Coronavirus 2020 – How the Australian Government is helping Small Businesses
We all run small businesses. Here is a summary of the Federal Government’s small business stimulus package announced so far, including support measures from the ATO.
COVID-19 economic stimulus package announced
The Government’s plan provides direct support for business including payments for business, wage subsidies for apprentices and trainees and enhancing the instant asset write-off:
- Tax-free cashflow boost for employers. Up to $25,000 is available to help pay wages or for investment to protect against a downturn in activity. The payment is open to businesses with a turnover of less than $50 million. Eligible businesses that withhold tax on employee salary and wages will automatically receive a payment equal to 150% of the monthly amount withheld for the month of March 2020 (for monthly lodgers), and 50% for future months and quarterly lodgers. The minimum payment is $2,000 and maximum is $25,000 and will be available for businesses who lodge business activity statements for the March, April, May and June 2020 months/quarters.
- Apprentice wage subsidy. Small businesses with fewer than 20 full-time workers will receive 50% of an apprentice or trainee’s wage (Covering the period 1 January 2020 to 30 September 2020 9 months). For each apprentice or trainee, the Government will provide up to $7,000 in wage assistance per quarter. The wage subsidy will be open to businesses with fewer than 20 full-time workers and employers of any size that re-employ someone who loses their position as a result of the coronavirus downturn. Employers are to apply for this from April 2020.
- Boosted instant asset write-off. Businesses with turnover of less than $500 million are eligible for an expanded instant asset write-off for asset investments of up to $150,000. The threshold applies on per asset basis, so businesses can immediately write-off multiple assets (until 30/6/2020).
- Accelerated depreciation. Businesses with turnover less than $500 million will be able to access a 15 month investment incentive by accelerating depreciation deductions (ie 50% of the asset cost written off, and the balance per depreciation rules until 30/6/2021).
- Help from the ATO. The ATO will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis. Contact the ATO on 1800 806 218 or visit the ATO website at ato.gov.au for more information.
- Income support. People who are unable to attend work because they have been diagnosed with the Coronavirus or who are in isolation, may qualify for income support if they do not have any employer leave entitlements
Specific ATO support measures to assist those affected by COVID-19.
The ATO has announced it will implement a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak. See further: https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/
Options available to assist businesses impacted by COVID-19 include:
- Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
- 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
- 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 can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
Note that these will not be automatically applied You will need to contact the ATO for assistance. Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on the Emergency Support Infoline 1800 806 218, when they are ready, to discuss their situation.
Where you may be suffering financial hardships in your business, your bank may have practical ways to help. We’ve also included a link to a fact sheet from Australian Banking Association: How your bank can help.
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