In the face of the current Coronavirus health crisis the federal government has announced a range of measures to support the economy, business and employment. We include below those measures that we believe will have an impact on you.
Cash Flow Boost for Employers
All employers with an aggregated annual turnover of under $50 million (based on prior year turnover) will receive a payment ranging from $2,000 to $25,000 from the government to help with cash flow. Eligible businesses will receive a payment equal to 50% of taxes withheld from their employees’ salary and wages up to $25,000. Eligible businesses that have paid salary and wages from which no PAYG withholding is required to be remitted at all will receive the minimum payment of $2,000. This “payment” will be delivered as a credit in the activity statement system from 28 April 2020 upon businesses lodging their business activity statements.
Increasing the Instant Asset Write Off
The government will be increasing the threshold for the instant asset write off from the current level of $30,000 to $150,000 and expand access to this measure to businesses with an aggregated annual turnover of up to $500 million (up from $50 million). The increase will only be available on assets purchased between 12 March and 30 June 2020. It will apply for new or second-hand assets first used or installed ready for use by 30 June 2020.
An accelerated depreciation deduction has been proposed by the government for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50% of the cost of the eligible asset on installation with existing depreciation rules applying to the balance. Eligible businesses are those with an aggregated turnover below $500 million.
Apprentice and Trainee Wage Subsidy
The government will offer employers a wage subsidy of 50% of apprentice’s or trainee’s wage from 1 January to 30 September 2020, capped at $7,000 each quarter per each eligible apprentice or trainee. Businesses with less than 20 full-time staff will be eligible, however employers of any size Group Training Organisations that reengage an eligible out-of-trade apprentice or trainee will continue to be eligible for the subsidy.
Direct Payment to Individuals
One-off payments of $750 will be made to around 6.5 million recipients of social security, veterans and other income support payments and eligible concession card holders residing in Australia.
ATO Support Measures for Those Affected by Coronavirus Outbreak
The ATO will also implement a series of administration measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak. Businesses impacted by the Coronavirus are encouraged to get in touch with the ATO to discuss relief options. Options available to assist impacted businesses include:
- Deferring payment dates by up to four months for amounts due on Business Activity Statements (BAS, including PAYG instalments), Income Tax Assessments, FBT assessments and excises;
- Allowing 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 April 2020 quarter. Businesses that do choose to 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.
Employers will still need to meet their ongoing Super Guarantee Obligations for their employees.
If you have any queries or require assistance with any of these measures please contact our office on 08 8379 9501 or email@example.com