March 2020 has certainly been interesting, not only in Australia but also having a huge impact across the world with the outbreak of Coronavirus (COVID-19).
On March 12th 2020 the Australian Government announced their economic response to the Coronavirus.
There are several key areas that the Australian Government have announced, two directly impact on Australian businesses:
- Cash Flow Assistance for Business
- Delivering Support for business investment
Full details of the assistance can be found here but in summary, here is what business will be able to access:
Cash Flow Boost for Employers
This Cash Flow Boost will provide up to $25,000 back to business, with a minimum payment of $2,000 to eligible business that employ staff. The payment will be tax free. This will be available to business entities with an aggregated annual turnover <$50 million. You must employ workers. This Cash Flow Boost Will be delivered by the ATO as a credit on your activity statement from 28 April 2020 upon lodgement of activity statements. This payment will be equal to 50% of the amount withheld from employees salary and wages, 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.
Our clients who are eligible for this Cash Flow Boost do NOT need to do anything – Accurate Balance and the ATO will be process this automatically upon lodgement of activity statements. If this Cash Flow Boost places your activity statement account in credit, the ATO will trigger a refund back into your ATO linked business account.
Apprentices and Trainees
Small business that employ 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 nine 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
Increase of the Instant Asset Write-Off**
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include all businesses with an aggregated turnover of less than $500 million (previously $50 million). Threshold applies on a per asset basis – businesses can immediately write-off multiple assets. Applies from the announcement (12 March 2020) until 30 Jun 2020, for new or second-hand assets first used or installed ready for use in this timeframe
If you are considering purchasing assets, please contact your accountant to discuss the implications further.
Backing Business Investment**
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 an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Accurate Balance recommend that prior to purchasing assets that may be deductible under this stimulus package, that you contact your Accountant and seek their specific advice relating to your individual circumstances.
** This information is of a general nature and should not be considered taxation advice
We are here to help!
We here at Accurate Balance are here to support and assist our bookkeeping clients, in the Redlands, Brisbane Bayside and beyond, through these uncertain times ahead.
If you have any queries around what any of this means for your business, PAYG, BAS and employees, please don’t hesitate to get in touch.