The Coronavirus outbreak: COVID-19, is wreaking havoc across the nation, leaving business owners around Australia counting costs. Fortunately, the government have put measures in place to support our economy and assist business owners with their cash flow during this difficult time.

Cash flow boost for employers

Businesses with an aggregated annual turnover under $50 million, based on prior year turnover, are eligible to receive $2,000. to $25,000. from the government to assist with cash flow.

Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

The payment will be delivered as a credit to eligible businesses upon lodgement of activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will receive the payment for the March 2020 and June 2020 quarters, whereas Monthly lodgers will receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.

Support to employers with apprentices and trainees

The government is providing support to small businesses employing fewer than 20 full-time employees, including apprentices and trainees, by offering 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.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee, which is capped at $7,000 per quarter.

Increasing the instant asset write-off

The Government is increasing the instant asset write-off to $150,000. and expanding access to include all businesses with aggregated annual turnover of less than $500 million, until 30 June 2020.

This applies from 12 March 2020 until 30 June 2020, on a per asset basis, for new or second-hand assets first used or installed ready for use by 30 June 2020.

Accelerated depreciation deductions

The Government is introducing a time limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions. Key features include:

  • benefit — 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;
  • eligible businesses — businesses with aggregated turnover below $500 million; and
  • eligible assets — new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (i.e. plant, equipment and specified intangible assets, such as patents) acquired after announcement and first used or installed by 30 June 2021. Does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Direct payments to individuals

The Government is providing a one-off, direct payment of $750. to social security, veteran and other income support recipients and eligible concession card holders.

Additional information about the Government stimulus package can be found here.

ATO tax relief for those affected by the coronavirus outbreak

The Australian Taxation Office is providing relief to affected businesses in the form of payment deferrals and faster access to goods and services tax refunds.

The options available for affected businesses include:

  • Four-month deferrals for the payments of amounts due through business activity statements (including Pay-As-You-Go instalments), income tax assessments, fringe benefits tax assessments and excise.
  • Allowing businesses on a quarterly reporting cycle to switch to monthly GST reporting, so they can gain quicker access to any available GST refunds.
  • Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the April 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
  • remit any interest and penalties incurred since 23 January 2020, which have been applied to tax liabilities, allowing businesses to enter into low-interest payment plans for existing and ongoing tax liabilities.

Employers will still need to meet their ongoing super guarantee obligations for their employees during this time.

Relief measures for COVID-19 will not be automatically rolled out to businesses.  Business owners affected by the current coronavirus outbreak are encouraged to contact the ATO on 1800 806 218 to discuss relief options. More information can be found here.

Alternatively, you may wish to contact Judge Accountants on 1300 707 766 and speak to one of our friendly staff.

We understand that operating a business during the current COVID-19 coronavirus outbreak is a challenge for many business owners, so we are here to support you and your business through this difficult time.