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Pre June 30 | Cashflow Planning for Dental Practices

Commentary on the Australian Government’s Economic Stimulus Package

By Heath Stewart | Director | ECOVIS Clark Jacobs Email | heath.stewart@ecovis.com.au

I started work in an accounting practice in the 90s in a time before widespread use of mobile phones, email and the internet. We shared a computer between three staff, and interaction with the Australian Taxation Office (ATO) was predominantly via facsimile and traditional mail. If the COVID-19 pandemic had hit then, Australia would have been in real trouble.

Are there businesses and individuals who have fallen through the cracks? Absolutely.

Are there problems with the programs?

Without a doubt. However, speaking as a Director of business helping to administer the programs, overwhelmingly most of the needy have been recipients of stimulus payments with an expediency undreamt of 20 years ago.

Politics aside, the Australian Federal Government and the ATO are doing an outstanding job with the administration of the Coronavirus economic stimulus package.

Australia has some of the most sophisticated interaction in the world between employers, employees and the Government. Further, the Government cleverly chose to deploy most of the stimulus payments to business “customers”, of which some 1 million have some form of eligibility for the various programs, versus engaging with the entire population of Australia – 25 million “customers”.

As also noted, the ATO are doing an outstanding job of implementing the necessary administrative measures. The degree of sophistication and readiness they have shown in terms of identifying noneligible, false and untruthful registrants of the programs has been quite impressive. For all taxpayers this is heartening.

It is also an eminently reasonable argument that it is broadly “fair” that businesses eligible for stimulus payments should shoulder some of the administrative burden to deploy the programs via their payroll systems. The critical link between business and employee is maintained; with welfare the employment nexus is broken.

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There is no room in this article for me to go into a large amount of detail on the JobKeeper program or the cashflow boost program, however I will direct everyone who is still unsure of certain applications of the key programs to contact their accountant urgently. The Australian Government has an excellent resource page which links all of the programs together, both Federal and State, the link of which is https://www.business.gov.au/.

Take Advantage of the Instant Write Off Scheme With the end of the financial year fast approaching, getting your finances in shape will be top of mind for many busy practitioners. We understand that managing your finances, while continuing to run your practice and care for patients can be a difficult task. To help make the lead up to 30 June as smooth as possible, BOQ Specialist has identified some key ways to turn these challenges into opportunities.

“If you’re a practice owner, June is the perfect time to examine your equipment needs”, says Gavin Brandenburger, Head of Product at BOQ Specialist.Economic “This is not only to Package ensure that your practice Some Commentary on the Australian Government’s Stimulus retains a competitive edge and continues to grow, but so you can make the most of the current tax deductions available to you.

I started work in an accounting practice in the 90’s in a time before wide spread use of mobile phones, email and the internet. We shared a computer between three staff, interaction with the Australian Taxation Office was predominantly via Facsimile and traditional mail. If the COIVD-19 pandemic had hit then, Australia would have been in real Tax Benef its trouble.

Politics aside, the Australian Federal Government and the Australian Taxation Office are doing an outstanding job of the administration of the economic stimulus package. Australia has some of the most sophisticated interaction in the world employers, employees Therebetween is no better time to take advantage and theFROM Government. Further, the Government cleverlyto chose to deploy of the increase the instant asset writeUP TO most of the stimulus package to business “customers”, of which some 1 off initiative.

Businesses with an aggregated million have some form of eligibility to theturnover various of programs, engaging less thanversus $500 million are now with the entire population of Australia – 25 million “customers”. able to write-off eligible assets up to the It is also an eminently reasonable argument that it is broadly that business who are they are value “fair” of $150,000 each, provided eligible for stimulus payments should shoulder some offirst the installed administrative burden to deploy and ready for use between 12 the programs via their payroll systems. The critical link between business employee March 2020 and 30and June 2020. is maintained, with welfare it is broken.

Are there businesses and individuals who have fallen through the cracks ? Absolutely. Are there problems thetax program ? without a doubt,could however, speaking a Director By offering anwith instant deduction, this scheme be a simple andaseffective wayofto improve business helping administer the program, overwhelmingly most of the needy have been the cash flow of your business, in addition to providing a boost in activity in your practice. recipients of the stimulus packages with an expediency undreamt of 20 years ago.

AsSubject also noted, the Australian Office areit’s doing an outstanding of administration. to further action byTaxation the Government, expected the instantjob asset write-off threshold will The degree of sophistication and readiness they have shown, in terms of identifying non- of up to drop from $150,000 down to $1,000 (and will revert to small businesses with a turnover eligible, false and untruthful registrants of the programs has been quite impressive.

As $10 million) from 1 July 2020. taxpayers all of us, that is heartening.

There is no room in this article for me to go into a large amount of detail on the job-keeper program and or the cashflow boost program, however I will direct everyone that is still unsure of certain applications of theWhat key programs to contact their accountant urgently.

Assets Are Eligible?

The Australian government has an excellent resource page which links all of the programs together both Federal and State, the link of which is https://www.business.gov.au/ .

$30K

$150K

As a general guide, dental equipment and any physical assets that relate to a practitioner’s business are included in the scheme. There are a small number of assets that are excluded.

Therefore, we strongly recommend you consult your tax adviser first to determine which items will fit the criteria.

This $150,000 threshold applies on a per item basis (without any limitations on the number of items). It applies to brand new or second-hand assets that are first used or installed ready for business use between 12 March 2010 and30 June 2020. Businesses must purchase and own the asset, however, financing the purchase via an asset purchase or chattel mortgage, credit card or overdraft/line of credit is also acceptable.

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Scenario | Instant Write Off Scheme

Scenario

•

Dr Jason Smith owns a three chair dental practice with an turnover of $1.5 million

• He purchases and installs a new CBCT unit for $100,000 30 June 2020 Some Commentary on the Australian Government’s Economicbefore Stimulus Package • Before taking into account any depreciation deductions for this new CBCT unit, I started work in an accounting practice in the 90’s in a time before wide spread use Dr Smith’s FY20 net profit would be $450,000 with tax payable of $123,750 of mobile phones, email and the internet. We shared a computer between three staff, • Under with the instant asset write-off scheme, an immediate deduction of $100,000 for interaction the Australian Taxation Office he wasclaims predominantly via Facsimile and traditional mail.unit If the COIVD-19 pandemic had hit then, Australia would have been in real the CBCT trouble.

• His net profit reduces to $350,000 with tax payable of $96,250 Politics aside, the Australian Federal Government and the Australian Taxation Office are doing an outstanding job of the administration of the economic stimulus package. Australia has some of the most sophisticated interaction in the world between employers, employees and the Government. Further, the Government cleverly chose to deploy most of the stimulus package to business “customers”, of which some 1 million have some form of eligibility to Benef its the various programs, versus engaging with the entire population of Australia – 25 million “customers”.

It is also an eminently reasonable argument that it is broadly “fair” that business who are eligible for stimulus payments should shoulder some of the administrative burden to deploy • programs Allows you immediately write-offThe thecritical cost oflink each asset that costs and less employee than $150,000 the viatotheir payroll systems. between business is • Improves cash flow in your business by bringing forward tax deductions and reducing how maintained, with welfare it is broken.

Are there andinindividuals who have fallen through the cracks ? Absolutely. Are muchbusinesses tax you owe FY20 there problems with the program ? without a doubt, however, speaking as a Director of • Frees up resources to invest back intooverwhelmingly your business and generate growthhave been business helping administer the program, most of the needy • New CBCT boost activity in undreamt your practice recipients of the machine stimulus providing packages awith an in expediency of 20 years ago.

As also noted, the Australian Taxation Office are doing an outstanding job of administration.

The degree of sophistication and readiness they have shown, in terms of identifying noneligible, false and untruthful registrants of the programs has been quite impressive. As taxpayers all of us, that is heartening.

There is no room in this article for me to go into a large amount of detail on the job-keeper program and or the cashflow boost program, however I will direct everyone that is still unsure of certain applications of the key programs to contact their accountant urgently.

The Australian government has an excellent resource page which links all of the programs together both Federal State, the link of which will is https://www.business.gov.au/ . be The expanded instantand asset write-off concession end on 30 June 2020. It would worthwhile, therefore, to consider what assets you may wish to acquire and claim before the end of this as well as next financial year. Many dental practices will fit the criteria to benefit from the tax break—all you need to qualify is an Australian Business Number and a turnover of less than $500 million.

“In response to current challenges facing Australian businesses, these tax concessions may be a simple way to boost the health of your practice and set yourself up for the future. It is important for practice owners to ascertain if this is right for their particular circumstances and then move quickly to take advantage before the deadline,” concludes Brandenburger, Head of Product at BOQ Specialist

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Equipment Finance

Update your practice with the latest technology and ensure that your business retains a competitive edge and continues to grow.

Some Commentary on the Australian Government’s Economic Stimulus Package I started work in an accounting practice in the 90’s in a time before wide spread use of mobile phones, email and the internet. We shared a computer between three staff, interaction with the Australian Taxation Office was predominantly via Facsimile and traditional mail. If the COIVD-19 pandemic had hit then, Australia would have been in real trouble.

Politics aside, the Australian Federal Government and the Australian Taxation Office are doing an outstanding job of the administration of the economic stimulus package. Australia has some of the most sophisticated interaction in the world between employers, employees and the Government. Further, the Government cleverly chose to deploy most of the stimulus package to business “customers”, of which some 1 million have some form of eligibility to the various programs, versus engaging with the entire population of Australia – 25 million “customers”.

It is also an eminently reasonable argument that it is broadly “fair” that business who are eligible for stimulus payments should shoulder some of the administrative burden to deploy the programs via their payroll systems. The critical link between business and employee is maintained, with welfare it is broken.

Are there businesses and individuals who have fallen through the cracks ? Absolutely. Are there problems with the program ? without a doubt, however, speaking as a Director of business helping administer the program, overwhelmingly most of the needy have been recipients of the stimulus packages with an expediency undreamt of 20 years ago.

As also noted, the Australian Taxation Office are doing an outstanding job of administration.

The degree of sophistication and readiness they have shown, in terms of identifying noneligible, false and untruthful registrants of the programs has been quite impressive. As taxpayers all of us, that is heartening.

There is no room in this article for me to go into a large amount of detail on the job-keeper program and or theNO cashflow boost program, I will IN direct everyone RE PAYME NTS howeverNO TERES T that is still unsure of certain applications of the key programs to contact their accountant urgently.

The Australian government has an excellent resource page which links all of the programs together both Federal and State, the link of which is https://www.business.gov.au/ .

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Learn more at morita.com.au or contact Henry Schein for a no obligation consultation.

Terms & Conditions: Offer only valid from 22/05/2020 to 30/06/2020. Henry Schein reserves the right to withdraw the offer at any time without notice. Finance is provided by BOQ Specialist - a division of Bank of Queensland Limited ABN 32 009 656 740 Australian credit licence no. 244616 (“BOQ Specialist”). Documentation fee applies. Finance is subject to credit assessment criteria. Terms, conditions, fees and charges apply. BOQ Specialist reserve the right to cease this offer at any time. Subject to finance approval. Customers may elect to finance equipment purchases via alternative finance providers on the understanding that these finance offers will not apply. BOQ Specialist accepts no responsibility for warranties, servicing, or rebates, or for the accuracy, completeness or timeliness of the information for the assets. * Mocom Futura: Limited stock and subject to confirmation – installation/validation not included. Warranty: 3 years or 3000 cycles. Planmeca Compact iClassic: Price based on a 5 year loan, 5 day week and 48 week year.

Please note, $33 per day estimate is sufficient to choose a typical Planmeca Compact iClassic dental units.

Contact our sales team to see how far your dollar can stretch. This estimate will vary depending on your financial position, state in which the business is located, final package cost and prevailing finance cost. Please consult your financier and accountant and assess costs before purchasing the equipment. Small Equipment Bundles don’t include installation - limitted stock.

Disclaimer: Any information is of a general nature only. BOQ Specialist has not taken into account your objectives, financial situation, or needs when preparing it. Before acting on this information, you should consider if it is appropriate for your situation. BOQ Specialist is not offering financial, tax or legal advice. You should obtain independent financial, tax and legal advice as appropriate.