Weekly Digest – 8 April 2020
The word “uncertain” has been thrown around a lot during the COVID-19 pandemic – and that’s because almost everything around it has been. We hope you’re going well and managing to get some time away from your business during these crazy times. Here’s a recap of what’s happened this week.
Rental waivers and deferrals for some commercial tenants
Prime Minister Scott Morrison announced some new measures for landlords and tenants yesterday (Tuesday 7th April). The new mandatory code will apply to tenancies where the tenant or landlord is eligible for the JobKeeper program, which means those that are in financial distress. This code was described to include “good-faith principles” where landlords must not terminate the lease or draw on a tenant’s security and likewise, tenants must honour their lease.
The PM reinforced the point that landlords and tenants should “sit down and work it out.”
- Landlords will have to reduce leases for businesses affected by Coronavirus.
- The reduction will have to be in proportion to the reduction in the tenant’s business.
- Waivers of rent must account for at least 50% of the reduction businesses
- Deferrals refers to rental payments that need to be paid, but can be put off.
- Deferrals can be spread over the remaining time on a lease for no less than 24 months.
- That means if a tenant had 3 months left on a lease, they would still have at least a year to make any deferred rent payments.
- The PM said landlords that don’t engage with their tenant to work a rent arrangement out would be “forfeiting their rights”.
It’s clear the PM wants landlords and tenants to work together.
Last week the government announced the JobKeeper payment. This is a wage subsidy aimed at helping employers keep paying their employees. Millions of workers across Australia will receive a fortnightly payment of $1500 through their employer. The goal is to help businesses start up quickly once this crisis is over.
There are more details and eligibility requirements of course. Please get in touch with us if you have any questions.
- Employers must apply online, provide information to the ATO on all eligible employees and ensure that those employees receive at least $1500 per fortnight (before tax).
- There is a maximum period of 6 months, from 30 March 2020.
- Businesses (including not for profits) must prove their business turnover is estimated to fall by 30% or more.
- Self-employed individuals will be eligible to receive the JobKeeper payment if they meet the same criteria.
More information can be found here:
Please don’t hesitate to reach out to us to chat about this.
Sometimes we have to say no – Opportunistic claims.
Our role is to support small businesses, but we cannot compromise our standards along the way, particularly as the effects of COVID-19 continue to rage on for our clients.
The Tax Practitioners Board together with the ATO released a clear statement that they will not look favourably on businesses who seek to become eligible for grants, loans, benefits or other assistance that they would not ordinarily be entitled to.
You will not be eligible for schemes like the Cash Flow Boost if you are found to become entitled to them when you would not ordinarily be. The statement says “any sudden changes to the characterisation of payments may cause us to investigate.”
So, if you come to us asking to change payroll, increase the amounts you’re paying, register you for PAYG-W have another request, we’re going to ask some questions. There’s nothing to worry about if you have a genuine business case for these requests, and we will always talk to you to find out what is best. We just ask you to work with us to help you get through this next stage stronger than ever. Thank you.
Watch out for scams. Do not click on links sent to you and emails asking you to donate now. If you are unsure visit a website independent of the link.
Are you using Zoom for conference calls or online meetings? You’ll want to be sure to read this notification from Zoom about security settings, and consider requiring a password from participants. Without a password, anyone with the meeting ID can join. Because of this loophole, many meetings have been “Zoom bombed” by uninvited participants who post inappropriate images or disrupt meetings with annoying sounds.
Have you downloaded the Cashflow Kit understanding your financial position is essential to decision making during this time.
Catch up on bookkeeping if you are experiencing quiet times. The better prepared you are the greater chance you have for success.
Failing to plan is planning to fail. Never before has this quote been so apt.Do you need to discuss your Business Continuity Plan? Contact us to make an appointment on Zoom, Skype, Facetime or by phone.
Wishing you all the very best for Easter.
We hope you get some fresh air sunshine. Take time to pause, reflect and recharge.
If you have any questions or concerns, don’t hesitate to reach out to us. We are in this together.