The federal government has announced various measures of relief that small business operators can access to help them through the next few months, while Coronavirus continues to spread through the nation.
Here is a complete breakdown of everything that's on the table and how, when & where to claim.
*Update - The Federal Government has announced a further Jobkeeper Payment in the form of a wage subsidy payment. Details have been added to the post, but as legislation is yet to be passed, this post will be updated as further information becomes available.
Commonwealth Assistance Available to Companies and Sole Traders
***NEW*** Jobkeeper Payment
The $1500/ fortnight Jobkeeper wage subsidy arrangement is designed to help you keep staff on hand. Essentially if you have seen a slow down in the turnover of your business you will be eligible to receive this flat rate payment per eligible employee from 31 March 2020 to help you to pay their wages. Payments are expected to commence in May and will be backdated to March. For business with a turnover of less than $1 billion, you must anticipate a reduction in turnover of 30% compared to a similar period a year ago. If you are a sole trader you will be able to register yourself for the payment, if you are a business without employees then you will be able to register a nominated individual to receive the payment.
Action: register for the Jobkeeper payment with the ATO at: https://www.ato.gov.au/Job-keeper-payment/
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Immediate deduction for asset purchases up to $150,000 that are installed and ready for use by 30 June 2020. Businesses with a turnover of less than $500 million are eligible to claim, increasing the deduction means you pay less tax for the year.
Action: Claim in your 2020 tax return. Pro Tip* Ensure that your books are up to date & all purchase details are recorded in your fixed asset register to smooth tax time.
Accelerated depreciation rates for larger purchases. If your business purchases an asset from now to 30 June 2021 costing more than the instant asset threshold, you will be eligible to claim half of the purchase price (+ instalment costs) in the first year.
Action: Claim in your 2020 tax return
Australian Banking Association has announced that banks will now defer loan repayments for six months for small businesses who need assistance because of COVID-19, although interest will continue to accrue on the loans, repayment of for the relief period will be covered over the life of the loan, with nothing to be repaid for the first 6 months. Banks are also offering low interest rate loans, no repayments for 6 months and easier access to finance through government backed loans (meaning the government will guarantee half of the loan amount). These relief measures are now available to 98% of all businesses with loans with an Australian Bank.
Action: Visit https://www.ausbanking.org.au/covid-19-relief-faqs/ or call your bank now. Pro Tip* Make sure your books are up to date, or have your accountant contact the bank. Having up to date financials on hand can speed up the process for loan applications.
ATO assistance the ATO is providing one on one support for business's - including low interest payment plans, reversal of penalties & interest and allowing businesses to change from quarterly BAS to monthly BAS's (so you can get your GST refund's faster). They will also let you vary PAYG amounts reported on prior BAS's.
Action: you can contact the ATO on 1800 806 218 or speak to us.
Additional Tips for Sole Traders
Those earning less than $1,075 a fortnight can also apply for the Jobseeker allowance and the Coronavirus supplement (an additional fortnightly payment of $550). The asset's test and some of the usual waiting period's have also been waived, to allow quicker access to payments. ***Note: you may be eligible for the Jobkeeper payment instead, please see the details outlines in the article above and if you are eligible register at: https://www.ato.gov.au/Job-keeper-payment/. You do not need to withdraw your application for Jobseeker payment if you have already submitted it.***
If your business has suspended or your turnover has dropped down by 20% or more, you can also get early access to up to $10,000 from your superannuation fund before 30 June 2020. You may be eligible for another $10,000 after 1 July 2020. Note - we are not financial advisors, and cannot advise on the suitability of such an option for you. This post is for information only, if you do consider this option you must consider your own investment strategy and your personal financial circumstances. You may chose to speak to a financial advisor before making any withdrawals of super.
Action: If you do chose to make the withdrawal from super after considering your own specific circumstances &/or speaking with a financial advisor you can make this claim by logging into your Mygov account (https://my.gov.au/) to claim.
Additional Tips for Companies
Temporary changes have been made in relation to Corporations Act requirements, director's will not be held personally liable for trading while insolvent
Increases in the threshold at which creditors can issue a statutory demand and have increased the time for companies to respond to such demands.
Action: Speak to your accountant if you have received a statutory demand from a creditor or if you fear you are insolvent.
State Government Assistance Measures
The state and territory governments are pitching in by reducing, deferring or waiving payroll tax obligations (depending on the size of the payroll and nature of business). Further reductions and waivers of licencing and registration fees are also on offer for business in various sectors. See your state revenue website for further information or give us a call.
We are ready to go for BAS season! If you like to work with us, please Contact Us. Our specialist staff are on hand to help, if you would like to maximise your claim please give us a call.