We are all in shock at both the personal and financial devastation caused by Covid-19. Australia's initial strategy of relying on herd immunity through suppression is being ramped up with stricter travel and social distancing guidelines being introduced every day. This has been recognised by the Federal Government which has been revising their financial assistance packages on a weekly basis.
Small Business Assistance
The response by both State and Federal Governments to assist small business to retain their staff through these troubling times has been impressive and is a reflection of the gravity of the effect on the economy. While the incentives are generous, the cost to fund them will be enormous. I wouldn't be surprised to see our GST Rate lifted to match New Zealand's Rate of 15% in the not to distant future. Why not, they seem to be taking the lead with their response to Covid-19 as well at the moment!
Here is a summary of assistance that has been made available to Small Business:
Boosting Cash Flow for Employers
- Companies who were registered as PAYG Withholders prior to the 12th of March will receive a full refund of their PAYG Withheld over the 6 months from January to June 2020 up to a minimum of $10,000 and maximum of $100,000.
- Quarterly withholders payments will reflect the PAYG Withheld Totals in their March and June 2020 BAS's
- Monthly withholders will only report one months worth of PAYG in their March BAS and will therefore be entitled to 300% of the PAYG withheld int he March BAS in addition to their April IAS, May IAS and June 2020 BAS.
- Important Note: If you have an outstanding Directors Loan or take your "salary" as a dividend or Directors Loan, you may want to explore changing the treatment of your remuneration to salary to maximise your "cashback".
- You will receive a minimum of $10,000 cashback even if are registered for PAYG Withholding but did not pay any wages.
Subsidy for Apprentices and Trainees
A 50% subsidy of up to $21,000 is available for wages paid from 1 January to 30 September 2020
Immediate Write off for Investments
The previous Investments Incentive of a 100% write-off for assets costing up to $30,000 has been increased to $150,000 for assets purchased prior to 30 June 2020. This will revert to a 50% immediate write-off for the 2021 Financial Year.
Important Note: If you are looking investing in capital equipment or perhaps a new company car in the near future then it would be beneficial to make the purchase before 30 June 2020.
Government Underwritten Cashflow Loans
The government will provide a guarantee of 50% to banks to support new short-term unsecured loand to SME's.
Payroll Tax Relief
Most States are offering a refund of Payroll Tax paid in the last 2 months as well as a payroll tax holiday for the next 3 months.
Please feel free to contact us to find out more about how to utilise the these business incentives to ensure your business survives this unforeseen period.