You could be eligible for a tax rebate or cash payment.
In response to the COVID-19 pandemic, the Australian Government has announced several initiatives to assist individuals and businesses through these trying times.
Whilst this is not an exhaustive list of the measures the Government is initiating, we will take you through some of the more relevant programs for our clients. It is also important to note that at time of publishing, these proposed measures are yet to be legislated so, we cannot guarantee these details are correct or final.
We will take you through each of the following changes so you know which incentives you may be eligible for.
For businesses, these are the new initiatives:
- Business Cashflow Assistance
- For businesses with employees
- For businesses with apprentices/trainees
- Instant Asset Write Off (IAWO) increase
- Backing Business Investment
- Other Business Support
For individuals, you could be eligible for:
- House Hold Stimulus payment
Business Cashflow Assistance – boosting cashflow for employers
Facts:
- Eligible businesses could receive 50% of their employees’ withheld tax payments back.
- This would be received in the form of a credit on your Activity Statements (either monthly or quarterly) between March and June 2020.
- The maximum Activity Statement credit is $25,000 over this period.
- To be eligible, your annual turnover must be LESS than $50 million and have employees (sole traders may not qualify).
- If you do not meet the tax threshold for tax withheld, you would receive a credit of $2,000 on your activity statement over the period.
The aim of this assistance package is to support cashflow challenges faced by businesses; more specifically to allow businesses to retain their employees and continue to pay their wages.
For more information on the proposed Cashflow Assistance for employers, see this fact sheet from the ATO.
Business Cashflow Assistance – supporting apprentices and trainees
Facts:
- Eligible businesses could apply to receive 50% of their apprentices/trainee’s wages back.
- This will be received as a reimbursement, accessible after an assessment.
- The maximum reimbursement amount is $21,000 per apprentice/trainee for their employment period between the claimable dates.
- The total claimable period is between January 1st and 30th September 2020. The apprentice/trainee must be with your business as of March 1st, 2020 to qualify.
- To be eligible, you must have less than 20 full-time apprentices/trainees.
This assistance will assist small businesses in retaining their apprentices/trainee’s over difficult months ahead. If there is no opportunity to retain your apprentices/trainees, there is support in place to organise re-employment of those individuals.
For more information on the proposed Apprentice/Trainee Support assistance, see this fact sheet from the ATO.
Instant Asset Write Off increase (IAWO)
Facts:
- Eligible businesses will be able to claim immediate deductions on their annual turnover for assets purchase for ~$150,000 or less (the cap for vehicle purchases could be limited to a maximum of $57,581)
- This IAWO increase is in effect from now until June 30th, 2020 for assets first used or installed by the end date.
- This deduction will be claimable per asset (i.e. you can write off multiple assets at $150,000 each)
- To be eligible your business must have an annual turnover of less than $500 Million.
- This will result in a lower payable tax amount at the end of the 2019/2020 financial year.
This IAWO increase will back businesses to invest in the economy to help recover from the economic impact of COVID-19.
For more information on the proposed IAWO increase, see this fact sheet from the ATO.
Backing Business Investments
Facts:
- Eligible businesses may be able to claim an extra depreciation deduction of 50% of an asset’s costs, on top of the standard 30% depreciation, in the first year.
- This will result in a tax benefit over the life of the asset, as well as provide better cash flow.
- This applies to assets purchased & first used/installed between now and June 30th, 2021.
- To be eligible your business must have an annual turnover of less than $500 Million.
This accelerated depreciation deduction scheme will allow businesses to purchase equipment, support the economy, and lower taxes over the next financial year.
For more information on the proposed Backing Business Investments scheme, see this fact sheet from the ATO.
Other business-related support
Along with the above-proposed measures, the ATO has also released a list of optional relief support, available to certain businesses facing financial difficulties.
These support options include payment deferrals, GST cycle changes, and credits, Pay As You Go (PAYG) installment variations, and low-interest tax re-payment plans.
Of particular interest is the support offered to PAYG payers. If you pay quarterly PAYG installments, you can lodge a revised activity statement for the March 2020 quarter, to vary your installment payment and potentially claim a refund for payments already made.
For more information about PAYG variations and other relief support options for businesses, visit the ATO website here.
House Hold Stimulus payments
Facts:
- Eligible individuals could receive a ONE-OFF payment of $750 (payment is per person, not per household).
- This would be received as an automatic deposit into your bank account.
- To be eligible, you must hold a certain concession card or receive a certain support payment (for a full list see here).
- You must hold an eligible concession or receive an eligible support payment as of March 12th, 2020 to receive the one-off stimulus payment.
- This one-off stimulus payment will be paid automatically from March 31st, 2020.
- If you are under 22 years of age and do not have employer leave entitlements, you may be eligible for the JobSeeker Payment.
In order to support lower-income Australians, pensioners, and income support recipients, this stimulus payment will be made to assist the increased demand on the economy.
For more information on the proposed House Hold Stimulus payment, see this see here from the ATO.
If you believe you qualify for any of these proposed initiatives summarised above and would like to know more information specific to your situation please contact us and we will be happy to help.
Again, it is also important to note that at the time of publishing, these proposed measures are yet to be legislated so we cannot guarantee they will be enacted according to these details.
There is talk of an additional stimulus package on the agenda and soon to be announced, however, this has not been confirmed at the time of posting this article. As this is passed and comes to fruition, we will update you. You can stay informed here.
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