In light of the recent economic response released by the government, we provide a summary of what we believe to be the key measures below.
Obviously, a number of these measures contain a lot more detail than provided here and will have eligibility criteria and other requirements, so we suggest you contact us to discuss if we can assist in any way.
IF YOU EMPLOY STAFF, YOU MAY BE ELIGIBLE FOR:
Temporary Cash Flow Support
Employers will receive a 'boost' equal to 100 percent of their salary and wages withheld (PAYG wages tax) between 10,000 and $50,000.
An additional payment is also being introduced equal to the total of all of the Boosting Cash Flow for Employers payments received. This means that eligible businesses will receive at least $20,000 up to a total of $100,000 under both payments.
Not-for-profit entities will also be eligible.
The 'boost' will be split into two parts with half available in the March to June BAS period, and the balance in the July to September BAS period.
The 'boost' will be calculated and delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 based upon employers withholding during the period.
The actual timing and access to these boosts is quite complicated and every employer will be different, so it is important to get your March BAS lodged as soon as you can.
Assistance to Help Pay the Wages of Apprentices or Trainees
Eligible employers can apply for a wage subsidy of 50 percent of the apprentice's or trainee's wage paid during the 9 months from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
If you employ a casual employee and they can't work because they become sick or need to self-isolate, or their income has been otherwise impacted by the economic downturn caused by the coronavirus, they may be eligible for income support payments.
The government is making these payments quicker to access by waiving the usual waiting period in certain circumstances.
SUPPORT FOR YOUR BUSINESS
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, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
The Increased Instant Asset Write-Off
Under normal circumstances, individual assets less than $30,000 are eligible for the instant asset write off. The government has lifted this threshold to $150,000 for assets that are either installed or ready for first use by 30 June 2020.
Accelerated Depreciation Deduction Arrangements
A time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
Businesses with a turnover of less than $500 million will be able to deduct 50 percent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset's cost.
Assistance for Affected Regions, Communities and Industries
The government has created an initial $1 billion support fund to provide assistance to industries and regions severely affected by the economic impacts of Coronavirus including those heavily reliant on industries such as:
The $1 billion will be provided through existing or newly established government programs.
The ATO is providing relief from some tax obligations for businesses affected by the outbreak, on a case-by-case basis.
You must maintain your lodgement obligations during this time.
This does NOT apply to superannuation guarantee payment obligations - these will remain due at the end of each financial quarter.
SME Guarantee Scheme
This will provide businesses with funding to meet immediate cash flow needs, by further enhancing lenders' willingness and ability to provide credit. Businesses with a turnover of up to $50 million will be eligible to receive these loans.
Maximum total size of loans of $250,000 per borrower.
The loans will be up to three years, with an initial six-month repayment holiday.
The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
Payroll Tax Relief for Businesses with Grouped Australian Wages of No More Than $10 Million (NSW Wages Only - For Other States Please Contact Us)
Payroll tax customers whose total grouped Australian wages for the 2019/2020 financial year are no more than $10 million will have their annual tax liability reduced by 25% when they lodge their annual reconciliation , which is due on 28 July.
For those customers who lodge and pay monthly and whose total Australian wages will be no more than $10 million for the current financial year, no payment for the months of March, April or May 2020 will be required.
Increased and Accelerated Income Support
The government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.
Early Access to Superannuation
You can access up to $10,000 of your superannuation in 2019/20 and a further $10,000 in 2020/21. You will be able to apply for early release of your superannuation from mid-April 2020.
To apply for early release, you must satisfy any one or more of the following requirements:
You're eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
On or after 1 January 2020:
You were made redundant.
Your working hours were reduced by 20 percent or more.
If you're a sole trader, your business was suspended or there was a reduction in your turnover of 20 percent or more.
Deferral of Loan Repayments
Australian banks will defer loan repayments for between three and six months - you need to contact your bank to discuss.
This is not a 'loan holiday' - interest will continue to capitalise on these loans.
The government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for 2019/20 and 2020/21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
We appreciate there is a lot here to digest. If we can be of any assistance, please do not hesitate to contact us.