Please find below a breakdown of the various stimulus packages currently available.
Backing business incentive
- The cash flow boost has been enhanced and up to $100,000 is now available and is split into 2 periods.
- The first period is Jan to Jun 2020 and up to $50000 is available. The payment is now 100% of the PAYG up from 50%. (PAYG is the tax taken from employee wages.)
- The payment is tax free and is calculated automatically by the ATO based on the activity and instalment statements lodged. (BAS/IAS) The payment will be a credit on your tax account from 28 April 2020, if there is no debt then a refund will occur.
- The minimum payment has increased from $2000 to $20000. The payment for the first period will be $10000.
- To qualify for the second period the entity must continue to be active. The second period is Jul to Oct 2020 and entities will receive an additional payment equal to the first period. A quarter of the payment will be received in Jul/Aug/Sep/Oct.
- Applies to businesses with turnover under $50 million and that employ workers.
Business Loans Repayment Deferrals
Businesses can defer principle and interest repayments for up to six months. Some banks are also waiving merchant terminal fees. Contact your bank for their specific options.
Deferred ATO Payments and PAYG Instalments
- Payments can be deferred for up to 4 months.
- These include payments for Business Activity Statement, Income Tax and Fringe Benefits
- Businesses can vary PAYG instalments to $0 on the March BAS. A refund can also be claimed for any instalments from September 2019 and December 2019
- These are not automatic and need to be applied for so contact us or your accountant should you wish to explore these options.
Supporting Apprentices and Trainees
- Eligible employees can apply for a wage subsidy of 50% of their apprentice’s or trainee’s wage.
- The eligible period of 1st January to 30th September 2020. Employers will be reimbursed up to a maximum of $21000 per eligible employee.
- It will be paid at $7000 per quarter.
- To be eligible you must have fewer than 20 full time employees. They must be in training as at 1st March 2020.
- An eligibility assessment must be undertaken by an Australian Apprenticeship Support Network (AASN) provider.
- Employers can register for the subsidy from early April 2020; final claims for payment must be lodged by 31 December 2020.
- Contact an AASN provider for further information.
Supporting the flow of credit
- The Government and the Reserve Bank have coordinated to ensure the flow of credit.
- Under the Coronavirus SME Guarantee Scheme, the government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs.
- The scheme will guarantee up to $40 billion of new lending. SMEs with a turnover of up to $50 million will be eligible Maximum total size of the loans of $250000
- Loans will be up to three years with an initial 6 month repayment holiday
- The loans will be in the form of unsecured finance meaning borrowers won’t have to provide an asses as security,
- The scheme will commence early April 2020 and be available for new loans until 30 September 2020
- The government is providing an exemption from the responsible lending obligations for lenders providing credit to existing small business customers. This goes for 6 months.
- The RBA has announced a term funding facility for the banking system; it is $90 billion at a fixed rate of 0.25 per cent. To encourage lending to businesses with particular incentives applying to new loans to SMEs.
Temporary relief for financially distressed businesses
- Changes to how statutory demands can be issued: temporary increase in the threshold from $2000 to $20000 and the time to respond from 21 days to 6 months.
- Changes to bankruptcy proceedings: temporary increase in the threshold from $5000 to $20000 and extended time periods.
- Temporary relief for directors from any personal liability for trading while insolvent. This will apply for 6 months.
- For owners or directors of a business that are currently struggling due to the Coronavirus the ATO will tailor solutions including reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Increasing the instant asset write-off
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing Business Investment
The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.