What Coronavirus Help Can I Get For My Business?

Just when we thought we could focus again after the crazy summer we now have another challenge to overcome! When we all did our risk planning for running a business we didn’t truly think in reality we would have to deal with a pandemic, but here we are….

There has been a huge amount of information circulating in the media and online about assistance to small business owners. It is great that there is some relief available. We have also received quite a number of calls with questions. To help I have put some points together for you about some of the relevant support available.

The first round of relief will be available on completion of March Quarter Business Activity Statements. It will be a good opportunity to get these done as quickly as possible to facilitate this.

The Federal Government Coronavirus Stimulus Package

The Federal Government has made announcements about the initial relief available. Much of this is targeted at small business owners to assist with cash flow and to help businesses maintain and support their employees. There are two key measures in this area outlined below.

Boosting Cash Flow for Employers

This payment will be available to employers who withhold tax from employees’ salary and wages. It is for businesses who have a turnover of under $50 million. Business owners will receive a payment equal to 50% of the amount withheld from employees, up to a maximum of $25,000. All payments will be made as a credit in the Activity Statement system.

So in practical terms, as a business lodges its quarterly Business Activity Statement, it is telling the ATO how much has been withheld in Pay As You Go Withholding from employees. The ATO will then make a payment to you of 50% of this amount. This will commence with lodgment of the March and June Business Activity Statements.

Note, the same will apply for any businesses undertaking monthly reporting between March to June. To provide a similar treatment to quarterly reporters, the payment for monthly lodgers will be calculated at three times the rate for the March Activity Statement.

The ATO has also advised that all eligible businesses that pay salary and wages will receive a minimum payment of $2000, even if they are not required to withhold tax.

Supporting Apprentices and Trainees

This is a great measure for those businesses who have apprentices and trainees. Eligible employers (those employing fewer than 20 full time employees) will be able to apply for a wage subsidy of 50% of an apprentice’s or trainees’ wage for the period 1 January to 30 September 2020.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). The apprentice or trainee must have been 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 (AASN) provider. Registration for the subsidy will commence from early April 2020.

Further information can be obtained from:

• The Department of Education, Skills and Employment
• Australian Apprenticeships

Increasing the Instant asset write off and Accelerated depreciation

The government is also proposing (laws pending) two additional measures that may be of interest to businesses thinking of investing in further assets.The Government has proposed increasing the threshold for the instant asset write off from $30,000 to $150,000 and expanding access of this to businesses with a turnover of up to $500 million. The increase will be available between 12 March to 30 June2020 for new or second hand assets first used or installed ready for use by 30 June 2020.

The Government is also proposing an accelerated depreciation deduction for eligible assets acquired from 12 March and first used and installed by 3 June 2021. In this case a deduction of 50% of the cost of the assets can be claimed on installation, with the existing depreciation rules applying to the balance.

If you are considering purchasing assets it would be good to discuss this with us or your Accountant so we can see how these measure could benefit you.

Additional Australian Taxation Office (ATO) support measures

The ATO is also keen to talk to any business owners who are impacted by the Coronavirus outbreak. Some of the options they have outlined which may assist businesses include:

• deferrals of paying (not lodging) your Business Activity Statements
• moving to monthly reporting rather than quarterly for Business Activity Statements
• options to vary Pay As You Go Instalment amounts on March Business Activity Statements.

More Support to Come

Further support will be offered by the Federal Government as the pandemic continues. There have also been announcements by State Governments and the ACT Government that further stimulus measures will be released soon.

Do you need some help accessing these measures?

If you need any assistance in getting your bookkeeping up to date and Business Activity Statements prepared and lodged please feel free to get in touch.