may apply.
If you make a car available to your employees for private use, you may be providing a car fringe benefit. If you’re not sure, there are resources available on the ATO's website to help you decide – including a car fringe benefit video series and webinar.
If you covered your employees' expenses during the FBT year, there is a webinar available to help you work out whether you’re providing an expense payment fringe benefit.
Consider the exemptions and concessions you may be eligible for, which can help to reduce the amount of FBT you pay.
Source and credit: ATO.gov.au
We would like to wish all Mum's a very special day this Sunday.
"This is Motherhood - where all love begins and ends there".
Source and credit: R. Browning
If you wish to arrange a telephone appointment or zoom meeting with one of our team please contact our office either by telephone or email.
Due 15 May
Lodge 2021 tax returns for all entities that did not have to lodge earlier (including all remaining consolidated groups), and are not eligible for the 5 June concession. Due date for companies and super funds to pay if required. Note: Individuals and trusts in this category pay as advised on their notice of assessment.