Question:
August 2011 - A day in the tax life of ...
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
... previously on tax life ... Sam was well in control of her responsibilities as executor of her brother Mick’s estate. The family seemed to all be reasonably okay with the estate process thanks largely to the planning and communication that Mick had put in place before his passing.
Covenants
Sam’s business was up and running with orders in-hand and, despite the bank’s last minute shenanigans, the necessary finance package had been negotiated and bedded down.
Powerless!It was time for the quarterly report and calculation of loan covenants for the bank. Although Sam had negotiated hard on the loan security, in the end the bank got its way and there was a second mortgage over their holiday house and also a registered charge over the business trust.
Each quarter Sam had to report the business performance to the bank and calculate and report three separate loan covenant ratios: earnings over interest had to exceed three, total debt over interest could be no greater than three and actual sales had to be at least 85% of budgeted sales. She was required to report the actual and projected profit and loss account, balance sheet and cash flow broken up by month for a year in advance.
“My god this is a lot of work and how intrusive!” she thought. It was necessary to buy special software to calculate and show the monthly figures and for the first report it seemed to take almost two full days to get the reports balanced and finalised. Things were getting more streamlined now but the quarterly process still seemed to stress her out.
“I realise that I have borrowed the bank’s money and I realise that I need to pay it back with interest but they seem to want to tell me how to run the business – and how would they know how to do that!” Sam thought.
Nonetheless she realised that it was necessary to knuckle down and simply do the work and provide the bank with what it required. “I simply have to do this job quickly and I should consider the bank like any valued customer. Find out what they want, deliver it quickly and efficiently and let them know that I am trying my heart out to give them what they want”
… Stay tuned …
