I’m loving the billions of dollars that’s being thrown at our economy by the government. To be completely honest, while it’s very reassuring to hear, I am none the wiser about what’s in it for us. As duel small business owners, my husband and I and spinning in circles trying to get a handle on the business incentives. The thing is, we don’t want to miss out, but where do we start?
So we’ve gone straight to the expert. With over 20 years of experience delivering premium tax and accounting, Michelle Jardine unpacked the COVID-19 business incentives in an easy to understand list. She’s also offered to talk with anyone from our community who still has questions outside of this article. Here’s what’s on offer:
Cash Flow Assistance for Business
- 1st Payment $10,000 to $50,000 tax free payment
- Based on 100% PAYGW amount in activity statement for March 2020 and June 2020 Qtrs. (slightly different calculation if monthly reporting)
- 2nd Payment $10,000 to $50,000 tax-free payment
- Based on 100% of PAYGW from 1st payment and is paid over the June 2020 and Sept2020 activity statements.
- These above payments are credits to ATO Integrated Client Accounts, therefore unless you have already settled your debts with the ATO these amounts will contribute to paying your Activity Statement debts.
https://treasury.gov.au/sites/default/files/2020-04/fact_sheetboosting_cash_flow_for_employers.pdf
50% Subsidy for Apprentice/Trainee Wages
- Wage subsidy of 50% apprentice/trainee wages for up to 9 months from Jan to Sept 2020.
- Available to SME employing fewer than 20 employees.
- Maximum benefit $21,000 per apprentice/trainee.
- Can register from 2 April 2020 & final claim is to be lodged by 31 December 2020 via Australia Apprenticeship Support Network (AASN) provider.
ATO Tax Payment Deferral
- Ability to vary Mar2020 PAYGI to NIL and claim a refund for PAYGI paid in Sept2019 and Dec2019 Qtrs.
- Assisting businesses t pay ATO debts including low-interest payment plans.
- Ability to remit interest and penalties incurred on or after 23 Jan 2020.
- Ability to negotiate a hold on current payment plans and defer payments up to 12 Sept 2020.
https://www.ato.gov.au/General/COVID-19/Additional-support-during-COVID-19/
Instant Asset Write off increased to $150,000
- Turnover must be below $500m.
- Asset must be installed and ready to use by 30 June 2020.
Accelerated Depreciation
- Turnover must be below $500m and not using simplified depreciation rules.
- 50% deduction of the cost and 50% balance of cost depreciation rules apply.
- Asset must be installed and ready to use by 30 June 2021.
Government-Backed Loans – SME Guarantee Scheme
- Financial Institutions will be providing the products.
- Turnover must be below $500m
- 50% guarantee on new SME loans up to $250,000;
- Operates from 1 April 2020 to 30 Sept 2020.
- 3-year term with an initial 6 months no repayments.
- No security required.
Jobkeepers Payments
- $1,500 a fortnight payment (before tax) to employers per eligible employee for a maximum of 6 months.
- Turnover below $1b and turnover must have decreased by more than 30%.
- Turnover above $1b and turnover must have decreased by more than 50%.
- Eligible employees: –
- Currently employed (including stood down or re-hired);
- Employed at 1 March 2020;
- Full-time, part-time or long-term casual (employed on a regular basis for longer than 12 months as at 1 March 2020);
- At least 16 years of age;
- An Australian citizen, permanent visa holder or Special Category (Subclass 444) visa; AND
- Not be receiving the Jobkeeper payments from another employer.
https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper
Payroll Tax Reductions
- NSW Payroll Tax:-
o Taxable wages under $10m;
o Annual liability reduced by 25% calculated at time of annual reconciliation;
o Monthly payers are not required to make March, April or May 2020 payments;
o Payroll Tax threshold will increase for 2021 Financial Year to $1m.
Income support for individuals
- Government is temporarily expanding eligibility to income support payments.
- Time-limited supplement of $550 per fortnight paid to both existing and new recipients of eligible payments.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals_0.pdf
Payment to support households
- 2 separate payments of $750 to social security, veteran and other income support recipients and concession cardholders.
- A person can be eligible to receive both payments, but can only receive 1 payment in each round of payments.
- Payment is exempt from tax and will not count as income for social security, veteran or Farm Household allowance purposes.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households_0.pdf
Temporary early release of super
- Access to up to $10,000 before 1 July 2020 then another $10,000 between 1 July and 24 Sept 2020 of which no tax will be payable on these amounts.
- Eligibility must be met for early release of superannuation:-
- You’re unemployed;
- Eligible to receive JobSeekers, Youth Allowance, Parenting Payments, Special Benefits or Farm Household allowance;
- On or after 1 January 2020:-
- You were made redundant;
- Your working hours were reduced by more than 20%; OR
- If you are a sole trader, your business income was suspended or turnover reduced more than 20%.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_2.pdf
Providing support for retirees
- Temporarily reducing superannuation minimum drawdown rates:-
- Temporarily reducing superannuation minimum drawdown requirements for retirees; Reduction applies for the 2020 and 2021 financial years;
- Reducing social security deeming rates:-
- Effective 1 May 2020;
- Upper deeming rate 2.25% and lower deeming rate will be 0.25%.
Phew, I don’t know about you but that makes so much more sense. COVID-19 has certainly changed life as we knew it. It’s hard to imagine that business could be disrupted, even completely stopped, because of a virus. Hopefully, now you have a place to start, and you can clearly see what’s on offer with the business incentives. If you need some further clarity, or you’re ready to get started, Michelle is only a phone call away.
We’ve got this Lake Mac business owners!
Check out our other articles on business here: Business articles
Contributor:
Michelle Jardine | Accounting, Taxation & Business Services
Michelle Jardine – Owner
Description: Based in Warners Bay, Michelle has been practising for over 20 years. delivering premium tax and accounting services to individuals, small business and companies. As a registered CPA, Michelle’s expertise covers accounting, taxation and business services including bookkeeping & software solutions. Michelle is a certified Xero Advisor and is extremely client-focused in her delivery. From personal tax returns to payroll services, Michelle can help make the reporting process seamless.
Phone: 0422 124 444
E: michelle@michellejardine.com.au
