We have experienced a sharp increase in energy bills over the past years – Geelong businesses and households alike.
Unfortunately, replacing government-controlled systems with private companies has made the cost of energy soar. Due to energy bills eating into our budgets more than we can afford, many Australians are opting for a more eco-friendly approach; solar panels.
As of the 19th August, 2018, the Victorian State Government has agreed to spend up to $4550 per household to help homeowners afford solar panel installation. A total of $1.24 billion will be put towards this incentive. What has been labelled The Small Caps incentive, could save Victorians up to $900 per year on power bills! As ‘sensible’ accountants, we would suggest to pop this in your savings account but let’s be honest – you’re probably going to grab that jacket or boots you have been eyeing off!
Due to the Geelong housing boom, the solar panel industry has already experienced an increase in orders and installation. Each new estate, whether it be Armstrong Creek or Curlewis, looks more like a space station from above than a suburb! Using solar panels is fantastic not only for our budgets and the environment, but also for Geelong energy-providing businesses that specialize in installing and selling solar panels. If you own a Geelong solar panel business, you may see your business transform from go to WHOA due to the combination of the housing boom and the new solar panel scheme.
If you have a solar panel sales or installation business, it is important to think about how this scheme will affect your finances and processes. Can your home-bookkeeping withstand the increase in transactions? Perhaps you would like to hire employees but aren’t sure where to start with wages and super, or maybe you would like to review your tax accounting. Book an appointment with your local Geelong accountant, Next Level Accountants to have all your questions answered and plan for the future.
If you neglect to plan early on, this can cause you to be unaware of how much money to put aside to pay an income tax debt that may arise from the boom. This debt does not have to be paid until 12 months after the year finishes, however, it can potentially put you back financially and create unnecessary stress.
Once the first big tax return is lodged, and you end up with a whopping tax debt of, say, $20,000, the ATO would put you on the PAYG Instalment program. They would then request you to pay $5000 each quarter for the year that hasn’t even finished yet, which needs to be paid at the same time as your GST bill. All of this can happen even before you haven’t needed to pay that first big tax debt.
Finances become even more complicated if you are wanting to hire new or extra employees during this time. Once you hire employees, cashflow becomes an extra stress as you are expected to pay your employees regularly along with Superannuation obligations and increased Workcover premiums.
Next Level Accountants specialise in small business accounts, assisting SME’s to plan and prevent unexpected ATO debts and ensure that employment elements are up to date. Our services cover bookkeeping, tax accounting and VCFO for businesses around Geelong and surrounding suburbs.
You can find frequently asked questions about the solar panel scheme here.