Changes to McPhail & Partners operations during current Victorian Stage 4 lockdown

As part of the ongoing fight against COVID-19, the Victorian Government has now imposed a strict Stage 4 lockdown which, amongst other things, requires all non-essential businesses to temporarily close.

McPhail & Partners are fully committed to doing our part to support this endeavour and have closed our office as of 5pm Wednesday 5th August 2020, with the entire team now working from home.

We remain fully operational but have outlined below some of the changes that we have made to enable us to continue to provide all the services you may require.

GETTING IN TOUCH

Under the Stage 4 restrictions, no physical client meetings will be held either at the McPhail & Partners offices or at client premises.

The team will still be available during normal office hours (8:30am - 5:00pm Mon-Fri) and can be contacted by the following methods:

  • Phone – the main office number is 9898 9221 and your calls can be transferred to the relevant team member
  • Email – either directly with one of our team members of to office@mcphail.com.au
  • Zoom – phone or email us to book a Zoom call

 EXCHANGE OF DOCUMENTS

With the 2020 financial year now ended we know many of you are keen to get your tax returns and financial statements prepared.  To enable the most efficient and timely turnover we ask that where possible you provide your source documents electronically to avoid any unnecessary delays.

We can accept documents via Email however if your records contain sensitive information such as TFNs or HIN/SRN references for shareholdings we have 2 secure online portals available that can be used.

Both the MYOB Client Portal (also used for electronic tax return approval) and Secure Returns can be accessed from our website at https://www.mcphailandpartners.com.au/client-login/.  If you aren’t already setup on one of these portals please contact us to arrange a new user setup.

We understand that not all clients will be able to utilise these online systems so our PO Box (PO Box 40, Mitcham, VIC 3132) will still be monitored if mailing your records is required.  We expect the postal system will be under significant strain during the lockdown so delays should be expected if the post is used.

As the Mitcham Office will be unattended we ask that no records be left at, or delivered directly to the office.  If none of the options above are suitable to you please call us on 9898 9221 so we can make alternate arrangements.

APPROVAL OF DOCUMENTS

We will be unable to produce paper-based products during this lockdown so all tax returns, BAS/IAS returns and financial statements will need to be sent via our electronic portals or via email for review and approval.

Further guidance on the use of these electronic approval systems will be provided by the team as our work is completed and we are happy to walk you through the process over the phone or on Zoom if required.

If these alternatives are not suitable for you then unfortunately you will need to wait until we return to the office after lockdown to produce the paper versions for you.

We thank you for your ongoing support, understanding, and patience through these challenging times. We hope that you and your families stay safe and healthy throughout the pandemic and look forward to seeing you all on the other side.

If you wish to discuss any of these changes further please do not hesitate to contact the office on 9898 9221.

 


Changes to McPhail & Partners operations during current Stage 3 lockdown

With Victoria again entering Stage 3 lockdown in the ongoing battle against COVID-19 we have implemented a number of changes to our operations to ensure the safety of our staff, clients and community whilst still remaining fully operational.

Office Closure and Remote Working

As per the Victorian Government guidelines, all staff that are able to work from home are now working remotely from home.  Whilst the team is physically separated we are in constant communication and all have full access to the McPhail’s system so we can continue to provide our full service offering to you, our clients.

We are hopeful the current Stage 3 lockdown will only last for the 6 weeks originally announced however, we will continue to follow the directions of the Victorian Government as more information becomes available.

In light of the current restrictions, no physical client meetings will be held at the McPhail & Partners offices until further notice.

The team will still be available during normal office hours (8:30am - 5:00pm Mon-Fri) and can be contacted by the following methods:

  • Phone – the main office number is 9898 9221 and your calls can be transferred to the relevant team member
  • Email – either directly with one or our team members of to office@mcphail.com.au
  • Zoom – phone or email us to book a Zoom call

Exchange of Documents

With the 2020 financial year now ended, we know many of you are keen to get your tax returns and financial statements prepared.  With the team working remotely, we ask that where possible you provide your source documents electronically to avoid any unnecessary delays.

We can accept documents via Email however if your records contain sensitive information such as TFNs or HIN/SRN references for shareholdings we have 2 secure online portals available that can be used.

Both the MYOB Client Portal (also used for electronic tax return approval) and Secure Returns can be accessed from our website at https://www.mcphailandpartners.com.au/client-login/.

If you aren’t already setup on one of these portals please contact us to arrange a new user setup.

We understand that not all clients will be able to utilise these online systems so our PO Box (PO Box 40, Mitcham, VIC 3132) will still be monitored if mailing your records is required.

We ask that records not be left unattended at the office.  If none of the options above are suitable to you please call us on 9898 9221 so we can make alternate arrangements.

Approval of Documents

As much as possible we would like to utilise our electronic portals and email to provide completed tax returns and financial statements for review and approval.  These systems provide a much more efficient turnaround time and don’t require any of our team to be physically in the office to print and mail out documents.

The team here at McPhails can discuss these alternatives with you as needed to ensure we can find the right option for each of you.

 

We thank you for your ongoing support, understanding and patience through these challenging times. If you wish to discuss any of these changes further please do not hesitate to contact the office on 9898 9221.


ATO scam calls may soon be a thing of the past

Last year, some 107,000 ATO impersonation scam calls were reported to the authorities. The real number is likely to be much higher, given that most of these type of calls go unreported. Scammers are increasingly using technological advances to appear more legitimate and nab unsuspecting victims.

One technique commonly used is “spoofing”, where scammers use software to mislead the caller ID technology on mobile phones and modern fixed line phones. Rather than transmitting the actual, typically overseas, phone number the call is coming from, the software “overstamps” it with another phone number. Commonly, the numbers used are widely publicised, such as the legitimate numbers used by the ATO.

Tip: The ATO has recently alerted the community to an SMS scam which claims that you’re due to receive a tax refund and asks you to click on a link. The ATO will never send an email or SMS asking people to access online services via a hyperlink.

Due to the prevalence of these scams and the large amount of money lost by individuals, Australian telcos, the ATO and the Australian Communications and Media Authority (ACMA) recently collaborated on a three-month trial of technology to block scam calls appearing to originate from legitimate ATO phone numbers. Under the Scam Technology Project, participating telcos used software to identify calls which had been “overstamped” with specified ATO phone numbers and blocked them.

According to the government, the trial has been “highly successful” in blocking spoof calls from specified ATO numbers. While this blocking technology will not stop scammers randomly ringing Australians pretending to be from the ATO, it will stop specific ATO numbers appearing in the caller ID on the recipient’s phone, making the scam seem less convincing.

Tip: If you receive a call from someone who says they are from a government department, such as the ATO, but you’re not sure whether the call’s legitimate, the best course of action is to hang up and phone back on a widely publicised number from an official website or source.

 


Additional cash flow boost coming for businesses

If your business is one of many that received the initial cash flow boosts as a part of the government’s COVID-19 economic stimulus measures, prepare for more help coming your way. When you lodge your monthly or quarterly activity statements for June to September 2020, your business will receive additional cash flow boosts.

Generally, the additional amount will be equal to the total amount that you initially received and will be split evenly between the lodged activity statements. Quarterly payers will generally receive 50% of their total initial cash flow boost for each activity statement, while monthly payers will generally receive 25% of their total initial cash flow boost for each activity statement.

However, if you’ve made adjustments or revised your activity statements after lodgment, the amount of additional cash flow boost payments you receive may be different.

Remember, if you haven’t made payments to employees subject to withholding, you need to report zero for PAYG withholding when lodging your activity statements to ensure you receive the additional cash flow boost payments. It’s important that you don’t cancel PAYG withholding registration until you have received the additional cash flow boosts.


Expanded instant asset write-off for businesses

If you’ve purchased assets for your business, remember that you may be eligible to claim an immediate deduction under the instant asset write-off, which was recently expanded.

From 12 March to 30 June 2020 inclusive, the instant asset write-off threshold for each asset increased to $150,000 (up from $30,000) for business entities with aggregated annual turnover of less than $500 million (up from $50 million).

To get it right, remember:

  • check if your business is eligible;
  • both new and secondhand assets can be claimed, as long as each asset costs less than $150,000;
  • assets must be first used or installed ready for use between 12 March and 30 June 2020;
  • a car limit applies for passenger vehicles;
  • if the asset is for business and private use, only the business portion can be claimed;
  • you can claim a deduction for the balance of a small business pool if its value is less than $150,000 at 30 June 2020 (before applying depreciation deductions); and
  • different eligibility criteria and thresholds apply to assets first used or installed ready for use before 12 March 2020.

Tax time 2020 is here

Don’t jump the gun and lodge too early

Tax time 2020 is here, but it’s likely to be anything but routine. Many individuals on reduced income or have increased deductions may be eager to lodge their income tax returns early to get their hands on a refund. However, the ATO has issued a warning against lodging too early, before all your income information becomes available. It’s important to remember that employers have until the end of July to electronically finalise your income statement, and the same timeframe applies for other information from banks, health funds and government agencies.

For most people, income statements have replaced payment summaries. So, instead of receiving a payment summary from each employer, your income statements will be finalised electronically and the information provided directly to the ATO. Your income statements can be accessed through myGov and the information is automatically included in your tax return if you use myTax.

Tip: Tax agents can also access this information, and we’re here to help you get your return right this year.

Although you may be eager to lodge as soon as possible, the ATO has warned against lodging too early, as much of the information on your income may not be confirmed until later. It’s generally important to wait until income statements are finalised before lodging a tax return to avoid either delays in processing or a tax bill later on. Your income statement will be marked “tax ready” on myGov when it’s finalised, and other information from banks, health funds and government agencies will be automatically inserted into your tax return when it’s ready towards the end of July.

If you still choose to lodge early, the ATO advises carefully reviewing any information that’s pre-filled so you can confirm it’s correct. When lodging early you’ll
also have to formally acknowledge that your employer(s) may later finalise income statements with different amounts, meaning you may need to amend your tax return and additional tax may apply.

Tax return tips

With the great disruptors of the Australian bushfires and the global coronavirus (COVID-19) pandemic, and the associated government economic stimulus measures, there are some key tax-related matters for everyone to be aware of this year.

The ATO has a range of approaches to support taxpayers through tax time 2020, especially where new circumstances mean you might be receiving a different type of income or be able to claim new deductions. The ATO’s Tax Time Essentials page (www.ato.gov.au/taxessentials) provides a one-stop-shop for the things that are a little different this year and how they impact tax returns.

People accessing super early as a part of the COVID-19 early release scheme can rest assured that this money will not form a part of their assessable income. To date, 1.98 million people have withdrawn an average of $7,475 from their super under the scheme.

Another key difference this year is the introduction of the optional simplified method for claiming work from home expense deductions. This method allows you to claim 80 cents for each hour you worked from home from 1 March 2020 to 30 June 2020, to cover all deductible expenses. However, if you were working from home before 1 March 2020 or have documented actual expenses that work out to be more than 80 cents per hour you can still use the usual method to claim expenses related to working from home.

If you were unable to work from home and had to take leave or were temporarily stood down, if your employer made any kind of payment, either regular or one-off, those amounts will need to be declared as wages and salary on your return and tax will apply at your usual marginal rates. This applies regardless of whether the payments are funded by the government JobKeeper scheme.

If you’ve been made redundant or had your employment terminated, any payment you receive may consist of a tax-free portion and a concessionally taxed portion, which means that you could potentially pay less tax.


Leading Through Crisis – Reflections by Matt Drew

Over the last couple of months, we have all had our worlds turned upside down.  We have been forced to isolate from our friends and family, parents have become teachers (in the formal sense of the word), businesses have been forced to close or “pivot” to survive and so many of us have seen our home and work lives merge as we embrace remote working arrangements.

As a business owner and employer this has been a time of great challenge but also of unexpected personal growth and understanding.  As the crisis developed here in Australia in early March we, like many others, were forced to make decisions about the path our business would take and how best to support our staff and clients through the days, weeks and months to come.  Every day brought new updates, less toilet paper and more uncertainty as words like “unprecedented”, “self-isolation” and “hibernation” were thrown at us from everywhere.

In a matter of days new policies had to be developed and implemented, remote working technologies installed, and systems and procedures had to be re-worked in response to the information being provided by the Government.

We made the call quite early in the piece to activate our remote working arrangements for those team members who were considered higher risk.  More followed shortly after as schools closed early and the health and wellbeing of family came into sharper focus.  As the remaining physical presence of the partnership team I don’t think I had fully appreciated what the task of managing a swiftly scattering team would entail, particularly in a time of such uncertainty.

It was around this time that an email arrived in my inbox from an organisation called Future of Leadership (https://www.futureofleadership.com.au/).  I had attended their Melbourne event late last year where I was inspired by the stories of leaders from a cross section of society so when the email arrived I was drawn to it immediately.  The email was for a 10-part webinar series on Zoom (another word we are all now very familiar with) about leading through crisis which aimed to provide business leaders with the tools they needed to get the best out of themselves and their teams.

It was amazing how these little 45 minute daily escapes mirrored so many of the real life issues that were happening around me.  Some of the key learnings I took from these sessions and from my own experiences over the last couple of months are:

  • Take some time each day to focus on yourself – mediate, exercise or do some breathing exercises to reduce your stress and build your mental resilience
  • Build and support your tribe – understand what your people and your clients need from you
  • Give information and you get understanding – keep your teams informed on what is happening so they can understand the process and make their own plans and decisions around this
  • Be present - we don’t expect our leaders to have all the answers but we expect them to be present (not necessarily physically).
  • Communication and Connection is critical – embrace technology to maintain the human relationships as social isolation does not mean you have to be alone
  • Be flexible – we sometimes resist what can help us the most
  • Disasters are always unique and unprecedented but leading though crisis is not – there are lessons to be learned from each crisis that we can apply to the next one

From a personal perspective I found these sessions incredibly useful and engaging as they allowed me to shut off the noise from the outside world and focus on the things that were within my control.  This really highlighted to me the importance of sharing our experiences and asking for help and advice when we need it.  Whether that is by participating in a series like this (which is still available to purchase and watch online), or being part of an online community, or simply having the conversations with your family and friends.

We are obviously still managing through this current crisis and each day seems to bring a new challenge (or Government incentive to understand) which we just have to deal with as it comes.  However once the World returns to “normal”, whatever that might look like, I think it is important that we all stop and reflect on what we have all been though and the lessons we have learned.

The team here at McPhails are still fully operational and here to support our clients through these difficult times so please reach out if we can assist in any way.  We are looking forward to getting through this and seeing everyone back up and running on the other side.


Australian Government announces $130 billion JobKeeper Payment in Response to the Coronavirus Pandemic

Australian Government announces $130 billion JobKeeper Payment in Response to the Coronavirus Pandemic

The Government is introducing a subsidy program to support employees and businesses. The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.

Overview

The JobKeeper Payment will support employers to maintain their connection to their employees. These connections will enable business to reactivate their operations quickly – without having to rehire staff – when the crisis is over.

In summary:

  • Under this proposal the government will provide eligible businesses with funding of $1,500 per fortnight per eligible employee for up to 6 months.
  • The JobKeeper Payment is provided in addition to the previously legislated stimulus packages and goes a step further to help support those businesses and employees that have suffered significant financial impacts as a result of the ongoing Coronavirus pandemic.
  • Importantly this payment will also be available to the self-employed and not-for-profit organisations.

Eligibility - Employers

Employers will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent; or
  • their business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent; and
  • the business is not subject to the Major Bank Levy.

To calculate if a business has faced the required percentage fall in their turnover, the business would need to compare their turnover for the month of March 2020 (for monthly BAS lodgers) or three months January-March 2020 (for quarterly BAS lodgers) with the income reported for the relative period a year earlier.

The Tax Commissioner will have discretion to consider additional information where special circumstances exist, such as a new business which was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover.  We suspect there will be a special application required in these circumstances however further details will be provided by the ATO in due course.

Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.

Eligibility - Employees

Eligible employees are employees who:

  • are currently employed by the eligible employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
  • are at least 16 years of age;
  • are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
  • are not in receipt of a JobKeeper Payment from another employer.

If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.

Application Process

The Government has advised all employers to register their interest in applying for the JobKeeper Payment via ato.gov.au so they are kept up to date with when information becomes available.  This registration only takes 30 seconds to complete and requires the business to simply provide their ABN and contact details.

Once this legislation has passed through Parliament, eligible employers will be able to apply for the scheme via an online application with the ATO making the first payments to employers in the first week of May 2020.

Payment Process

Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.

Where employers participate in the scheme, their employees will receive this payment as follows.

  • If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
  • If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment. Payments will be made to the employer monthly in arrears by the ATO.

What you need to do:

  1. Eligible employers should register their interest for the JobKeeper payment with the ATO straight away via the ATO website
  2. Business accounting records should be updated to the end of March 2020 as soon as possible to determine impact on business turnover
  3. Identify all eligible employees of your business as you will need to provide these details to the ATO once applications open
  4. Wait for further information on the application process and finer details of the scheme to be released by the Government

These are the details which have been announced at this stage however further clarification on the operation of the scheme is expected over the coming weeks once legislation has been passed.  We will be doing our best to follow up with all effected clients who may qualify for this payment.  However, if you wish to discuss any of these items and how they may impact on your business, please do not hesitate to contact the office on 9898 9221.

 


Foreign Residents and the Main Residence Exemption

Laws limiting foreign residents’ ability to claim the CGT main residence exemption are now in place. This means that if you’re a foreign resident for tax purposes at the time you sign a contract to sell a property that was your main residence, you may be liable for tens of thousands of dollars in CGT. Some limited exemptions apply for “life events”, as well as property purchased before 9 May 2017 and disposed of before 30 June 2020.

According to the ATO, a person’s residency status in earlier income years will not be relevant and there will be no partial CGT main residence exemption. Therefore, not only are current foreign residents affected, but current Australian residents who are thinking of spending extended periods overseas for work or other purposes may also need to factor in this change to any plans related to selling a main residence while overseas.


ATO Scrutiny On Car Parking Fringe Benefits

The ATO has started contacting certain employers that provide car parking fringe benefits to their employees to ensure that all fringe benefits tax (FBT) obligations are being met. Generally, car parking fringe benefits arise where the car is parked on the business premises of the entity, used by the employee to travel between home and their primary place of employment and is parked for more than four hours between 7 am and 7 pm, and where a commercial parking station located within 1 km of the premises charges more than the car parking threshold amount.

Employers have a choice of three methods to calculate the taxable value of the benefits: the commercial parking station method, the average cost method and the market value method. The method currently under ATO scrutiny is the market value method, which states that the taxable value of a car parking benefit is the amount that the recipient could reasonably be expected to have to pay if the provider and the recipient were dealing with each other under arm’s length conditions.