On 22 March the Government announced a second set of economic responses which, combined with previous actions, total $189 billion across the forward estimates. This is the latest update of support to households and businesses aimed at absorbing significant economic consequences of the Coronavirus.
Further to our correspondence on 16.03.2020, the following is an update of the announcements (some of which we previous wrote about) as a result of COVID-19:
Increases to the Instant Asset Write-Off
The instant 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 new and second hand assets purchased from the 12th March 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 new assets purchased (and not second hand) from the 12th March until 30 June 2021 (but excludes instant asset write-offs as per above).
Please discuss with us any planned new asset purchase, as the level of deduction now allowed could disadvantage your position in other ways and to ensure that this applies to the particular asset you are acquiring.
Tax Free Payment to Employers
Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. Not-for-profit entities including charities, will now also be eligible.
Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. This portion will be delivered through the March to June activity statements.
An additional payment is also being delivered in the June to September activity statements. Eligible entities will receive an additional payment equal to the total of all of the boosting cash flow for employers payments they have received. This means that eligible entities will receive at least $20,000 and up to a total of $100,000 under both payments.
Please contact us to help us explain how this relates to your individual business circumstance.
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 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, which notably excludes any apprenticeships if the business has already accessed a Australian Apprentice Wage Subsidy (AAWS).
Supporting Individuals and Households
This assistance includes:
To be eligible, you must meet one of the following conditions:
It is expected that claims can be made from mid-April
Supporting the Flow of Credit
Businesses with turnover of up to $50m will be eligible to apply to the banks for up to $250,000 of borrowings with the following features:
Loans under this scheme are expected to be available to businesses from early April 2020.
If you have any questions or would like to discuss any of these topics further, we urge you to make an appointment. We understand the growing health concerns of COVID-19, so to ensure we can support our clients and protect the health of our staff at the same time, our first preference will be a phone call or video appointment, however face-to-face meetings are still possible in the right circumstances.
– James Davis & Kanista Arokianathan
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.