May, 2020

Tax Planning for 30 June 2020

Traditionally, 30 June each year brings forth a rash of initiatives through which the level of taxation for the current financial year may be reduced. Consult your tax advisor about tax planning for 30 June 2020 as follows:

Timing of Income

Where possible, defer receipt of assessable income until after year end.

Timing of expenses

Where possible, incur deductible expenses prior to year end.

Instant asset write off

New or secondhand business assets first used or installed ready for use in business from 12 March 2020 to 30 June 2020, eligible for write off cost of up to $150,000 – i.e. an immediate 100% tax deduction.

Bad debts

Review debtors and, where debts are unrecoverable, physically write off before year end to claim a tax deduction.

Trading stock on hand

Scrap any obsolete or damaged stock before 30 June.


Ensure payments for employees or by self-employed persons are physically made (and received) on or before 30 June.


Immediate deductions are available for:

  • Pre-payment of salary
  • Expenses <$1,000
  • Individuals, for non business expenses incurred on or before 30 June for the next twelve months – e.g. interest on rental property

Superannuation rebates

Contributions made on behalf of a low or no income spouse of up to $3,000 can attract an 18% rebate – i.e. $540.

Superannuation co-contributions

The Government will contribute up to a maximum $500 to add to eligible employees’ personal contributions to superannuation funds of up to $1,000, subject to an assessable income (reportable fringe benefits, reportable employer superannuation contributions and salary sacrifice superannuation contributions) limit of $38,564, phasing out at $53,564, subject to age, income and total superannuation balance.

Motor vehicle expenses

Where significant employment or business use of a personal motor vehicle is claimed, maintain a log book for twelve weeks to maximise the tax deduction and keep records of all expenses. The log book must be renewed every five years and can be kept in an electronic or paper format.

Record the financial year end odometer reading.

Small businesses (turnover <$10m) can claim an instant deduction for motor vehicles used for business 100% and costing up to <$30,000 (this concession is extended to 30 June 2020 – the pandemic instant asset write off for new or secondhand assets 100% business use increased to $150,000 from 12 March 2020 to 30 June 2020).

Plant and equipment

Review your asset schedule to scrap obsolete, worn out, lost or stolen items to maximise your depreciation claim.

Delay the disposal of any plant and equipment likely to be profitable in terms of written down value until 1 July.

Small businesses (turnover <$10m) can claim an immediate deduction for assets acquired, first used or installed ready for use, costing under $30,000 (GST exclusive). The $30,000 limit increased to $150,000 from 12 March 2020 to 30 June 2020.

Home office expenses

If carrying on a business from your home, pro rata tax deductions for interest or rent, insurance etc are available but impact on the main residence exemption from capital gains tax.

Directors’/employees’ entitlements

Ensure any 2020/2021 salary packaging arrangements are in place before the commencement of the new tax year.

Bonuses and fees for the 2019/2020 year need to be approved at meetings and in place prior to 30 June 2020 but may be paid in the subsequent year.

Private company loans

Any loans to shareholders or associates during 2019/2020 need to be repaid on or before 15 May 2021 unless a formal loan agreement is put in place, with annual minimum principal repayments and interest.

Sale of investments

Delay the sale until after year end where a gain is anticipated to defer tax for a year.

Crystallise any capital losses in the tax year to offset against any gains made in the same year.

Timing of disposal under a contract for capital gains tax purposes is generally the date of making the contract, not settlement.

Capital gains tax concession

Assets need to be held for at least twelve months to access the 50% discount for individuals and trusts and the 33⅓% discount for superannuation funds.

Ceasing business / sale of business assets

Consider redundancy payments for employees.

Plan “golden handshake” payments for after the tax year end.

Small business capital gains tax relief measures may be available for:

  • 15 year exemption
  • 50% reduction
  • Retirement exemption
  • Replacement asset rollover

PAYG payment summaries

Summaries and summary statements for employees are required by the ATO by 14 August, otherwise substantial penalties apply.

Superannuation fund expenses

All expenses of a fund ought to be paid by the fund in order to claim a tax deduction.

Depreciable plant costing $300 or less

Salary and wage earners and rental property owners will be entitled to an immediate deduction if plant for work related purposes costing $300 or less is purchased before 1 July 2020. Some purchases you may consider include:

  • Books and trade journals
  • Briefcases/luggage or suitcases
  • Calculators, electronic organisers
  • Software
  • Stationery
  • Tools of trade

Clothing expenses

Purchase and pay for work related clothing/expenses prior to the end of the income year, such as:

  • Compulsory, non-compulsory (and registered) occupational specific and protective clothing
  • Other expenses associated with such work related clothing such as dry cleaning, laundry and repair expenses

Self-education expenses

Consider pre-paying the following self-education items before the end of the income year:

  • Course fees (but not HELP fees), student union fees and tutorial fees
  • Interest on borrowings used to pay for any deductible self-education expenses

Also, bring forward purchases of stationery and text books (i.e. those which are not required to be depreciated).

Other work related expenses

Employees can pre-pay any of the following expenses prior to 1 July 2020:

  • Union fees
  • Subscriptions to trade, professional or business associations
  • Magazine and newspaper subscriptions
  • Seminars and conferences
  • Income protection insurance (excluding death and total/permanent disability)


Note: When pre-paying any of the above expenses before 1 July 2020, ensure that any services are provided within 12 months of the payment and before 1 July 2021. Otherwise, the deductions must be claimed over the period of the pre-payment. Any expense under $1,000 is exempt from pre-payment rules.


To ensure you don’t miss out on saving yourself $$$, CONTACT US TODAY about tax planning 30 June 2020.

Rental Assistance Covid-19

WA Government rental assistance available for those impacted by Covid-19

The WA Government is providing $30 million for grants of up to $2,000 in rental assistance for residents adversely impacted by the Covid-19 crisis.  This is a one-off payment of up to $2,000 and is paid direct to the landlord or agent to offset part of any rent reduction, conditional on:

    • tenant lost job since March 2020
    • tenant applied for Centrelink support
    • tenant has limited savings, and
    • tenant has renegotiated rent with the owner/agent

The rental assistance payment itself is limited to four times the agreed reduction in rent!

For more information, visit residential rent relief grant scheme where you can also submit an online application.


Instant Asset Write Off NOW $150,000!

Increased from $30,000 to $150,000 for a limited time!

As part of the COVID-19 small business support measures, the instant asset write off threshold has been increased from $30,000 to $150,000.  This applies to business assets, new and second-hand, first used (or installed ready for use) in the period 12 March 2020 to 30 June 2020.

The cost of any such business assets purchased in this period for use in the business will be fully tax deductible for the 2019/2020 year, and this includes acquisition through commercial loan, chattel mortgage or hire purchase (but not leased assets).

The instant asset write off brings forward the 100% tax deduction into 2019/2020 rather than have the asset depreciated over years!

On 1 July 2020, and after, the threshold reverts to $1000.

For more information on the instant asset write off  CONTACT US  today.


GST Turnover Test

JobKeeper Decline in GST Turnover Test

The “turnover test period” must either be

  • a calendar month that ends after 30 March 2020 and before 1 October 2020 or
  • a quarter that starts on 1 April 2020 or 1 July 2020
Compare projected GST turnover for the: With current GST turnover for the:
month of March 2020 month of March 2019
month of April 2020 month of April 2019
June 2020 quarter June 2019 quarter

The foregoing BASIC test will be satisfied if the GST turnover is at least 30% less than any one of the corresponding 2019 turnovers. The decline in GST turnover test is only required to be satisfied once.

The business may use a monthly comparison even if it is a quarterly BAS lodger and equally the business is free to use a quarterly comparison even if it is a monthly BAS lodger.

GST (BAS) accounting normally used, e.g. cash or accrual, should be used to determine sales for the month or quarter.

If not registered for GST, use the same accounting method as used for income tax purposes.

Apart from the BASIC GST turnover test above, there is an ALTERNATIVE decline in GST turnover test for classes of entities as follows:

1.  New businesses

2.  Businesses with a substantial increase in turnover

3.  Businesses with an irregular turnover

4.  Businesses affected by drought or natural disaster

5.  Business acquisition or disposal that changed the entity’s turnover

6.  Business restructure that changed the entity’s turnover

7.  Sole traders or small partnerships with sickness, injury or leave.

If you need assistance with JobKeeper payment enrolment or reporting, CONTACT US without delay!





JobKeeper Payment Extension

JobKeeper enrolment date has been extended!

For those employers and sole traders who are eligible for JobKeeper payments, the time to enrol has been extended to 31 May 2020.  Enrolment by this date will still allow you to claim the April and May fortnightly JobKeeper payment reimbursements, provided you have paid and continue to pay your eligible employees for each fortnight (including any 1 March 2020 employees stood down but re-engaged).

Even though the business enrolled later, but on or before 31 May 2020, it may receive the first fortnight 30 March to 12 April 2020 reimbursement payment, provided the business experienced a 30% reduction in revenue for March 2020 or April 2020. Should the business 30% decline have occurred in May 2020 then entitlement will be for the May and later JobKeeper reimbursement payments.

Should, for example, the 30% decline in revenue occur in July 2020 then the entitlement will be for the July and subsequent fortnightly payments. In this and similar cases the enrolment may occur post 31 May 2020 e.g. July decrease in revenue requires July enrolment.

If you need assistance with JobKeeper payment enrolment or reporting, CONTACT US without delay!