So, what’s in it for my business (WIIFMB)?
Several economic stimulus measures have been released in the past few days which are designed to support small and medium business in Australia. These are in response to the evolving COVID-19 Pandemic.
We summarise below the key highlights of both the state and federal stimulus packages, that may assist your business over the coming weeks and months.
As you read through, please do not hesitate to contact our office on 9022 9726 if you have any questions regarding your eligibility and/ or the practical application of these measures to your business.
As noted last week, we are offering a complimentary 1-hour appointment for any of our business clients who may be concerned about the impact of the COVID-19 pandemic on their business. Please do not hesitate to contact us if required.
GOVERNMENT OF AUSTRALIA – STIMULUS MEASURES
Further to our update on the 12th March 2020, the Federal Government announced a $17.6 billion stimulus package.
The key offerings as part of this package that may benefit our small to medium business clients include:
- ASSET WRITE OFF INCREASE TO $150,000
An increase to the instant asset write-off threshold from $30,000 to $150,000, with an expansion to include those businesses with a turnover of up to less than $500 million (up from $50 million). This is in effect from 12th March 2020 until 30th June 2020.
- ACCELERATED DEPRECIATION
Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset upon installation, provided it was acquired after the 12 March 2020 ad first used or installed by 30 June 2021. There is no value asset threshold for this 50% investment incentive. Existing depreciation rules applying to the balance of the asset’s cost.
- EMPLOYER - $2,000 to $25,000 PAYMENTS
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements. Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.
Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.
Where this places the business in a refund position, the ATO will deliver the refund within 14 days. https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf
- APPRENTICE AND TRAINEE SUPPORT
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainees wage for up to 9 months from 01 January 2020 to 30 September 2020. Subsidies are also available for new employers, employing an apprentice. The subsidy of up to $21,000 ($7,000 per quarter) will be available to businesses employing fewer than 20 full-time employees. Refer to our fact sheet for further details about where to go to access this incentive and some examples of how it works. https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf
Other measures of stimulus from the federal government include:
- One-off $750 payments to eligible individuals, paid from 31 March 2020.
- Assistance for severely affected regions for businesses heavily reliant on industries such as tourism, agriculture and education.
For further information and the full media release by the federal government, go to: https://www.pm.gov.au/media/economic-stimulus-package
GOVERNMENT OF WESTERN AUSTRALIA – STIMULUS MEASURES
The Government of Western Australia released several initiatives on the 16th March 2020 designed to assist households and business in Western Australia.
For our small and medium business clients, the main benefits are potentially around some of the options of relief in State Payroll Tax.
If you are a State Payroll Tax registered lodger and payer, there are potentially three areas that will be of benefit to you:
- A $17,500 grant will be paid to employers who pay between $1m and $4m in wages per annum. This will be paid by cheque in July 2020. Please check the website for further detail to ensure you receive your grant if eligible.
- The threshold to pay state payroll tax is being increased on 1 July 2020 to $1m, from the current $950,000 changed from 1 January 2020.
- There is an option available to employers to defer their payroll tax obligations from the March 2020 return up to 30 June 2020, with payment due in full by 21 July 2020 for all periods. A deferral application must be completed for this to occur.
Further information relating to State Payroll Tax relief measures are contained here https://www.wa.gov.au/government/multi-step-guides/payroll-tax-employer-guide/covid-19-relief-payroll-tax-employer-guide
Other measures are designed to assist people and businesses in the West Australian economy include:
- A freeze to household and small business amenity increases, such items including electricity, water, motor vehicle charges, emergency services levy and public transport fares until at least 1 July 2021.
- Energy Assistance Payment (EAP) doubled to $600 to support vulnerable Western Australians, including pensioners.
This information is not designed to be general in nature and not specific advice. Please contact our office for further information and advice specific to your circumstances.
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