Government announcements in response to Coronavirus - Business Updates
March 24, 2020
The Government has released Stimulus packages to assist Businesses cope with the COVID-19 Virus.
The stimulus package will help boost income support payments, provide cash flow support of up to $100,000 for small business employers and relax corporate insolvency laws.
The Prime Minister has warned that there are “No Quick Solutions” and that business should prepare for the next 6 months of disruption.
In Summary:
| Proposed Legislation | Who is Affected | When it takes Affect |
|---|
| 100% of your PAYGW (tax on wages) will be refunded | ||
|---|---|---|
| a) Min $10K, Max $50k per entity over 6 months | • Businesses who employ staff with turnover under $50M. | From 28th April 2020 |
| b) It’s Tax free | • Sole traders with employees. | Jan - June (first credit comes after lodgement of March BAS) |
| • Active eligible employers established prior to 12 March 2020. | The credit will be processed within 14 days of lodging your March BAS in the first instance and then after each additional BAS. | |
| If you have outstanding debt liabilities with the ATO, these amounts will simply reduce your balance payable and you will not get a refund of cash in your bank account. | ||
| See attached link for additional information. |
| An Additional payment equal to the above 100% PAYGW received April - June to be paid July - Oct | ||
|---|---|---|
| As above | July – Oct | |
| See attached link for additional information. |
| 50% Wage subsidies for apprentices & Trainees | ||
|---|---|---|
| Those employed from January through to September 2020. | Small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. | Employers can register for the subsidy from early-April 2020. |
| Maximum benefit is $21K. | The apprentice or trainee must have been in training with a small business as at 1 March 2020 to qualify. | Final claims for payment must be lodged by 31 December 2020. |
| Further information is available at: | ||
| The Department of Education, Skills and Employment website at: www.dese.gov.au | ||
| Australian Apprenticeships website at: www.australianapprenticeships.gov.au | ||
| For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider. | ||
| See attached link for additional information. |
| $150K Immediate Asset Write-off on asset purchases | ||
|---|---|---|
| This is merely a “bring forward” claim of depreciation and is NOT a cash refund. | Businesses with turnover up to $50M. | From 12 March 2020 to 30 June 2020, until further notice. |
| See attached Link for additional information. |
| Payroll Tax relief from March to May 2020 | ||
|---|---|---|
| Businesses whose total grouped Australian Wages for 2019/20 financial year are no more than $10M, will: | As at March 2020 – lodgement of March obligations, if lodging monthly, otherwise when annual reporting is completed. | |
| 1. Will not have to make payment for the months of March, April or May 2020; and | See attached Link for additional information. | |
| 2. Will have their annual tax liability reduced by 25% when they lodge their annual reconciliation, which is due 28 July 2020. |
| Payroll Tax threshold limit increased to $1M | ||
|---|---|---|
| Businesses who pay eligible wages (wages, super and some subcontractors). | 1 July 2020 | |
| See attached Link for additional information. |
| Low interest payment plans with the ATO | ||
|---|---|---|
| Anyone who is struggling financially due to the crisis | Now |
| Extensions of time to lodge obligations with ATO | ||
|---|---|---|
| Anyone who is impacted due to the crisis | Additional information to be advised. |
| Variation of Pay as You Go (PAYG) instalment amounts to zero & claim a refund for instalments paid for Sep & Dec quarters | ||
|---|---|---|
| Businesses and individuals who have a PAYG liability | March 2020 IAS/BAS onwards |
| Deferring by up to 6 months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise | ||
|---|---|---|
| Businesses who have BAS who have been impacted | From March 2020 BAS |
| Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to | ||
|---|---|---|
| Businesses on Quarterly BAS | Now | |
| See attached ATO Link for additional information. |
| Temporary relief for financially distressed Businesses | ||
|---|---|---|
| A temporary increase in the threshold at which a creditor can issue a statutory demand on a company | Owners or directors of a business that are currently struggling due to the COVID-19 Virus. | Now |
| See attached Link for additional information. |
| Sole Traders and Self-Employed eligibility for Jobseeker Payments | ||
|---|---|---|
| Income support from Centrelink will be relaxed for the self-employed and sole traders. | Self employed and sole traders | Additional information to be advised. |
| See attached link for Income Support. | ||
| See attached link for Financial Support for Job Seekers. |
| Banks are offering assistance with: | ||
|---|---|---|
| a) Offering loan payment deferrals up to 6 months | The Government will provide eligible lenders with a guarantee for loans with the following terms | See attached Bank Link for additional information. |
| b) Cashflow & Equipment Loans | • Maximum total size of loans of $250,000 per borrower. | See attached Business Access to Credit for additional information. |
| c) Financial Hardship | • The loans will be up to three years, with an initial six-month repayment holiday. | |
| • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan. | ||
| Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look | ||
| through the cycle to sensibly take into account the uncertainty of the current economic conditions. |
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