We are here to help you
Yesterday the government announced further measures to assist small business. These additional amounts will help many businesses to keep their doors opened.
If you have any questions or comments, please speak to us or your accountant.
Below is a summary of those changes.
1. BUSINESS INVESTMENT
The following measures are designed to assist Australian businesses and economic growth in the short term:
INCREASING THE INSTANT ASSET WRITE-OFF (No Change)
- Threshold increased from $30,000 to $150,000
- Applies to businesses with aggregated turnover of less than $500 million
- Applies from today’s announcement to 30 June 2020
- The $150,000 threshold applies on a per asset basis so eligible businesses can immediately write-off multiple assets
- Applies for new or second-hand assets first used or installed ready for use by 30 June 2020.
We recommend that you please consider the cashflow implications of the purchase. The increase to the instant asset write off DOES NOT mean that you will receive a tax refund, but rather that your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year. Please contact your accountant or us to discuss the cashflow implications further
INVESTMENT INCENTIVE (No Change)
- A deduction of 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost
- Applies to businesses with aggregated turnover below $500 million
- Eligible assets are new assets that can be depreciated under Division 40 of the ITAA97 (i.e. plant, equipment and specified intangible assets) acquired after today’s announcement and first used or installed by 30 June 2021 (NOTE: This measure does not apply to second-hand Division 40 assets or capital works subject to Division 43).
NOTE: the announcement did not reference the removal of the depreciation limit for cars.
We recommend that prior to purchasing assets that may be deductible under this measure, that you contact your Accountant and seek their specific advice, to ensure your business, and the asset being purchased is eligible for the measure. Further information can be found here.
2. CASHFLOW ASSISTANCE FOR BUSINESS
The following measures are designed to support employers, employees and improve business confidence:
BOOSTING CASHFLOW FOR EMPLOYERS (Updated also now includes Not for Profit)
- For those of you with employees you will be entitled to a rebate equal to 100% of your PAYG Withholding from 1st January to 30 June 2020, up to a maximum of $50,000. (This has increased from 50% of the withholding and a maximum of $25,000 which was announced last week)
- Example: If you withhold $15,000 a month from your employees wages in PAYG you will receive a $15,000 rebate each month, until you reach the $50,000 threshold.
- The minimum payment will increase from $2,000 to $10,000
- Example: If you employ someone and you don’t have to withhold tax on their wages you will still receive $10,000.
- This will be paid to you once the March BAS and June BAS have been lodged. For those of you who pay PAYG Withholding monthly the ATO will give you 3 times the March Withholding amount to ensure you are on a level playing field, then the rest in each BAS to the end of June.
- On top of this an extension has also been applied from 1st July to 31st October. This extension means you will receive the same rebate again as you received between January – June. That means an additional $10,000 as a minimum up to $50,000 depending on how much you were eligible for previously.
- Again, there will be no action required by our clients who are eligible to access this measure. It’s important to note that the payment will not be made until after your BAS has been lodged and will only be made to you if your ATO account is in Credit. That is, if you owe the ATO money this will come off your existing debt.
- You don’t need to ‘register’ for this, it will automatically happen as part of your BAS. We will of course calculate and let you know how much this will be in April when we are preparing the March Quarter BAS.
SUPPORTING APPRENTICES AND TRAINEES (No Change)
- Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020 (and this subsidy will be available to a new employer where the business is unable to retain an apprentice)
- Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter)
- Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being in training with a small business as at 1 March 2020)
- Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network provider.
If you need assistance with your apprentices, please reach out to us for assistance and we can work with you to ensure you are correctly registered and able to claim for this measure.
3. ASSISTANCE FOR AFFECTED REGIONS
Funds will be available to assist during the next few months and over the year ahead to ensure these communities are well placed to recover:
SUPPORT FOR CORONAVIRUS-AFFECTED REGIONS AND COMMUNITIES (No Change)
- An initial $1 billion allocation to support regions and communities disproportionately affected by the economic impacts of the Coronavirus (e.g. tourism, agriculture, education) that will be provided through existing or newly established Government programs
- The Minister for Trade, Tourism and Investment will work with affected industries and communities to develop recovery plans and measures.
ATO ADMINISTRATIVE RELIEF (No Change)
- The ATO will provide administrative relief for certain tax obligations for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis
The ATO will setup a temporary shopfront in Cairns within the next few weeks with a dedicated staff specialising in assisting small business (and will consider presence in other regions as well).
4. STIMULUS PAYMENTS TO HOUSEHOLDS
This measure is designed to assist around 6.5 million lower income Australians, including pensioners and social, security and veteran income support recipients:
- The Government will provide a one-off $750 payment (with one payment per recipient)
- The payment will be tax-exempt and will not count as income or Social Security, Farm Household Allowance and Veteran Payments
- Eligible recipients are those residing in Australia and be receiving a payment specified by the Government (such as the Age Pension, Carer Payment, Newstart Allowance, etc) or hold a concession card on 12 March 2020
The one-off payment will be paid automatically from 31 March 2020 by Services Australia or Veterans’ Affairs.
JOB SEEKERS (New)
- Jobseeker allowance has been doubled, will be called the coronavirus supplement
- The government will waive the asset test and waiting period for the jobseeker allowance
- The supplement will provide an additional $550 a fortnight on top of the existing jobseeker or new start payment and will be available to sole traders and casual workers who meet the income test.
- Anyone eligible for the maximum jobseeker payment will now receive more than $1100 a fortnight.
- From July, a further $750 payment will be made to those on income support that are not eligible for the coronavirus supplement.
- From April, those affected will gain access to superannuation that is tax-free and capped at $10,000 this financial year and a further $10,000 next financial year
- Sole traders or casual workers who have seen income or hours reduced by 20 per cent or more as a result of the coronavirus will be able to get early access to their superannuation.
- Applications can be made online through your Mygov account.
5. TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES
- Temporary relief for directors from all personal liability for trading whilst insolvent.
- Threshold increase in the threshold at which creditors can issue a statutory demand as well as the threshold for a creditor to initiate bankruptcy proceedings (ATO will also tailor their solutions on reducing payments/deferrals or withholding enforcement actions including Director Penalty Notices and wind-ups. Further information can be found here
6. PAYROLL TAX RELIEF
There are a range of Payroll Tax Concessions in each state.
- No Payroll Tax to be paid for March, April or May
- When your annual reconciliation is lodged in July you will get an exemption of 25% of your total payroll liability for the year (note this includes the wages you paid in March – June)
- For those with Annual Payroll of up to $3million this year NO PAYROLL TAX. If you have already paid during the year you will receive a refund.
- Deferral of lodgement date until 3rd August for each month from now on. Note you still have to pay, just not until August.
- One off grants are available for employers with Australian wages between $1million and $4million. Grant total is $17,500