Pedal to the metal: EOFY is officially bearing down on us

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Keen to buy a vehicle, asset or another vital piece of equipment for your business and immediately write off the cost? Well, you better get cracking, as we’re officially entering end-of-financial-year territory.

How time flies. It feels like only yesterday that we were gearing up for the year, and now, it’s all systems go to beat the EOFY deadline.

Why the hurry?

Well, businesses keen to invest in their future can immediately write off the full value of any eligible depreciable asset purchased, at any cost, under the federal government’s temporary full expensing scheme.

But there’s a small catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

The write-off scheme explained in more detail

Ok, so temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset until 30 June 2023 (which was recently extended from 30 June 2022 in the federal budget).

This can help improve your cash flow by allowing you to reinvest the funds back into your business sooner.

Businesses can also immediately deduct the business portion of the cost of improvements to eligible depreciating assets.

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);

– first held by you at or after 7.30pm AEDT on 6 October 2020;

– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023, and;

– the asset must be used principally in Australia.

Obtaining finance that’s right for your business

When purchasing an asset with the intention of using this scheme, it’s crucial to select a finance option that’s suitable for your business.

And that’s where we can help out. We can present you with financing options that are well suited to your business’s needs now, and into the future.

So if you’d like help obtaining finance that’s gentle on your cash flow, and helps you achieve your long-term goals, please get in touch asap so we can help you beat the EOFY deadline.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

SMEs to get full asset write-off extension and fairer go with ATO

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Small businesses in dispute with the ATO over their tax debt will get “a fairer go” under new rules proposed in the federal budget. Meanwhile, one-year extensions have been granted for the full asset write-off and loss carry-back schemes. Let’s break it all down.

There’s a lot to digest in this year’s pandemic-recovery federal budget.

So today we’ve chosen to focus on just a few key budget announcements we feel may help SMEs manage finance and debt in the years to come.

Temporary full asset write-off and loss carry-back extensions

Great news for small businesses keen to invest in their future: they can continue to write off the full value of assets purchased until 30 June 2023.

The popular scheme, called ‘temporary full expensing’, is an expanded version of the popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, until 30 June 2023.

This can help improve your cash flow by allowing you to reinvest the funds back into your business sooner.

To complement this, the federal government’s ‘loss carry back’ provision has also been extended to 30 June 2023.

“This is a tax initiative that effectively allows a small business to carry back tax losses from 2022/23 income year to offset previously taxed profits as far back as 2018/19, to support business recovery,” explains Small Business Ombudsman Bruce Billson.

Third umpire to pause ATO debt recovery actions during disputes

Small businesses will soon be able to apply to the Administrative Appeals Tribunal (AAT) to pause or modify ATO debt recovery actions where the debt is being disputed.

“Small businesses disputing an ATO debt in the AAT will get a fairer go by stopping the ATO from relentlessly pushing on with debt recovery actions against a small business, while the case is being heard,” Mr Billson explains.

Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be expensive and time-consuming.

“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling,” adds Mr Billson.

The AAT will be able to pause or modify ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved.

“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business,” says Mr Billson.

Get in touch for finance for your business

While it’s all well and good to have the AAT pause ATO debt recovery instead of the courts, the fact remains that many small businesses will still need to pay their ATO debt back.

So if the ATO is seeking a tax debt from your business, get in touch to discuss finance options for repaying them sooner, and giving you some breathing space.

And if we backtrack to the beginning of this article, being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the ‘temporary full expensing scheme’ won’t be of much use to you.

So if you’d like help obtaining finance to make the most of temporary full expensing for your business – whether it’s this financial year or next – reach out to us today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Business demand for equipment has hit record numbers

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Businesses across the country are purchasing new equipment and vehicles in record numbers, as companies big and small embrace the strongest market conditions seen in years, according to NAB data.

And with the end of the financial year approaching quickly, we’re expecting demand for equipment and vehicles to remain strong, with businesses looking to invest in their future by taking advantage of the federal government’s temporary full expensing rules (more on that below).

NAB believes the demand for new equipment is the result of a bumpy 2020, when businesses were forced to ‘pivot’ and innovate their way through the pandemic.

And now Australian businesses are investing to build on the opportunities they uncovered.

“With business confidence at an all-time high and businesses building on things they’ve learnt through the pandemic, I’m not surprised that equipment sales are so high,” says NAB Executive Regional and Agribusiness Julie Rynski.

The top equipment purchases Australian businesses have made according to NAB include:

– tractors up 146% year-on-year (YOY)
– irrigation equipment up 217% (YOY)
– earthmoving/construction equipment up 133% (YOY)
– forklifts up 216% (YOY)
– coffee machines up 155% (YOY)

What’s that ‘temporary full expensing’ thing you mentioned?

Temporary full expensing is more or less an expanded version of the federal government’s popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, up until 30 June 2022.

This can help improve your business’s cash flow by allowing you to reinvest the funds back into your business sooner.

But it’s important to note that the asset must be installed, or ready for use, by 30 June in order to be eligible for this financial year.

Full details on business and asset eligibility can be found on the ATO’s website.

Want to explore your finance options for a new business asset?

Being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the scheme won’t be of much use to you.

So if you’d like help obtaining finance to make the most of temporary full expensing for your business, get in touch with us today.

We can present you with financing options for the scheme that are well suited to your business’s needs now, and into the future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

COVID-19 repayment amnesty over: how to avoid a bad credit rating

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The COVID-19 loan deferral program and credit reporting amnesty is now over, which means banks will report any late repayments on mortgage or small business loans to credit agencies unless you’ve entered into a hardship arrangement.

The banks’ mortgage deferral program and subsequent credit score reporting amnesty officially ended on April 1.

The package was created during the peak of COVID-19 to provide loan repayment relief for almost one million home and business loan borrowers facing financial hardship.

Luckily, many people have since been able to resume their repayments – as of late February, just 2,803 small business loans (1.2%) and 22,480 housing loans (5%) were still deferred, figures show.

But, we’re not out of the woods yet.

The JobKeeper wage subsidy scheme has also just officially ended, which has the potential to put tens of thousands of households and businesses at risk once more.

If you think you might be impacted by JobKeeper, read on

Latest reports indicate up to 150,000 workers could lose their jobs this month due to JobKeeper ending.

If your ability to repay your home or small business loan might be affected in the months ahead, then it’s important to act now, rather than wait until after you’ve missed a repayment.

That’s because by then it could be too late and it might end up on your credit file.

Your most appropriate course of action, however, will depend on your individual circumstances, which we’ve broken up into two categories below.

Category 1: Repayments will be tight, but possibly doable

If your upcoming loan repayments are looking tight, but possibly doable, then get in touch with us today to discuss some financing options that might make your repayments more manageable.

These options might include:

– switching to interest-only repayments for a period of time,
– renegotiating your rate with your current lender,
– refinancing to another lender,
– debt consolidation, or
– a combination of these and other measures.

Category 2: You don’t think you’ll be able to make your repayments

If you’ve lost your job due to JobKeeper ending, for example, and the chances of making your repayments are looking a little grim, then it’s important to get in touch with your bank today to discuss entering into a hardship arrangement.

Not only will this potentially give you some breathing space on your repayments, but it will help keep any missed payments off your credit file, as the Australian Banking Association states below:

“For customers that enter into another form of hardship or forbearance arrangement with their bank, banks will not report the repayment history information. Instead, they will leave the field blank for the duration of the arrangement.”

If you’d like to discuss any of the above in further detail please don’t hesitate to get in touch today – we’re here to help any way we can.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Free new mental health support service for small business owners

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Floods, fire and pandemic – it’s been an incredibly tough 15 months for many Australian businesses. And with government support about to end, looking after your mental health will be just as important as taking care of your business’s financial health.

With the federal government’s COVID-19 JobKeeper wage subsidy scheme expiring on 28 March, experts are tipping as many as a quarter of a million jobs could be lost.

When you also consider that rental eviction moratoriums are coming to an end in several states, and flooding is taking place across large parts of Australia’s east, then there is a lot of pressure on small businesses owners across the country right now.

Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Bruce Billson says it’s important for small business owners to consider their mental health and reach out if they’re not coping.

“Help is available to small business owners who need it. NewAccess for Small Business Owners offers free one-on-one telehealth sessions with specially trained mental health coaches providing evidence-based advice on strategies for managing stress,” he says.

Free mental health support

Developed by BeyondBlue, NewAccess is a confidential mental health program where coaches with a small business background work with business owners to tackle challenges.

Businesses can access up to six sessions, with the initial 60-minute assessment designed to talk through your challenges, develop a problem statement and create a personalised needs-based plan.

Subsequent half-hour sessions involve the business coach stepping you through your plan, providing practical tools for managing stress, and reviewing progress.

“Being able to talk to someone who understands the mental load of running a small business will make a real difference,” Mr Billson says.

“Small business owners who look after their mental health, can also help their business.”

No doctor’s referral or mental health treatment plan is required and the free service is available via phone or video call from 8am to 8pm.

Business health support

NewAccess has been incorporated into the ASBFEO’s My Business Health tool, which provides assistance in three key areas.

The section on how to keep your business afloat looks at government support, managing outgoings and cashflow.

How to manage your business explores COVID-19, staffing, workplace health and safety, resolving disputes and insolvency challenges. Where to access support includes a 5-minute wellbeing checkup, links to support services and natural disaster recovery.

And lastly, your business’s financial health

If it’s your business’s finances that are causing you stress, please know that there are lender support services to help you navigate financial challenges.

For example, Australian banks offer a range of financial support options to help farmers and small businesses affected by natural disasters, such as the NSW floods, which can include:

– a deferral of scheduled loan repayments
– waiving fees and charges, including break costs on early access to term deposits
– debt consolidation to help make repayments more manageable
– restructuring existing loans, without the usual establishment fees
– deferring interest payments on a case-by-case basis
– offering additional finance to help cover cash flow shortages.

If you’d like to talk through how some of these options may help your business, please don’t hesitate to get in touch with us or your lender today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.