Formic Advisory

We're hiring! Check out our ad on Seek for more information

Senior Accountant Job in Werribee, Melbourne VIC Boutique firm looking for experienced accountant - work close to home, no timesheets, modern firm

We're growing! Formic Advisory is on the lookout for our newest team member.

We're very happy to consider flexible work conditions, though we'd love to find someone who lives near Formic HQ, in Melbourne's west

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Experienced Accountant - relaxed culture, flexible working Job in Melbourne You have at least 5 years’ experience in business services, ideally in mid-tier firms or quality suburban practice, where you’ve dealt primarily with small business and high net-worth clients. Technical competence is expected and non-negotiable

After a "softly softly" approach to debt enforcement and collection over the last 12 months, the ATO has confirmed that they are returning to business as usual, as of the end of March. This also includes penalties if you've been especially naughty.

We CAN tell you however, that they're actually pretty good at entering into payment arrangements. Of course, it's a good start if you've got all your lodgements up to date.

Worried about outstanding tax debt, or behind on your lodgements? Talk to the small business experts at Formic Advisory!

JOBKEEPER - IT'S ALMOST OVER

Sunday 28 March 2021 - it's a significant day in the calendar. Not only is it National Black Forest Cake Day for our American friends, but it also marks the last day of the JobKeeper scheme.

If you're still claiming JobKeeper, do you know what your business might look like after it finishes? Maybe you need some help modelling the financial future of your business in the short- and long-term. If this sounds like you, give us a shout out

MORE MONEY FOR VICTORIAN BUSINESSES!

The Victorian Government has announced ANOTHER rescue package, this time $143m for businesses directly impacted by the recent 5 day "circuit breaker" action.

✅Lost bookings
✅Perished food
✅Hospitality
✅More travel vouchers

More details coming soon. When in doubt, talk to the team at Formic Advisory

TAX CUTS ARE ON THE WAY

Tuesday night saw the Federal Budget handed down by the Morrison Government - and boy did they have the chequebook out! (For those under the age of 25, Google that).

First and foremost on the agenda: Personal tax cuts! Those earning up to $45k can expect an extra ~$20 in their weekly pay, and those earning up to $120k a further $26 on top of that.

Just in time for Christmas too...

STAGE 3 GRANTS INCOMING... OR ARE THEY?

The application process is officially open, for the Third Stage of the Victorian Government Business Support Fund. Businesses with up to $10m payroll can access grants up to $20,000...but only for those in specified industries.

A list of eligible industries is below and spoiler alert... It isn't as broad as you might have hoped.

MORE GRANTS - THIS TIME, FROM... FACEBOOK??!!

Yes you read that right - we flagged this a couple of months ago, but Facebook has officially come to the party with grants for small businesses.

- $4,000 cash grants (whether your business has a page or not!)
- Optional $2,400 ad credits

What's the catch?!

- Only available to specified suburbs in Sydney/Melbourne
- It's a "competitive" process (ie not a free-for-all - it'll be "judged")
- Been in business for over a year
- Must have between 2 and 50 employees as of 1 January 2020

If your accountant isn't telling you about these things - isn't it about time you found one that did??!! Talk to the at Formic Advisory.

MORE MONEY FOR VICTORIAN BUSINESSES

Although it is clearly not yet "time to get on the beers", Dan Andrews & Tim Pallas this week unveiled yet MORE support for struggling Victorian businesses, to the tune of $3 billion.

✅Extension of payroll tax relief
✅Targeted support for licensed bars and venues
✅Another expansion of the Business Support Fund, worth $10-$20k to eligible employees
✅$20m for small businesses to "build their digital capabitility" (whatever that means - presumably sprucing up your website and/or e-commerce infrastruture)

🙄Grants of up to $3,000 for sole traders

EARLY TAX CUTS ON THE WAY?!

Remember when the pandemic forced the Federal Government to delay this year's Budget, from May 12 to October 6? That's suddenly not far away!

The Treasurer has dropped some big hints on what we can expect to see and (for those who don't like paying tax, anyway), it's good news: tax cuts that were to begin from 1 July 2022, are likely to be brought forward.

There will no doubt be other tax-related "concessions" and incentives as well; we're positively shivering with anticipation...

*The taxman could soon be lodging your BAS for you!*

In a speech last week, the Tax Commissioner decided that locusts and murder hornets weren't enough for us to deal with this year, and put his hand up to help businesses lodge their Business Activity Statements in the not-too-distant future.

Do you really want the taxman lodging your BAS for you?! Didn't think so.

Ask us about a customised bookkeeping solution that can help you ditch paper, create efficiency, and get up-to-date and meaningful insight into how you're tracking.

JOBKEEPER REVISED - MORE PEOPLE ELIGIBLE!

While recent focus has been on JobKeeper 2.0 (which runs from the end of September 2020 to March 2021), we were pleasantly
surprised in the last few days when a revision to the current JobKeeper scheme was announced.

Under previous rules, employees on the books at 1 March 2020 (and subject to certain other conditions, such as being long-term casuals, or Australian citizens at the time), were eligible employees under the scheme.

Now? 1 July 2020 is the magic date. Employers should re-assess their staff ASAP, as they need to get paperwork sorted pronto!

(Note this is quite separate from the proposed changes for JobKeeper 2.0, which are yet to be legislated)

YOU GET AN EXTENSION, YOU GET AN EXTENSION... EVERYONE GETS AN EXTENSION!

Unless you've been living under a rock, you've probably heard about JobKeeper - and that it's being extended (was originally scheduled to finish at the end of September 2020, but now will run an extra 6 months).

For those in Victoria, the good (?) news is that the timeframe for accessing the HomeBuilder scheme is also being extended. Previously you had until 31 December 2020, and had to begin construction within three months. Thanks to our stage 4 restrictions, we get an extra 3 months on top of that.

JOBKEEPER 2.0 - CHANGES ON THE WAY??!!

When the Treasurer announced the rules for the new JobKeeper scheme (to begin 28 September), a few weeks ago, one of the conditions was that businesses had to have suffered sustained drops in income.

We didn't love it at the time, but were hopeful this might change by the time the rules were actually written.

For Victorian businesses in the midst of stage 4 restrictions - Jonathan Swan is all of us.

Thankfully the Treasurer has flagged a "rethink" of the eligibility rules. Watch this space!

"CAN'T I JUST TELL MY CUSTOMERS NOT TO PAY ME, SO THAT I QUALIFY FOR JOBKEEPER?!"

Unfortunately we've heard this one more than a few times; naturally when the Government provides an incentive that requires you to have dropped top-line revenue by 30%, people will try to find a way to make sure they do precisely that.

In case you're curious, the penalties range from financial (repay the amount you improperly obtained PLUS penalties and interest), to imprisonment (Up to 12 months for "less serious" offences, 10 years for severe breaches).

Do you REALLY want to meet Bubba??!!

MORE JOBKEEPER! OR IS IT...

Good (ish) news, with the Federal Government announcing the extension of the JobKeeper scheme.

✅It'll now run all the way through to March 2021
❌The payments reduce in October
❌...and again in January
👀 Different rates of subsidy for staff working more or less than 20 hours per week
🤷‍♂️Maybe harder to access, depending on how much your business has bounced back
👨‍🎓You still need to be a genius to understand all the ins and outs

To work out whether your business will continue to qualify, and if so how much you'll receive (AND the impact that'll have on profitability and cash-flow), ask the small business experts at Formic Advisory

JOBKEEPER - ONCE YOU'RE IN, YOU'RE IN

We've had plenty of enquiries around this one -
"Business definitely dropped more than 30% in April, but now things have bounced back and I'm actually doing better than before!" (or at least, all before Lockdown 2.0".

The good news is that once you're in, you're in; if at ANY point you qualified for JobKeeper, you're eligible to continue claiming it until the scheme ends in September 2020.

Some have separately asked whether they SHOULD, on "moral" grounds. Unfortunately that advice goes well beyond what we're qualified to advise on...

FACEBOOK TO THE RESCUE?!

In news that, in hindsight probably shouldn't come as a shock and was probably inevitable, Facebook itself is giving out grants to eligible small businesses.

The scheme has been live in the USA for a few months now but is finally coming to Australia. The grants are likely to be some combination of cash grants and advertising credits, and to qualify your business needs to:

- Have 2-50 employees
- Been in operation over 12 months
- Experienced challenges during 2020 as a result of COVID-19
- Be located in or near Sydney/Melbourne (sorry, regional folks!)

More info here: https://www.facebook.com/business/boost/grants

WHAT NEXT FOR VICTORIAN BUSINESSES?

And so we find ourselves back in lockdown - what further Government support can we expect?!

We'll know hopefully soon enough - to give you some insight as to what's potentially on the horizon:

✅Extension to JobKeeper scheme (Maybe geographical and/or inudstry-based)
✅Bringing forward personal tax cuts that are slated to come into effect on 1 July 2022
❓ Victorian Government support

As soon as we know, you'll know

COMPANY TAX CUTS ARE HERE!

We're pretty sure that Australian company tax cuts don't form part of Kanye's 2020 election platform but it's good news for Aussie small businesses - they're here!

From 1 July 2020 the tax rate for eligible Australian companies - basically those with turnover less than $50 million, carrying on a business - is 26%, down from 27.5% last year.

Whether future cuts (that have already been legislated) - a further cut, to 25%, is scheduled to follow on 1 July 2021 - will come to fruition, remains to be seen.

MORE FREE MONEY!

Having supported businesses in the early stages of COVID-19 with everything from payroll tax relief to cash grants, the various state governments have recently announced further "kickstart" support programs.

These are to assist in rebuilding and reopening; anything from business advice, to cleaning and investing in website upgrades. Some are broadly available, some are industry specific (WA), and some are for recently locked-down suburban businesses (Vic).

Links to the various state pages in the comments below - it's also worth checking your local council websites (in particular for regional areas), as they are also offering grants and support.

Happy New Year!

If you're looking for further proof that accountants are smarter than everyone else, ponder this: We've basically decided that 2020 was such a crappy year, we've already moved forward into 2021!

Yes, that's right - we're officially in the 2021 financial year.

The next 6 months in particular, promises to be very interesting. We'll keep you updated with all the news you need to know, for you and your business.

The ATO is giving us 4 cents! Don't spend it all at once...

Ok so they're actually giving us a LITTLE bit more than that; from 1 July 2020 the "cents per kilometre" method for claiming work-related motor vehicle deductions, is increasing from $0.68 per km to $0.72.

The cents per kilometre method is a popular method for its administrative simplicity. But the deduction is capped at 5000 kilometres, or $3,600. With a bit of effort, and the right advice, you could be entitled to a LOT more.

Ask the experts at Formic Advisory how!

You could almost be forgiven for thinking it was Christmas - because the ATO has given us another gift this week.

Yep... the depreciation cost limit (ie the maximum amount you can actually claim for a car, regardless of how much it actually cost), has increased! It last went up to $57,581 from 1 July 2016, where it has sat until now. On 1 July 2020, it goes up to $59,136.

Given that you can claim 1/11th of this amount (or $5,376) back in GST, this means you can start looking at cars costing in total $64,512.

Remember when we told you about the $150,000 instant asset write-off? (That's where you get a tax deduction for the FULL purchase price of assets, instead of claiming depreciation over a number of years).

Good news today: It's been extended! The existing rules allowed a limit of $150k up to 30 June 2020, dropping to $1000 thereafter (yes!).

You now have until 31 December 2020, to make that purchase.

So if you were thinking of renewing a business vehicle (or fleet), or investing in a piece of new equipment, but just needed a few extra months to get back towards pre-COVID trade - your wish has been granted.

Need more info? Contact the small business experts at Formic Advisory

*1.99% finance offers - are they as good as they look?*

Heading in to the end of financial year, car dealers are offering anything from "limited editions" (i.e paint and stickers), to seemingly low finance rates, to entice customers into their showrooms.

But how do these finance rates REALLY work?

Often - but not always - the dealer is less willing to budge from the listed price of the car. They have to make their money somehow! (Sometimes they have higher establishment fees too)

Below are three purchase scenarios for the same car:

Car 1: Buying at list price @ 1.99% finance
Car 2: Buying at list price @ 3.99% (an indicative rate for non-dealer finance deals)
Car 3: Getting your own finance @ 3.99% and negotiating the purchase price to $46,000

Knowledge is power - getting your own finance can definitely be worthwhile!

Wanna know more? Get in touch with us at Formic Advisory and Formic Debt Solutions

We take a break from our usual COVID-19 business support-related news, to bring something maybe almost as significant: The news that casual employees in Australia could be entitled to paid leave entitlements, according to a recent landmark court case.

"But aren't they paid more, to compensate them for NOT getting leave, so they'd be double-dipping?!", say employers around the country.

Well, yes.

We've long said the COVID-enforced slowdown is a great opportunity for businesses to take stock and review all facets of their business. This is another such aspect that should be carefully reviewed.

"What the hell is going on with the bank??!!"

Part of our job here at Formic HQ is not just to give general business and tax advice, but also help our clients manage their funding requirements through Formic Debt Solutions.

A client was recently looking to purchase a car - a process that normally takes about 7 days from application through to receipt of funds (and delivery of car!). We're now sitting on day 14 and although we've gotten approval, we haven't yet signed paperwork.

Why the delay? Partly due to a query from the Credit Manager within the bank - whose job it is to review financial statements - who asked us "What does NCL next to that Liability account mean?"

The liability in question was listed under Non-current liabilties... For those whose job it ISN'T, to review financial statements, NCL stands for "non-current liability". Accounting 101.

Welcome to our current banking system!

Who doesn't love a long lunch - right?!

But did you know, that although a genuine expense especially as clients can sometimes be won and lost over a beer (or ten) - entertainment is actually NOT DEDUCTIBLE!

Client entertainment is never deductible, but employee entertainment IS deductible - but only if you pay Fringe Benefits Tax (FBT) on it. If you don't like it, you can blame Mr Keating back in 1986.

One proposal currently being thrown around to help the decimated hospitality industry's post-COVID economic rebuild, is to remove that FBT obligation and make entertainment deductible again.

How good would that be?! Watch this space!

JOBKEEPER IS HERE!

We've had clients receiving their JobKeeper payments yesterday and today - hopefully they are the shot in the arm that their business needs to help them survive these difficult times.

If you still haven't registered, because maybe you're not sure if you're eligible - shouldn't you be getting professional advice?

*Appreciation post*

It's fair to say there's a bit going on in the business/tax world at the moment. We're working 7 days a week (and have been since that fateful announcement on 12 March 2020!), at Formic HQ:

- Wrapping our heads around the labyrinthine rules and regulations surrounding the various Government support offerings
- Ensuring all our clients understand them, and assessing their eligibility
- Helping them implement/enrol as required

There's many reasons we do what we do - and the image below is a perfect example. It arrived in yesterday's mail, along with a small but incredibly personal and thoughtful gift, from one of our valued clients.

It certainly put a big smile on this business advisor's face!

*JobKeeper - you have more time to register!*

As of Tuesday, around 540,000 registrations have been received, in advance of Thursday's (30 April) deadline. But still more confusion exists for some employers and employees as to their eligibility.

The good news - you now have until 31 May to register to participate in the first "JobKeeper fortnights" beginning 30 March, albeit you need to pay your staff prior to 8 May. Simple really.

If you're as confused as most, talk to your accountant. Of course, if your accountant hasn't already reached out to you, are they even your accountant?! Talk to Formic Advisory.

JobKeeper - 60% of the time, it works EVERY time!

You've probably heard plenty about the JobKeeper program by now, and how it potentially is not available to some businesses who for example didn't exist in March 2019, where a business needs to have suffered a 30% drop in revenue from this year to last year.

There's good news - we have Alternative Tests! These may apply to:

- Startups
- Merged businesses/acquisitions
- High growth businesses
- Drought or natural disaster-affected businesses
- Plus some other weird and wonderful scenarios

Of course, it's all confusing AF, so if you need to know whether you'll qualify or not, get in touch

JOBKEEPER IS HERE!

Registrations opened yesterday (but fear not, you have until 30 April to register to receive the first batch of payments). But is the JobKeeper scheme all its cracked up to be?

It misses out on a LOT of people using some pretty standard business structures, as well as Government-owned entities. It also potentially places a significant cash-flow burden on employers.

If you're a business owner and don't know all the ins and outs, you need to, and quick-smart too. Reach out to us for the right advice.

Unless you've been living under a rock - or taken "lockdown" to an extreme level - you've probably heard that the Government is handing out money. Lots of it. To try and help business get through this.

But how do you know what's available, how to access it, and how it all works? I'm glad you asked.

We're running a FREE webinar on Thursday 16 April at 10:30. Click it. The survival of your business might just depend on it!

https://zoom.us/webinar/register/3715868320098/WN_0zvJ9C9lQDGrtT5dtZlmeg

FREE WEBINAR COMING UP!

Struggling to stay on top of the various support packages available to businesses? Then sign up to our free webinar.

We'll go through the packages at federal, state, and local government level, with some practical tips to ensure you understand what everything REALLY means.

If you're running a business you don't want to miss this.
Sign-up link in comments below.

The ATO is coming to the party, "relaxing" the rules around working from home.

Ordinarily a rate of $0.52 per hour (I know it's not much but it can add up, and every bit helps!), can be claimed to cover utilities and the like. Other things such as phone/internet costs, depreciation of a computer, can also be claimed.

The 'new' - TEMPORARY - method the ATO is now permitting, is $0.80 per hour to cover all the items mentioned above.

For more info check the ATO link (or contact the experts at Formic Advisory, of course!)

https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/

HOW BUYING A NEW CAR CAN IMPROVE YOUR BUSINESS CASH FLOW

We've had some enquiries as to exactly how the newly announced (expanded) instant asset write-off (IAWO) works, and how it can improve a business's cash flow. Remember, poor cash-flow is what sinks businesses, NOT a lack of profit. (The two aren't always the same).

The write-off gives you an immediate tax deduction (instead of claiming a depreciation over a period of say, 8 years), for eligible assets. A car can often be an eligible asset.

So here's an example of how buying a car, can impact your short-term cash-flow. (No, we're not advocating that you rush out and buy a car you were otherwise not considering purchasing!)

This is a general illustration only and results will vary depending on your borrowing interest rate (5% in the example), applicable tax rate (27.5% in the example). Negative numbers are cash savings - real inflows. In this example you're almost $10k ahead over the first 12 months.

if you'd like to know more, we can help you. The team at Formic Debt Solutions can also assist you in obtaining finance.

We like to promote our clients where we can. Sometimes it's sharing useful business-related information they've passed on, and other times such as this, it's that they're just awesome people.

Shout out to the team at Mity Digital for the "care package" that arrived at Formic HQ this morning.

We've said it before and we'll say it again, for all your website related needs please check them out. Some local councils are offering cash grants to assist with website development and in particular e-commerce so if you haven't considered going down that path, what are you waiting for?!