COVID-19 Stimulus Package, what you need to know…
The ATO have recently announced stimulus packages to assist businesses during this unprecedented time of change.
Many small businesses are facing significant downturns in trade, and some with the unfortunate direction to close temporarily. We understand these are hard times for both business owners and employees. We have received many calls from clients asking for further information and how they can benefit from the packages rolled out to date, and we provide a summary below. We will be working with each business, and their respective accountants, to take advantage of assistance available to them.
The timing benefits particularly around PAYGW rebates, revolves around timely lodgement of the January to March BAS, and our team at Tashly Consulting are working hard to ensure your files are as ready as possible so facilitate prompt BAS preparation either by us internally, by yourself or your accountant depending on your engagement with us. We need your help! Please forward through all your documents, bank statements or any additional requests we have for information as efficiently as possible.
In summary, the ATO have rolled out several announcements which we have summarised below.
Support for business:
- Instant asset write-off has been increased from $30,000 to $150,000 (GST exclusive) for assets both new or second-hand purchased after 12 March 2020 and is installed and ready for use before 30 June 2020
- 50% instant depreciation for new assets purchased after 12 March 2020 and is installed and ready for use before 30 June 2021
- ATO are guaranteeing up to 50% of new unsecured loans issued by eligible lenders up to 30 September 2020 with maximum loan size of $250,000, loans up to 3 years, with an initial six-month repayment holiday
ATO Supporting business with the tax obligations by:
- allowing up to 6-month deferral on payments
- the option of varying PAYGI to Nil (note this is simply deferring a future tax debt, not eliminating it) and
- remitting penalties and interest imposed since 23 January 2020
- the option to not remit any further PAYGI
NB: These need to be applied for directly with the ATO – these benefits are not automatic
Support for Employers:
- Boosting cashflow for employers with turnover of less than $50m with rebates ranging from $20,000 to $100,000 to eligible employers
- this income is non-assessable
- cashflow boost payments will be applied to the integrated client account to offset any existing debts
- refunds may be issued within 14 days if integrated client account is in credit, and all other lodgements are up to date, and no outstanding debts
- Assistance for apprentices and trainees via wage subsidy up to 50% of the wages paid 1 Jan-30 Sept 2020 maximum of $21,000 per employee
Support for Individuals
- Services Australia payments for those who have lost their job, or income has reduced by more than 20% (includes sole traders and employees) and can be applied for online via MyGov
- Coronavirus supplement of $550 per fortnight available temporarily up to six months for eligible recipients
- Initial Economic Support payment of $750 in March/April for those on an eligible payment plus a further second $750 Economic
- Support payment in July for eligible recipients
- Early un-taxed access to Superannuation of $10,000 in 2019-20 and a further $10,000 in 2020-2021 through application via myGov online
1. The above stimulus incentives do have many conditions around them so you will need to understand your individual circumstances to see if you are eligible. One of the requirements is timely lodgement of BAS, and at Tashly Consulting, we pride ourselves in ensuring 100% of our monthly and quarterly lodgements are done on time – so our boring nagging for information to meet the deadlines will now prove to be a powerful ally in determining your eligibility. You may also need to understand whether your income tax lodgements are also up to date, and recommend you liaise with your accountant around this.
2. There are integrity clauses built into the stimulus package legislation and any alterations to your business patterns to increase your access to the cash boosts, could result in investigation, exclusion from the scheme and penalties applied. Please also note that any sudden changes to changes to payroll to increase the cashflow boosts may cause the ATO to investigate, and then increase likelihood for the ATO to review past payments and their classifications which could have flow-on effects around superannuation, workcover, payroll tax and FBT obligations.
We are here to help! It’s business as usual at Tashly Consulting and even though our team are distributed, we’re working as closely as ever to ensure we can support your business during this time. Please contact us on 0413-631-909 or via email to discuss your specific needs.
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Disclaimer: All or any advice contained in this blog/newsletter is of a general nature only & may not apply to your individual business circumstances. For specific advice relating to your specific situation, please contact your accountant or other professional adviser for further discussion.