The Government recently released numerous announcements regarding Coronavirus, the impacts and what support is available to you and your business during this time. These announcements cover many diverse areas, so with the information available to us, we have deciphered how these changes could affect you.

Economic Stimulus Package

The recent economic challenges Australia is facing as a result of the combined effect of the Coronavirus, bushfires and drought, have created a number of significant challenges to many taxpayers. On 12 March 2020 and 22 March 2020 the Government announced stimulus packages targeted to support business investment and provide cash flow assistance for small and medium sized businesses and individuals.

As is usual when the Government makes announcements – the devil is in the detail (and the legislation – which is yet to come). HQB have now researched all the proposed initiatives and are ready to assist you in receiving the best outcome from these incentives. If you would like to discuss how this may impact you, please contact us to make an appointment.

New Asset Purchases

Increases to the Instant Asset Write-Off

The instant new asset write-off threshold has been increased from $30,000 to $150,000 for all businesses with an aggregate turnover of less than $500 million (previously $50 million). This applies to assets purchased from the date of the announcement to 30 June 2020.

Accelerated Depreciation Deductions

For businesses with a turnover of less than $500 million, that purchase a new asset, will receive an incentive accelerating depreciation deduction of 50 per cent of the asset cost in the year of purchase. This applies to assets purchased from the date of the announcement until 30 June 2021.

Please discuss with us any planned new asset purchase, as the level of deduction now allowed could disadvantage your position in other ways.

Tax Free Payment to Employers (updated as at 23.03.2020)

This provides a tax free payment of up to $25,000 $100,000 for employers with turnover less than $50 million. The payment will be calculated based on 50 100 per cent of the amount withheld on employees’ salary and wages.  A minimum of payment of $2,000 $20,000 will apply to eligible employers who are not required to withhold tax. The credit will be delivered by the ATO as a credit within the upcoming quarterly or monthly Activity Statements (March to June September 2020) .

  • For the monthly PAYG withholding payers, the March benefit will be increased to 150 300% of the amount withheld to notionally cover the January and February months. The outcome will be that there is no requirement to make a payment for the March PAYG Withholding amount – and the March BAS payment will be reduced by the net refund arising. The benefits you will receive in subsequent months will be reduced by the increased March benefit.
  • For the quarterly PAYG withholding payers, the credit will be calculated by us and included in our BAS letter to you.

Supporting Businesses with Apprentices & Trainees

A wage subsidy of up to $21,000 per eligible apprentice or trainee is available for employers of fewer than 20 full time employees for the 9 months from 1 January 2020 to 30 September 2020. The subsidy is calculated on 50 per cent of the eligible apprentice or trainees wage and paid quarterly (a maximum of $7,000 per quarter). You will need to have an eligibility assessment undertaken by an AASN provider.

$750 Cash Payment to Eligible Individuals (more changes have been announced as of 23.03.2020)

A one-off payment Two payments of $750 will be given to persons receiving an eligible social security payment. This amount will be paid automatically to the recipients nominated bank account (paid 31 March and 13 July). For persons who are not in receipt of an eligible social security payment, there will be no payment being provided to you.

There is also a new Coronavirus supplement of $550 per fortnight paid to recipients of job seekers, youth allowance and parenting payments commencing from 27 April 2020.

If you have any questions or would like to discuss any of these topics further, we urge you to make an appointment with your trusted accountant at HQB.

– Ian Hogbin & Jenny Booth

Posted 16.03.2020

Updated 23.03.2020

 This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.

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