The Morrison Government yesterday announced their $17.6 billion economic plan to support the economy, business and employment as we continue to see the effects of the coronavirus health crisis.
“This targeted stimulus package is focused on keeping Australians in jobs, keeping businesses in business and supporting households and the Australian economy as the world deals with the significant challenges posed by the spread of COVID-19.”
Delivering cash flow assistance for businesses – $6.7 billion has been allocated to Boost Cash Flow for Employers by up to $25,000, with a minimum payment of $2,000. This tax free payment will be delivered automatically as a credit to eligible businesses in the activity statement system from the 28th of April 2020, upon the business lodging their eligible activity statements. Where this places a business in a refund position, the ATO will deliver it within 14 days.
Businesses that pay salary and wages will receive a minimum of $2,000, even if they are not required to pay tax.
Apprentice and Trainee Wage Subsidy – The government will offer employers a wage subsidy of 50% of an apprentice or trainees wage from 1 January to 30 September 2020, capped at $7000 per quarter per eligible apprentice or trainee.
Increasing the instant asset write off – The government has proposed to increase the threshold for instant asset write off from $30,000 to $150,000, and will expand access to this to businesses with aggregated annual turnover of $500 million (from $50 million). This is available only from March 12 to 30 June 2020, for new or second-hand assets first used or installed ready for use by June 30 2020.
Accelerated depreciation – The government is proposing an accelerated depreciation deduction for eligible assets acquired from 12 March and first used or installed by 30 June 2021. Eligible taxpayers will receive a deduction of 50% of the cost of the eligible asset on installation. Existing depreciation rules will apply to the balance. Eligible assets are those depreciated under Division 40, which applies to Plant and Equipment assets, but not capital works depreciated under Division 43.
Direct payments to individuals – The government will make one-off payments of $750 to around 6.5 million social security, veterans and other income support recipients and eligible concession card holders in Australia.
How the ATO is supporting Australian’s affected by the coronavirus outbreak
A series of administrative measures to assist Australian’s experiencing financial hardship as a result of the COVID-19 outbreak will be put into action by the ATO. If your business has been directly impacted by the coronavirus outbreak, you are encouraged to get in contact with the ATO to discuss carious relief options. Options that may be available to you include:
- Up to four months deferral from the payment date of amounts due through the business activity statement (BAS, including PAYG installments), income tax assessments, FGT assessments and excise
- Businesses on a quarterly reporting cycle may opt into monthly GTS reporting in order to gain quicker access to GST refunds they are entitled to
- Allowing businesses to vary their PAYG installment amounts to zero for the April 2020 quarter. Businesses that vary their installments to Zero can also claim a refund for installments made for the September 2019 and December 2019 quarters
- Remitting interest and penalties incurred on or after 23 January 2020, that have been applied to tax liabilities
- Working with affected businesses to help pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans
Employers will still be required to meet their ongoing superannuation guarantee obligations for their employees.
Please note, these measures are not applied automatically to geographic locations affected. Assistance measures for those impacted by the virus will not be automatically implemented.
If you have been affected by COVID-19 and need to access relief from the ATO, contact the Emergency Support Infoline on 1800 806 218.
Please note that the information in this article is not financial advice, and all information is current as at 13 March 2020. Please visit the ATO website for the most up to date information regarding coronavirus relief and contact them if you require specific advice.
PTP clients who are affected by coronavirus can contact their accountant for more information and support through the next steps.