As the New South Wales government shuts down all non essential construction in Sydney for two weeks, tradies across the start are being hit hard financially.
As a self-employed tradie, there are two major things you can do in this period:
- Take advantage of all the financial benefits that the government has made available to people affected by lockdown. More about this can be found in our article here.
- Use this time to get on top of your financial admin for this and last financial year - to ensure they’re getting the right tax relief from the government.
1. Government benefits
For those who experience reduced income during this time, the NSW and Australian governments have introduced a number of measures.
If you haven’t read our article on what financial assistance is available, check it out here.
Here’s a brief summary of the financial support that has been made available:
- If you earn over $75,000 per year as a sole trader or small business and have experienced a decrease in business larger than 30%, then you should apply for the COVID-19 Business Support Grant. You could receive a lump sum payment as high as $15,000 depending on the decrease in business you have seen.
- If you’re a sole trader or small business, then you can apply for the Small Business Fees and Charges Rebate, which can offset up to $1,500 in government fees and charges for eligible NSW businesses. More detail on what can be claimed can be found here.
- If you’re a sole trader or small business with turnover between $30,000 and $75,000 then you could be eligible for the upcoming ‘Micro business grant’ of $1,500 per fortnight. Stay tuned - we expect a detailed announcement of this grant in the next week.
- Individuals who have lost work due to the lockdown, can claim the COVID-19 Disaster Payment as outlined here. You can claim between $325-$600 per event.
2. Using this period to get on top of your financial admin
Here are some key things you can use this time to think about and prepare for.
- Work out your deductions - now is the time to get the shoebox or the drawer in your house where you store all of your receipts, and go through them for the 2021 financial year. Questions you should be answering include: are they tax deductible? Which financial year do they apply to? And do they satisfy the substantiation requirements for the ATO?
- GST Registration - check if you need to register for GST. You need to register within 21 days of your GST turnover (being gross income from all businesses minus GST) exceeding the relevant threshold of $75,000.
- Check in on your super - many self-employed tradies kick their retirement planning down the road, especially early on in their business. However there are real benefits to contributing even small amounts to superannuation every year, such as tax concessions and the opportunity to receive money from the government if you meet certain thresholds.
- Instant asset write off - have you made a big purchase during the year? You may be entitled to an instant asset write off for the purchase of machinery, equipment, and even motor vehicles used in your business. To do so requires you to have all your information together for this.
At times like this we’re reminded how important having your finances under control is.
To understand what government assistance they’re eligible for, sole traders and small businesses must have a good understanding of their income, turnover, and expenses.
Reviewing mountains of invoices, receipts, and paperwork can be incredibly time-consuming and frustrating - and the effects of getting it wrong can have severe financial consequences.
At Hnry, we know you didn’t become a tradie because you’re passionate about accounting. That’s why our philosophy is to automate tax and financial admin for self-employed tradies, so they never have to think about tax again.
As a Hnry customer, whenever you get paid Hnry will automatically calculate, deduct, and pay all of your taxes (income tax, GST, Medicare, and any student loan repayments), before sending the rest of the money to your personal bank account straight away.
As part of the service, our team of accountants will lodge your tax returns with the ATO - whenever they’re due.
You also get unlimited access to our app, where you can easily send invoices, quotes, and raise expenses with the snap of a photo. In the app you can also access the type of information you would need to apply for government grants
If taking control of your financial admin is something you want to do, then get in touch with the team at Hnry today!
Checklist - Government Benefits
- If you earn over $75,000 per year as a sole trader and have seen a decrease in business larger than 30% apply for the ‘COVID-19 Business Support Grant’. This payout can be as high as $15,000.
- If you earn between $30,000 and $75,000 you will soon be able to apply for the ‘Micro business grant’ of $1,500 per fortnight. We expect further announcements from the ATO on this shortly.
- If you are an individual who has lost work due to the lockdown, can claim the COVID-19 Disaster Payment as outlined here. You can claim between $325-$600 per event.
- If you’re a sole trader or small business, apply for the Small Business Fees and Charges Rebate, which can offset up to $1,500 in government fees and charges for eligible NSW businesses. More detail on what can be claimed can be found here.
Checklist - Financial Admin
- Check how much you are going to earn this year, if you are going to earn over $75,000 make sure you register for GST in the near future. Use this downtime to get the paperwork done now so you don’t have to worry about it later.
- Review what your super contributions are. One day you are going to have to retire and it’s a lot easier starting to save right now then it is years down the road. In some cases, you can use super contributions as a tax write off!
- If you have made any large business related expenses in the past year (think a vehicle) you may be able to get all of the tax relief immediately rather than over a period of years,
- Review all your business expenses to make sure you can claim tax relief on any that may be eligible.
* This article is up to date as of the 21th of July, as Covid restrictions change so will this information.