The Australian Government and banking institutions have united to assist small businesses weather economic uncertainty. The objective is to centralise all of the concessions available to ensure every small business can easily access this information and apply accordingly.
Economic Response to COVID 19: https://treasury.gov.au/coronavirus/businesses
The Government’s $130 billion JobKeeper Payment will help keep more Australians in jobs and support businesses affected by the significant economic impact of the coronavirus.
Under the wage subsidy scheme, around six million workers will receive a fortnightly payment of $1,500 (before tax) through their employer.
- see our post on JobKeeper Payment
Cash flow boost:
Eligible businesses and not-for-profit (NFP) organisations will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.
A maximum payment of $50,000 will be available when the March activity Statements is lodged.
An additional cash flow boost will be applied when activity statements for each monthly or quarterly period from June to September 2020 are lodged. These credits are equal to the total boosts credited for March to June 2020. They will be paid out in either two or four instalments depending on your reporting cycle.
The amounts do not need to be paid back when your cash flow improves, and the amount is of the cash flow boost is tax free.
Supporting apprentices and trainees:
If you employ an apprentice or trainee, you may be eligible for a wage subsidy of 50 per cent of their wage paid from 1 January 2020 to 30 September 2020 (up to a maximum of $21,000 per eligible apprentice or trainee).
If a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Early access Superannuation:
From 20 April, eligible individuals will be able to access up to $10,000 of their superannuation before 1 July 2020 and up to a further $10,000 from 1 July 2020 until 24 September 2020.
Instant Asset Write-Off (IAOW):
The instant asset write-off threshold has been increased from $30,000 to $150,000 for businesses with an aggregated annual turnover of less than $500 million.
It is available for new equipment or a second hand assets.
Your business may benefit from the increased and expanded instant asset write-off until 30 June 2020.
Accelerated depreciation deductions will also be available for eligible businesses via a 15-month investment incentive initiative.
Government underwritten, Credit and loans:
A new Coronavirus SME Guarantee Scheme means you may be able to access additional loans from participating lenders to support you through the coming months.
The Government will provide a guarantee of
The Government will guarantee 50 per cent to SME lenders for new unsecured loans to be used for working capital to unlock up to $40b in finance.
Loans will be repayment free for 6 months.
Important clarification – this does not mean the Federal Government is issuing loans directly.
To apply contact your bank/lending institution about this package.
Refer to the ‘Coronavirus SME Guarantee Scheme’ and ask what new loan products are available to assist.
Rental relief package:
Businesses that are eligible for Jobkeeper payments will be protected by new Code of Conduct to be passed in each State:
In summary landlords must look to reduce rent in proportion to reduction in business turnover i.e. 50% reduction turnover then 50% rent reduction supported by land tax reduction.
The commercial and residential rent relief also includes:
- freeze on evictions
- 3- month rebate in land tax for 2019 -2020, and
- 3 months deferral of land tax for 2020-2021
$750 once off payment:
From the 12 March 2020 Australian residents receiving government assistance or a concession card holder are eligible for a $750.000 one off payment.
Early Childhood Education and Care Relief Package:
from Monday 6 April until the 28 June weekly payments will be made directly to early childhood education and care services in lieu of the Child Care Subsidy and the Additional Child Care Subsidy, to help them keep operating and secure their jobs.
Early childhood education and child care services do not need to apply for the payments, they will be paid automatically.
Payroll tax Relief:
Eligible employers who pay $6.5 million or less in Australian taxable wages, might receive a
- refund of your payroll tax for 2 months (November and December 2019); for half-yearly lodgers, this will be a pro-rata refund for November and December, and
- payroll tax holiday (i.e. no payroll tax to be paid) for 3 months (January to March 2020); for half-yearly lodgers, pro-rata relief for January-March applies to the annual return, and
- deferral of paying payroll tax for the 2020 calendar year.
As part of this relief package, the refund and payroll tax holiday do not have to be repaid.
Working from home:
When claiming a deduction for additional running costs you incur as a result of working from home, special arrangements have been announced by the ATO.
A simplified method has been introduced that allows you to claim a rate of 80 cents per hour for all your running expenses, rather than having to calculate the additional amount you incurred for specific running expenses.
This simplified method will be available to use from 1 March 2020 until 30 June 2020. You may still use one of the existing methods to calculate your running expenses if you would prefer to.