What the Coronavirus stimulus package means for you
It’s hard to escape the news of the Coronavirus as it continues to have a huge impact on people across the world. Closer to home, the Morrison Government has announced a stimulus package in response to the anticipated economic downturn.
This package includes a number of economic stimulus measures for the 2019/20 and 2020/21 income years, with most of targeted at helping small to medium-sized businesses.
Here to help
But first, the team at First Class Accounts Campbelltown are here to help you weather the global issues that this virus raises. We are still here and available when you need. We’re very aware that your family, staff and business needs are the most important priority. The same goes for our staff. If you would like to conduct meetings over the phone or online communication, we will help in this way.
What the stimulus package means for you
According to the Australian Government’s announcement, the $17.6 billion dollar stimulus package is intended to support confidence, employment and business continuity. It is designed to support business investment, help small businesses manage short-term cash flow challenges, provide targeted support to individuals and assistance to the most severely affected communities and regions. Here’s what’s included:
Increasing the instant asset write-off
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 for businesses with less than $500 million turnover. These assets need to be purchased after 12th March 2020 and be installed ready for use by 30th June 2020.
Extra 50% depreciation deduction on assets
The Government is introducing 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 per cent of the cost of new and eligible assets on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Boosting cash flow for employers
The Boosting Cash Flow for Employers measure will provide up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Supporting apprentices and trainees
Small businesses employing less than 20 full time employees can apply for a wage subsidy of 50% 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 ($7,000 per quarter).
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Stimulus payments to lower income Australians
The Government will provide a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. There will be one payment per eligible recipient. For example, if a person qualifies for the one-off payment in multiple ways, they will only receive one payment. The payment will be tax free.
Support for Coronavirus-affected regions and communities
The Government has set aside $1 billion to support those regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus.
ATO flexible approach
The ATO has signalled it will be flexible in the way it handles taxpayers’ affairs over the coming months. The measures will include:
- up to a four month deferral of the payment date of amounts due through the business activity statement, including PAYG instalments, income tax assessments, fringe benefits tax assessments and excise.
- Allowing quarterly GST reporting businesses to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero will also be allowed to claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Looking to remit any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and allowing affected business to pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
The message from this is clear. Pay your staff and suppliers first, the ATO can wait.
You will need your finances and records to be clean and up-to-date to access many of these incentives. If you have any questions or concerns, please feel free to reach out to us directly. We wish you all good health in the coming months.