In the space of 10 days the Australian Government has announced not one, but two economic stimulus packages aimed at keeping businesses operating and employees in work in response to unprecedented times the world is currently experiencing due to the COVID-19 pandemic. Currently the combined stimulus efforts sit at $66.1bn, with a third round of measure to be possibly entertained. This landscape is fast moving and constantly evolving, but we aim to bring you a comprehensive overview of the range of support and assistance available to Australia’s small business community.
Tax-free payments up to $100,000. The tax-free cash payment of up to $100,000 will be available to businesses with turnovers below $50 million. A business will get a payment equal to 100% of the tax it withholds from its workers’ wages, up to a maximum of $100,000. Eligible businesses will be able to get a minimum of $20,000 even if they are not required to withhold tax.
The instant asset threshold will increase by $120,000 from $30,000 to $150,000. They are also expanding the eligibility base by now including businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. For example, some assets that may be eligible to immediately written off are building equipment, office or shop fit out items, and work vehicles.
Government backed loans on offer to SME’s. The Federal Government will guarantee 50% through the participating bank of an eligible loan to a small or medium-sized business hit by the impact of the virus. Loans will be used for working capital be unsecured and up to $250 000 in value. The guarantee will cover loans granted within six months, from April 1. It will apply to new or existing customers of banks through the “Coronavirus SME guarantee scheme”. No repayments will need to be made for 6 months.
Apprentice and Trainee Assistance. Eligible businesses (less than 20 full-time employees) can apply for a wage subsidy of 50% of apprentices’ and trainees’ wages. This will cover the March, June, and September 2020 quarters, with a maximum of $7,000 per eligible employee paid each quarter.
ATO offering deferred payments. The Government is also offering administrative relief for certain tax obligations, including deferring tax payments up to four months on a case by case basis.
Payroll tax relief. Most State Governments have announced various forms of payroll tax relief for eligible employers, and it’s important that you review the details for each State in which you pay payroll tax.
- NSW: reduction in the 2019/20 payroll tax liability by 25% and the waiver of payroll tax payments for three months for employers with grouped Australian wages of no more than $10 million.
- QLD: Employer who pay $6.5 million or lessin Australian taxable wages, you may be eligible for a refund of your payroll tax for 2 months and a payroll tax holiday for 3 months. You can also apply for a deferral of payroll tax for the 2020 calendar year
- VIC: Businesses who have a payroll of less than 3 million will be fully refund the payroll tax already paid by small and medium businesses in the 2019-2020 financial year. Small and medium businesses will also be able to defer any payroll tax payments for the first three months of the 2020-2021 financial year, up until January 2021.
- WA: Measures include bringing forward and increasing the payroll tax threshold from 1 July 2020, allowing impacted businesses to defer payment of their returns until 21 July 2020, and providing a one-off grant payment of$17,500 to employers, whose annual taxable wages are more than $1 million and up to $4 million.
- TAS: Payroll tax liabilities will be waived for hospitality, tourism and seafood industry businesses for the last four months of 2019-20. Other businesses with payrolls of up to $5 million will be able to apply, based on the impact of virus, to have their payroll tax waived for April to June 2020.
- ACT: To be announced Friday – measures targeting commercial rates and payroll tax were included in the package.
Solvency safety net – Relaxing of insolvency and bankruptcy regulations to allow businesses to temporarily trade while insolvent.
Sole traders and self-employed eligible for Jobseeker payment – the eligibility criteria to access income support relaxed for the self-employed and sole traders.
“We want to help businesses keep going as best they can or to pause instead of falling apart,” – Scott Morrison.
We support Aussie business.
Panic and confusion will settle down soon enough and life will need to go on, things may be a bit different for a while, but we know just how resilient small business owners can be. If you do need some extra financial support through this evolving situation, you can view our business loan options here. For more information on the Governments stimulus package click here.
Disclaimer: We did our best to access Government information in an ever-changing environment. Please seek professional advice by Government, the ATO or your Accountant on these matters.