Here is an outline of the Coronavirus stimulus package proposals made by Scott Morrison this week to help Australians weather the economic impacts of Coronavirus. Importantly this package is a proposed package and the changes are not yet in effect until passed into Legislation.
Instant Asset Write Off
Currently the instant asset write off is $30,000 for small business. This will be increasing to $150,000 for all businesses with a turnover of less than $500 million. What this means is the whole asset becomes immediately deductible in your tax return, and does not need to be depreciated.
This measure would apply from 12 March 2020 to 30 June 2020, for new and second hand assets once Legislated. The Government hopes this measure will ward off recession and hopefully boost consumption by bringing forward investments in cars and industrial equipment.
This applies to equipment such as cars, utes, kitchen equipment, office assets and many more items. If you are thinking about purchasing any types of assets please get in touch to discuss.
Small Business Cashflow Assistance
1. PAYG Withholding Credits up to $25,000:
The ATO will be giving tax free credits for Small to Medium sized Business (turnover under $50 million) for their BAS who employ staff between 1 January 2020 and 30 June 2020. The credit will be applied equal to 50% of the PAYG Withholding declared in the January – June BAS up to a limit of $25,000. Even if you have no withholding taxes to pay but still pay wages then a minimum $2,000 credit will be granted.
This measure will benefit up to 690,000 businesses who employ 7.8 million people. Unfortunately this measure does not apply to Partnerships or Sole Traders as these types of entities do not pay wages.
2. Supporting Apprentices or Trainees:
Eligible Small Businesses will be able to apply for a 50% subsidy on wages for Apprentices or Trainees (who are already in training as of 1 March 2020) for up to 9 months from 1 January 2020 to 30 September 2020. The benefit is up to $21,000 per Apprentice. You can register for the subsidy from April 2020 with claims due by 31 December 2020. If you need more information on this measure please contact me directly.
Please contact me directly if you need access to any of these concessions if Coronavirus is affecting your business, as they are not automatically applied.
The ATO has released a series of Administrative Concessions to help businesses affected by Coronavirus. These include:
- Deferring BAS, Income Tax, FBT and Excise payments by up to 4 months
- Allowing businesses affected to lodge monthly if they need to access refunds quicker
- Allowing businesses to vary their PAYG Tax Instalments to nil, and access refunds on instalments paid for September and December 2019 quarters
- Remitting interest and fine penalties incurred by businesses on or after 23 January 2020
- Allowing businesses access to low interest payment plans for existing and ongoing debt obligations
A one off $750 cash payment to pensioners, social security or veteran income support recipients and eligible concession card holders. The payment will be tax free.
The payment will be made from 31 March this year and recipients will only receive 1 payment even if they receipt multiple sources of social security. If you are not receiving social security you will not be eligible for the payment. See this Fact Sheet for more information https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_households.pdf
The Government has pledged $1 Billion to support the sectors, regions and communities affected by the economic impacts of the Coronavirus, including industries like Tourism, Agriculture and Education. Measures include waivers of fees and charges for businesses that operate in the Great Barrier Marine Park and Commonwealth National Parks. It also includes assistance to help businesses identify alternative export markets or supply chains. The Government also intends to further promote the Domestic Tourism Market. The Government will release further information in this space.
If you have any questions about the above please see our Accounting page, and get in touch with Jordan Pavey for further information.
Call Jordan on 0422 682 762.