TOP 10 GOVERNMENT STIMULUS INITIATIVES – FOR BUSINESS OWNERS  (AS AT 7 APRIL 2020)

SUMMARY OF INITIATIVES

FOR MORE DETAIL – SEE BELOW

The Government will provide eligible employers with a payment of $1,500 per fortnight for each eligible employee for 6 months. If your turnover has reduced by more than 30% to a comparable period (of at least one month) a year ago, or you believe this may occur in coming months, you must register your interest in the program.

Purpose – to assist employers to continue to retain and pay their staff.

We note Parliament has yet to pass the legislation – following the Easter long weekend, we expect to have further clarity.

Click below to register your details:

https://www.ato.gov.au/general/gen/JobKeeper-payment/

2. CASHFLOW BOOST FOR EMPLOYERS – TAX FREE PAYMENTS/CREDITS OF BETWEEN $20K AND $100K

Businesses that employ staff (including the owners), may be eligible to receive a total payment/credit of up to $100k (with a minimum total payment of $20k) from the ATO.
At HYD we are developing a “cashflow boost” calculator which we will use when preparing/reviewing your March IAS/BAS – to show you the value of this to you in your specific circumstances, as well as expected timing.

The first phase (commencing the period ending 31 March 2020) ensures that eligible employers receive a credit up to a maximum amount of $50K. The second phase (commencing June 2020), ensures that employers receive another series of credits, equal to the credits they received under the first phase.

The credits will automatically be calculated by the ATO and employers must lodge their March 2020 activity statement to trigger the entitlement.

PAYG Withholding Registration must have been established prior to 12 March 2020. Please note you will receive a cash payment if the net result of your BAS (i.e. net GST position & plus any other amounts owing) is a refund and you don’t owe the ATO any other monies.  Otherwise you will receive a credit to your ATO account.

We can apply for a payment deferral up to 14 September 2020 for new debts incurred after 23 January 2020. This applies to BAS (including PAYG instalments), income tax assessments (businesses & individuals) and FBT. No interest or penalties will apply.

These deferrals are not automatic and must be applied for.

Critical – It is a requirement that all ATO lodgements are up to date and are kept up to date.

4. ATO CREDIT VARIATIONS & PAYMENT RELIEF OPTIONS

We can apply for a refund of September and December 2019 PAYG instalments already paid (business & personal) to reflect the downturn in your trading conditions, which may result in a refund for you.

We can also apply for a variation of your March 2020 PAYG instalments.

5. NSW PAYROLL TAX – WAIVER

Our current understanding is that your annual liability will be reduced by 25% when you lodge your annual reconciliation.

OSR’S initial advice is that no payment will be required for the months of March, April or May 2020.

You can continue to pay if you choose to do so – and whilst you are not required to enter your wages information, they advise that you continue to use the monthly calculator, as it will assist you when completing your annual reconciliation in July.

6. NSW GOVT – $10,000 GRANTS FOR BUSINESSES SEVERELY IMPACTED BY COVID-19

To be eligible, businesses will need to:

Small businesses will be able to apply online shortly through Service NSW at:
https://www.service.nsw.gov.au/campaign/covid-19-help-small-businesses

Employers (with less than 20 full time employees), who retain an apprentice or a trainee who was in training with the employer as at 1 March 2020 – may be entitled to Govt wage subsidies equal to 50% of the apprentice’s or trainee’s wage paid during the nine months from 1 January 2020 to 30 September 2020. The maximum subsidy is $21,000 per eligible employee.

Employers can register for the subsidy from early April 2020. Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprentice Support Network (AASN) provider.

8. GOVERNMENT BACKED SME LOAN GUARANTEE SCHEME (OF UP TO $250K)

 
Under the Scheme, loans of up to $250k will be provided to businesses to provide them with working capital to help pay business overheads, wages, rent etc. The Government will provide Lenders with a Guarantee for 50% of the loan. The loans will be for a period of up to 3 years, with an initial 6-month repayment holiday.

We have been advised that the loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan. We understand from NAB that an interest rate of 4.5% pa. will be payable on these loans. If you’re interested, contact your relationship manager at your bank for further details.

9. EARLY RELEASE OF SUPER

From mid-April, individuals in financial distress may (subject to firstly meeting strict requirements) be able to access up to $10,000 of their super before 30 June 2020 and a further $10,000 after that date.

The withdrawals will be tax free.

Broadly, in order to qualify you must be:

For those eligible to access their Super, you can apply directly through the myGov website from mid-April.

10. INSTANT ASSET WRITE OFF & ACCELERATED DEPRECIATION

Broadly, the instant asset write-off threshold will be increased from $30,000 to $150,000 (GST exclusive cost) for assets installed and ready for use before 30 June 2020.

In addition, there will be accelerated depreciation available for assets installed and ready for use before 30 June 2021 – allowing an immediate deduction of 50% of the cost of the asset, with existing depreciation rules applying to the balance of the asset’s cost.

If you are considering utilising these concessions, please check with us beforehand as there is some detail in the rules to consider.