Accountants are grappling with a vastly changed operating environment as a result of the COVID-19 pandemic that unfolded this time last year. While this month marks the anniversary of mass change for the accounting industry, it’s also a moment to reflect on the ways accountants have been busy helping clients work through the many incentives and stimulus measures introduced by governments to support businesses throughout the pandemic. Let’s take a look at what’s happening.
Most COVID-19 stimulus payments such as JobKeeper are coming to an end, although the JobMaker Hiring Credit is still available for each eligible additional employee aged between 16 and 35 who businesses hire until 6 October 2021.
It’s worth noting that the corporate tax rate has dropped to 26 per cent for small- to medium-sized businesses for the 2020–21 income year, with the rate dropping further next year to 25 per cent. It’s important to note that this is not confined to small businesses, but any entity below $50 million that does not have a high proportion of passive income. Tax rates are also coming down for sole traders.
From 1 April this year, small- to medium-sized businesses will also be eligible for FBT exemptions for car parking benefits and work-related portable electronic devices. These FBT concessions are also available to businesses between $10 million and up to $50 million turnover.
Additionally, the exemption from STP reporting for small employers with closely held payees ends on 30 June 2021. Closely held payees include family members of a family business, directors of a company and shareholders or beneficiaries. The exemption recognised payments to these groups tended to be outside the normal payroll process.
For instance, many family businesses keep cash in the business rather than pay staff who are family members a salary if it suits them to do so or pay remuneration to their closely held payees on an irregular basis.
“This change is significant for entities that are used to determining closely held payees’ salaries, wages and directors’ fees post-year-end,” says The Tax Institute’s Senior Advocate, Robyn Jacobson CTA.
Generous tax concessions introduced over the past few years for small businesses are also changing. For instance, the $150,000 instant asset write-off available for the purchase of business assets by small businesses with an annual turnover of less than $10 million reverted to $1,000 from 1 January 2021, although this will have no practical effect until 1 July 2022 due to the current full expensing of depreciating assets measure.
As this shows, there are many moving parts accountants and bookkeepers are managing on behalf of their clients in the lead-up to 30 June.
Learn more about the changing tax landscape with Robyn Jacobson
Having been a professional tax trainer for more than 20 years, and in The Tax Institute’s role of Senior Advocate since May 2020, Robyn Jacobson is a highly-respected commentator and thought leader on the Australian tax system. She advocates on behalf of the Institute’s small business members with government and the Australian Taxation Office.
Jacobson is one of the esteemed panellists in the upcoming Pro Power Hour, a new virtual webinar series brought to you by Intuit QuickBooks. These live, 60-minute broadcasts give accounting advisors access to the latest industry news, as well as product updates and demonstrations.
Accountants have never played a more important role supporting their small business clients. Which is why it’s so important to stay abreast of current trends and industry shifts. This event series updates accountants’ understanding of the current trading environment.
“I’m excited to be partnering with Intuit QuickBooks to share my expertise in a digestible, educational format. With so many accountants and bookkeepers having to play multiple roles for their small business clients, having access to free, educational resources like these will add a lot of value.” says Robyn.
The webinar series also coincides with the launch of new benefits for Pro Advisors involved in the QuickBooks ProAdvisor Program. The initiative will give members access to QuickBooks Tax and Advanced Payroll features as well as discounted access to Karbon's implementation and support services. More details about these new rewards will be revealed at the launch of the Pro Power Hour series at 5pm on March 23.
Staying tax fit with QuickBooks Tax powered by LodgeiT
Great accounting and tax software makes all the difference to accounting professionals at the end of the financial year. QuickBooks Tax powered by LodgeiT provides an easy-to-navigate, end-to-end tax management solution to help manage everything from preparing and reviewing clients’ accounts to filing tax returns.
QuickBooks Tax comprises two modules. QuickBooks Online Accountant software is a centralised portal that helps you prepare and review your clients’ books from one place. After you have finalised clients’ accounts, push their data to LodgeiT, which then provides secure, fast and accurate tax preparation and lodgement.
The system includes functionality that allows you to add attachments and notes to provide a paper trail to support decisions about clients’ tax and accounting responsibilities. It also provides unlimited e-signatures to accelerate client approval of their accounts. A multi-layered approach to security helps protect your clients’ data, which is hosted on Amazon’s enterprise-grade servers.
Register now to get tax fit with Robyn Jacobson and skill up with our expert panel. Plus, you have a chance to win tickets to the Australian Accounting Awards 2021 when you register for this event.*