Business News Update – 24 March 2021
Welcome back to another episode of our Business News Updates. We share the latest about COVID-19 including the vaccine rollout as well as some business ideas that may help.
Phase 1B of Vaccine Rollout Begins
Phase 1B of Australia’s COVID-19 vaccination rollout plan started this week to further cushion the health, social, and economic impacts of the pandemic.
Priority groups in Phase 1B include:
- elderly adults aged 80 years and over
- elderly adults aged 70 years and over
- health care workers not vaccinated in Phase 1A
- Aboriginal and Torres Strait Islander adults over 55
- adults with a specified medical condition
- adults with a severe disability who have a specified underlying medical condition
- critical and high risk workers including defence, police, fire, emergency services and meat processing.
Appointment availability will be increased as the number of clinics grow from 1,000 to over 4,000 in the next four weeks.
Business Events Australia Launches Free Marketing Toolkit
Business Events Australia has launched a marketing toolkit to help the Australian business events industry recover from the impact of COVID-19.
These free marketing assets include 30 and 60 second video vignettes, marketing collateral for the promotion of key business event destinations, fact sheets on funding programs, social media guide, and logos.
These broad range of assets can be used in event bids, pitch presentations, and across their social media and promotion channels.
$25,000 Grants for Cyclone-Impacted Primary Producers in North Queensland
Grants of up to $25,000 are now available to support the recovery of primary producers in North Queensland affected by the Tropical Cyclone Niran. This comes after primary producers in Cairns, Cassowary Coast, Hinchinbrook, Mareeba, and Tablelands reported between 20 to 100% crop loss and damage to plant machinery and equipment.
Total economic impact on primary producers is estimated at $146 million in the Cassowary Coast region alone. You can find out more about the assistance available to primary producers here.
Australian Government Disaster Recovery Payment Available After NSW Floods
People adversely affected by the floods in New South Wales can claim a lump sum payment of $1,000 per adult and $400 for each child younger than 16 through the Australian Government Disaster Recovery Payment.
If you lost income as a direct result of the floods, you can also take advantage of the Disaster Recovery Allowance.
Stimulus Package for Tourism Industry: Cheap Flights, Loans and Financial Aid
The Australian government unveiled a $1.2 billion tourism support package to help boost local travel, while international borders remain closed.
Airline ticket subsidies for travellers, cheap loans to small tour companies and financial aid for the country’s two largest airlines are designed to keep this critical sector afloat until our international borders reopen.
Wage Subsidy Scheme for Apprentices to Be Expanded
The government will spend $1.2 billion to expand its wage subsidy scheme for apprentices, as JobKeeper is set to end this month.
Under the apprentice scheme, the government will pay half the wages of apprentices up to a maximum of $7,000 each quarter for 12 months. It will run until September 2022. Ask us if you have any questions.
Second Round of ‘Boosting Female Founders Initiative’
The federal government has launched a second round of funding for the Boosting Female Founders Initiative worth $11.6 million. This will support female entrepreneurs to build their businesses and create local jobs.
Through this government support, grants between $25,000 and $400,000 will be provided to Australian start-up businesses that are female-founded or majority owned and led by women.
Applications opened on 8 March 2021, International Women’s Day.
JobKeeper ends soon: what to do if you’re worried about your business
If your business is struggling with cashflow or other issues at the moment, it’s time to have a chat. It’s a good time to take stock and think about your business more broadly. It’s likely that any underlying issues have been compounded by the COVID-19 crisis, magnifying and accelerating the impact of these issues.
If you are worried about how your business will make ends meet without JobKeeper, you should speak with your advisor to find out your options. It’s crucial to be proactive and act early if you feel you will be in financial distress. Get in touch with us to find out how we can help you weather this storm. We’ll make sure you have a solid understanding of your business’ current financial position so you can make informed decisions.
The final JobKeeper payment will be processed in April 2021.
If you haven’t yet enrolled there’s still time. If you’re eligible you can enrol at any time until the end of March 2021.
If you already receive JobKeeper payments for your eligible employees, you don’t have to do anything when the program closes.
However, you will need to complete your final monthly business declaration for March by 14 April 2021.
If you still need assistance you may be eligible for the JobMaker Hiring Credit or other help, just ask us.
Claiming the JobMaker Hiring Credit
The JobMaker Hiring Credit is available for eligible employers who create new positions for eligible young people between 7 October 2020 and 6 October 2021.
To receive JobMaker Hiring Credit payments, you don’t need to satisfy a fall in turnover test. All you need to do is complete three steps:
- Register – via ATO online services, Online services for business or the Business portal, or through your registered tax or BAS agent.
- Nominate your eligible additional employees – by running payroll events through your Single Touch Payroll (STP) enabled software by 27 April 2021.
- Claim payments – using ATO online services, Online services for business or the Business portal, or through your registered tax or BAS agent.
You can register at any time until the scheme ends. Ask us if you have any questions.
Beware of Scammers Impersonating the ATO
The Australian Taxation Office (ATO) is warning about a new batch of scammers impersonating the ATO who are claiming they’ve suspended their target’s tax file number (TFN) following suspected fraudulent activity.
While the number of people falling victim to this scam is low, the large amounts being lost per person is alarming, according to Assistant Commissioner Trent Jakubowski.
So remember, the ATO does call taxpayers but will never:
- send unsolicited pre-recorded phone messages
- use aggressive or rude behaviour, or threaten you with immediate arrest, jail or deportation
- suspend your TFN
- request direct transfers of money to a personal bank account
- project their number onto your caller ID
If you receive a suspicious call, email, or SMS, report it to ato.gov.au/reportascam or call the ATO’s dedicated scam line 1800 008 540 to check if it was legitimate.
Upcoming Key Dates
Upcoming key lodgment and payment dates for businesses:
- Lodge tax return for companies and super funds with total income of more than $2 million in the latest year lodged (excluding large/medium taxpayers), unless the return was due earlier. Payment is also due by this date.
- Lodge tax return for the head company of a consolidated group (excluding large/medium), with a member who had a total income in excess of $2 million in their latest year lodged, unless the return was due earlier. Payment is also due by this date.
- Lodge tax return for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more, excluding large/medium trusts. Payment is due as advised on their notice of assessment.
Contact us if you have any questions.
It’s time to review your fringe benefits
The fringe benefits tax (FBT) year ends on 31 March. That means it’s time to review the benefits you’ve provided to your employees for the last 12 months and work out which of those attract FBT.
Examples of fringe benefits include:
- private use of work cars
- entertainment (e.g. concert tickets)
- reimbursement of employees’ expenses (e.g. school fees)
- salary sacrifice arrangements.
Over the past year there have been many changes and restrictions due to COVID. To adapt, you may have provided your employees different benefits to those you usually provide, and these may be exempt from FBT.
Generally, you do not need to pay FBT for:
- items provided to employees to enable them to work from home (e.g. laptop or portable device)
- emergency accommodation, food and transport
- emergency health care.
Government-backed COVID-19 Loans Extended
The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
Understanding Contribution Margin and Why You Need It
When you run a business, you obviously would like to know how profitable it is. You can check your profit margin to understand by how much your revenue exceeds costs.
However, if you’d like to dig deeper and learn how a certain product contributes to your profit, you have to look at the contribution margin.
When you create a product or deliver a service and deduct the variable cost of offering it, the leftover revenue becomes the contribution margin.
So simply put,
Contribution margin= revenue – variable costs
By knowing the contribution margins, you can decide whether to add or subtract a product line, how to price it, and how to structure sales commissions.
If a product’s contribution margin is negative, it means your company is losing money producing it. Your course of action could be to discontinue the product or increase its price. Meanwhile, if a product has a positive contribution margin, you would want to keep it.
However, the first step in calculating for the contribution margin is to use your income statement and identify all your fixed and variable costs. This is not as straightforward as it sounds because it’s not always clear which ones fall into each category.
So if you want to save time and ensure that you get the contribution margins right, get in touch with us so we can help you make informed business decisions.
Contact us if you have any questions or want to discuss the next steps for your business.
From the 2 Peas Team Pty Ltd
P: 1300 896 732