Australian Governments Coronavirus Stimulus Package for Businesses
Credits coming to your Activity Statements
In response to the potential economic downturn which may be caused by the Coronavirus pandemic, the government has issued an announcement which will help with your cash flow. This assistance will be in the form of a “credit” to your Activity Statements between now and June 2020. The government will allow this credit against your PAYG tax withheld on staff wages. That is, you will only have to pay 50% of the PAYG tax withheld on your upcoming Activity Statements. This benefit is capped at $25,000 for your business. We will keep you up to date on any further developments. However, at this stage you can expect to see these credits when you lodge your Activity Statements.
Instant asset stimulus package for 2020 purchases
All businesses with turnover under $500m will have an opportunity to utilise the instant asset write-off for, at least, some portion of the 2019/20 income year. The Government Coronavirus Stimulus Package includes a measure where all businesses under the turnover threshold can immediately deduct assets which cost less than $150k. If you are a business which, up to now, has been unable to take part in the instant asset write-off, the stipulations for claiming the deductions are as that the asset must:
be mainly used in the business
have been purchased after 12 March 2020, and
be installed and first ready for use by 30 June 2020.
All business with less than $50m in turnover already had instant asset write-offs in place. The current $30k limit has been moved to $150k.
Accelerated depreciation for new assets
If you have purchased an asset during the current income year (2019/20) where you cannot claim an immediate write-off, you will get an additional 50% deduction in depreciation. That is, 50% of the asset’s cost, significantly reducing your potential tax liability. We will review your current situation and advise you whether it may be prudent to complete a significant tax estimate for the 2019/20 income year. This may result is reduced PAYG instalments for the March BAS, which in turn can assist with cash flow.
Small business employers of apprentices to get stimulus package
The government has introduced a wage subsidy to support small businesses in retaining their apprentices and trainees. You may be eligible to receive 50 per cent of their apprentice’s wages, capping at $21,000, per apprentice, for the nine months from 1 January 2020 to 30 September 2020. Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network provider. Like other assessments, this is expected to be completed via a SmartForm on the Australian Apprenticeship website. Employers can register for the subsidy from 31 March 2020, and final claims of payment must be lodged by 31 December 2020. We recommend that you review your staffing arrangements, and if you believe that you have eligible apprentices, to apply for this government subsidy. The apprentice is required to be on your books as at 1 March 2020 to be eligible.