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Jobmaker Hiring Credit

Jobmaker Hiring Credit

On 6 October 2020 as part of the 2020–21 Budget, the government announced a new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit. The JobMaker Hiring Credit will be administered by the ATO.

Eligible employers will have access to a JobMaker Hiring Credit for each new job they create over the 12 months from 7 October 2020, for which they hire an eligible employee, for a maximum claim period of 12 months from their employment start date.

Employers will register with the ATO and make claims quarterly, with claims commencing in February 2021.

This measure is subject to the passage of legislation.

The JobMaker Hiring Credit will be:

  • $200 per week for each eligible employee aged 16 to 29
  • $100 per week for each eligible employee aged 30 to 
Contact us today on 07 3800 0807 to assist you with the eligibility requirements of Jobmaker Hiring Credit

 

Depreciation


What you need to know about building an investment property

When thinking of an investment property, your first thought probably isn't an empty block of land. But did you know that there are many advantages to building an investment property? Not only can you build the property to be fit-for-purpose, there are long-term financial benefits that can boost your cash flow.  

You can claim depreciation on all capital works and plant and equipment

Depreciation is the natural wear and tear of a building and its assets over time. You can claim depreciation on the capital works (structural component) and plant and equipment assets (easily removable fixtures and fittings) of an investment property. 

A bonus of building an investment property is that you can claim every depreciation dollar available. You can claim capital works for a total of forty years, while plant and equipment is claimed over each asset's individual effective life, in the low value pool or as an immediate deduction. 

The effective life of assets will boost your cash flow sooner

Building an investment property gives you the freedom to choose everything from the paint colour to the clothesline. 

Low maintenance is always a top priority, it's also important to keep the effective life of different assets in mind. The effective life of an asset determines the number of years that the asset depreciates across. A shorter effective life generally results in a higher rate of depreciation.

For example, carpet holds an effective life of 8 years and a diminishing value rate of depreciation of 25 per cent. While vinyl flooring has an effective life of 10 years and a diminishing value rate of 20 per cent. This means you can claim more from carpet sooner than you would from vinyl flooring. 

Remember the low-value pool and immediate deduction

There are several incentives that can accelerate depreciation deductions further for new plant and equipment assets. It's important to remember these when deciding on assets to install when building your investment property.

The low-value pool is available for assets that are valued at, or cost, $1,000 or less. When in the pool, depreciation is accelerated.

The immediate deduction is also available for some eligible plant and equipment assets costing less than $300. This means you can immediately deduct the cost of that asset in the year of purchase.

What happens if you live in the property before renting it out? 

While it may be appealing to use new the property yourself before opening it to tenants, it's important to understand the tax implications of doing so. 

Living in the property, even for a very short time, affects what you can claim over the lifetime of the investment. All plant and equipment items will be classed as previously used, and therefore not eligible for depreciation. You won't be able to claim any other deductions for expenses such as interest repayment or insurance for this time, either. 

Get a tax depreciation schedule completed sooner rather than later

It's recommended that you have a tax depreciation schedule completed as soon as your investment property is built and genuinely available for rent. 

This will mean that you can start claiming depreciation sooner. Even if the property is only available for part of the financial year, you can still claim depreciation through partial year deductions. 

Article Credit  - BMT Tax Depreciation is Australia's leading supplier of residential and commercial tax depreciation schedules. 

Contact us today on 07 3800 0807 to assist you with Rental Property Depreciation.

 

Budget Overview 2020-2021


 

 

 

Fringe Benefits Tax - FBT


Fringe Benefits Tax - An Introduction

FBT is paid by employers on certain benefits they provide to their employees or their employees' family or other associates. FBT applies even if the benefit is provided by a third party under an arrangement with the employer.

FBT is separate to income tax and is calculated on the taxable value of the fringe benefit. The employer must self-assess their FBT liability for the FBT year (that is, 1 April to 31 March) and lodge an FBT return.

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits.

The different types of FBT are as follows

  • Car fringe benefits
  • Car parking fringe benefits
  • Entertainment-related fringe benefits
  • Expense payment fringe benefits
  • Debt waiver fringe benefits
  • Loan fringe benefits
  • Housing fringe benefits
  • Board fringe benefits
  • Living away from home allowance fringe benefits
  • Property fringe benefits
  • Residual fringe benefits

Contact us today on 07 3800 0807 to assist you with FBT

 

On 23 September 2020, the Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules (No. 2) 2020 ('the DIT No. 2 Rules') were registered.  It is important to note that there is not a new tranche of alternative tests that entities can apply for JobKeeper 2.0.   Rather, the DIT No. 2 Rules have effectively updated the original alternative tests to recognise that: 

-different dates and timelines now apply;

-current GST turnover has replaced projected GST turnover under the new actual decline in turnover test; and

-entities seeking to participate in JobKeeper 2.0 (who did not participate in JobKeeper 1.0) must still satisfy the original decline in turnover test, which is based on projected GST turnover.  Note that such entities can still satisfy the original decline in turnover test if they are eligible for, and satisfy, an alternative test.

The DIT No. 2 Rules, consistent with the original rules, set out seven classes of entities that are eligible to apply the alternative test relevant to their particular circumstances.  Also, there have been some slight favorable modifications to some of the alternative tests.   

Accordingly, the Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020 (registered on 23 April 2020) have been repealed, effective at the end of 27 September 2020.  

The DIT No. 2 Rules, consistent with the original rules, set out seven classes of entities that are eligible to apply the alternative test relevant to their particular circumstances.  Also, there have been some slight favourable modifications to some of the alternative tests.     

For clarity, Section 3 of the DIT No. 2 Rules provides that the DIT No. 2 Rules apply to JobKeeper fortnights starting on, or after, 28 September 2020 for the purposes of: 

(a) the new actual decline in turnover test (based on current GST turnover) in S.8B of the Rules; and

(b) the modified original decline in turnover test (based on projected GST turnover) in S.8 (and S.8A) of the Rules.

The seven classes of entities identified in the DIT No. 2 Rules are as follows:

1. New businesses

2. Business with a substantial increase in turnover

3. Business with an irregular turnover

4. Business 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

Contact us today on 07 3800 0807 to assist you with Jobkeeper 2.0 under the Alternative Rules.

Contact us...

Shop 20 20-24 Commerce Dr
Browns Plains, QLD, 4118
AUSTRALIA

Phone: 07 3800 0807
Email: Click here

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