The government recently announced several stimulus packages to help small & medium businesses manage the impacts of COVID-19. To assist you establish what might be available in these packages for you; here is a brief summary
Government Assistance Packages
There are a number of stimulus packages currently being offered by the federal government.
Option 1 – Your business has an aggregate annual turnover less than $500 Million (based on the last financial year)?
If you fit this category then you qualify for:
- an instant asset write off of up to $150,000
- a 15-month investment scheme that will give businesses a 50% deduction on the cost of eligible assets; and
Option 2 – You employ others in your business and have an aggregate annual turnover less than $50 Million (based on the last financial year)?
If you fit this category then you also qualify for:
- the Boosting Cash Flow for Employers measure – available from April 28th to cover your March BAS. Qualifying businesses will receive a minimum $10,000 and a maximum of $50,000 in this first round.
- An additional payment is also being introduced in the July – Oct 2020 period if businesses remain active. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means they will receive at least $20,000 up to a total of $100,000 under both payments.
What you will receive will vary depending upon the number of employees that you have and whether or not you pay withholding tax.
Payments may take the form of a refund on your activity statement or a credit. The credit is the governments way of waiving the employment taxes you would normally have to pay.
Option 3 – You are a sole trader and your business has been suspended or turnover has been reduced by more than 20%.
Then you qualify for:
- Early release of your superannuation savings.
The Federal Government is allowing individuals affected by the economic impacts of COVID-19 to access up to $10,000 of their superannuation savings in 2019-20 and a further $10,000 in 2020-21 ($20,000 in total).
Individuals will not need to pay tax on amounts released, and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
If you are in Victoria: Victorian Payroll tax has been waived for businesses with annual taxable wages up to $3million for 2019-20 financial year. And may reimburse eligible businesses for payroll tax already paid. They will also be able to defer payroll tax for the first quarter of 2020-21.
Victorian Land owners due to pay 2020 land tax that have at least one non-residential property and total taxable landholdings below $1 Million have the option of deferring their 2020 land tax payment until after 31 December 2020
If you are in NSW: NSW payroll tax has been waived for businesses with payrolls of up to $10 Million for three months ending 20 June 2020.
The above information is a brief summary only and does not take into account your personal needs and is not a substitute for independent professional advice. We strongly recommend that you speak to your accountant as they will be able to provide you the most suitable advice for your individual circumstance and to ensure that you are also always receiving the most up to date information.
If you would like to read more about the governments assistance packages please visit https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/boosting-cash-flow-for-employers