In addition to the stimulus package announced on 12th March to support businesses during the coronavirus, Prime Minister Scott Morrison has announced further measures in an attempt to bolster the Australian economy during these tough times. As always, not all of the finer details have been announced as yet, but below is a summary of the key points which may benefit your business.
- The government announced on 12th March assistance for employers (with a turnover of up to $50 million) by way of crediting 50% of employee’s tax withheld. They have now increased this to 100% of employee tax liabilities for the March 2020 and June 2020 quarters, up to an amount of $50,000.
- They will also match this amount claimed in the period July to October 2020, so up to another $50,000.
- Eligible businesses that pay salary and wages will receive a minimum payment of $10,000 in the first period, and another in the second period, even if they are not required to withhold tax.
- The ATO will automatically calculate the payment you are entitled to based on BAS’s lodged and the amount will be credited to your Activity Statement account.
Supporting apprentices and trainees
- The government will offer employers a wage subsidy of 50% of an apprentice’s or trainee’s wage over the 9 month period from 1 January 2020 to 30 September 2020. This is capped at $7,000 each quarter per each eligible apprentice or trainee, or $21,000 per apprentice over the period. Businesses with less than 20 full-time staff will be eligible, however employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy. You will be able to apply for this from April onwards after an assessment is undertaken by your apprenticeships provider. Please contact them directly for more information.
Payroll Tax exemption
- Small and medium businesses will be exempt from Victorian Payroll Tax for the 2020 financial year, with the SRO due to commence refunding Payroll Tax payments since 1 July 2019 from next week, and no payment will be required for the remaining quarters.
Support for immediate cash flow needs of small businesses
- The government will guarantee 50% of unsecured loans small business loans of up to $250,000
Temporary relief for financially distressed businesses
- The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent.
- The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Increasing the instant asset write-off and accelerating depreciation
- The government is proposing to increase the threshold for the instant asset write off from $30,000 to $150,000 and expand access to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available for new or second-hand assets purchased from 12 March 2020 to 30 June 2020.
- The government is proposing an accelerated deprecation deduction for eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50 per cent of the cost of the eligible asset on installation, with existing depreciation rules applying to the balance.
Access to superannuation
- The Government will allow affected individuals to access up to $10,000 from their superannuation in the 2020 and 2021 financial years. People will not pay tax on the money they access, and withdrawals will not affect Centrelink payments.
- There will also be a temporary 50-per-cent reduction in superannuation minimum drawdown requirements for account-based pensions in the 2020 and 2021 financial years.
ATO Support to those affected by coronavirus
- Businesses impacted by the coronavirus are encouraged to get in touch with the ATO to discuss relief options. Options available to assist impacted businesses include:
- Employers will still need to meet their ongoing super guarantee obligations for their employees.
- Unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented.
- Anyone impacted by COVID-19 should contact the ATO to request assistance on its Emergency Support Infoline 1800 806 218.
We will be undertaking tax planning for our business clients in April and May for the 2020 financial year, and we strongly recommend you consider taking up this service from us, to ensure you maximise what you’re entitled to from the government.
For further reading, you can download the relevant fact sheets from The Treasury Support for Business website.
Again, if you have any concerns over the health and safety of your staff, or their rights, we recommend contacting Lee or Tegan from HR Dept
||03) 6289 8955
If you would like more information on how these measure impact you and your business, please contact your relationship manager, or email our office at email@example.com and a staff member will be in touch with you to discuss.