With the outbreak of COVID-19 the government has announced two stimulus packages to support businesses to manage cash flow challenges and help businesses retain their employees. These two measures are designed to support employing small and medium enterprises and to improve business confidence. The Victorian government has also announced that it will refund the first three quarters of Payroll tax in this financial year to businesses with less than $3 million in payroll.
An immediate asset write-off
The current immediate asset write-off threshold has increased from $30,000 to $150,000. This will be available from Thursday 12 March 2020 until 30 June 2020.
The announcement includes a 50% write-off for the cost base of depreciable assets (those not eligible for immediate asset write off), with existing depreciation rules applying to the balance. This is applicable from Thursday 12 March 2020 until 30 June 2021, for those businesses that have an aggregated turnover of less than $500m.
BAS Cash flow assistance
A tax-free payment of between $20,000 and $100,000 will be made to businesses to cover 100% of PAYG withheld for the period between 1 January 2020 and 30 September 2020. A minimum of $10,000 will be paid to employers even if they are not required to withhold PAYG. This will be paid via a credit to ATO accounts once a business lodges its BAS/IAS.
Apprentice & Trainee wage subsidy
Employers with less than 20 full time employees can apply for a 50% subsidy for apprentice or trainee wages. This will be available for wages paid between 1 January 2020 and 30 September 2020, with the maximum subsidy per apprentice or trainee to be $21,000.
The Government has announced it will ease tax obligations and extended payment terms for tax debts.
Loans up to $250,000 available
The federal government will guarantee 50% of the principal of loans with banks up to $250,000. There will be a payment free period for the first six months.
Relief for financially distressed business
For six months the threshold for statutory demand (a common way for a company to enter into liquidation) has been increased from $2,000 to $20,000. The timeframe for a company to respond to a statutory demand will increase from 21 days to six months.
We are available for appointments throughout this time via phone only. Please call 03 5523 8444 to book with one of our staff.