Important information for Australian Small Business Owners Affected by the 2020 Coronavirus/COVID-19 outbreak.
Brought to you by RA Advisory
The COVID 19 Stimulus & Support Measures Available to Small Businesses
Cash flow boost
- Temporary cash flow support to eligible small businesses that employ employees
- Will be delivered as credits in the activity statement system, and will generally be equivalent to the amount withheld from wages paid to employees for each monthly or quarterly period from March to June 2020
- Eligible businesses and not-for-profit (NFP) organisations will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020. If this places a small business in a refund position, the ATO will deliver the refund within 14 days.
- You must lodge your activity statements to receive the cash flow boost
- If you have a lodgment deferral in place, you will need to contact the ATO and provide more information to confirm your eligibility. You can check the website ato.gov.au/cashflowboost for information on how to contact them and what information and supporting documentation you will need to provide
Under the JobKeeper Payment, if your business is impacted by the coronavirus/COVID-19, you can access a subsidy from the Government to continue paying your employees.
If you have been affected by the crisis, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. This applies to employees who are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020).
You are eligible to access this subsidy and distribute it to your employees if:
- Your business has a turnover of less than $1 billion and their turnover has fallen by more than 30 percent (of at least a month); or
- Your business has a turnover of $1 billion or more and this turnover has fallen by more than 50 percent (of at least a month);
- Your business is not subject to the Major Bank Levy
Your employees must have been in an employment relationship with you as at 1 March 2020, and must be currently engaged in order to receive JobKeeper Payments from your business.
For more information, please visit
- Visit ato.gov.au/jobkeeper
- To access the JobKeeper guides for Sole traders, Employers reporting through STP and Employers not reporting through STP visit ato.gov.au/general/jobkeeper-payment/Indetail/JobKeeper-guide
Instant asset write-off
- Threshold increased from $30,000 to $150,000 for each asset
- Access expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million)
- Applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this timeframe
- For certain new assets that cost more than the instant asset write-off threshold you may still be eligible to claim a faster deduction for the decline in value of your new assets by using the new accelerated depreciation measure
- It applies to businesses with an aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years
- For each new asset, the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose
- The usual depreciating asset arrangements apply in the subsequent income years that the asset is held
- Eligibility and rules apply, visit: ato.gov.au/coronavirus
Temporary relief for financially distressed businesses
- Statutory demands:
- -temporarily increasing the threshold at which creditors can issue a statutory demand on a company
- -temporarily increasing the time companies have to respond to statutory demands they receive
- Also includes temporary relief for directors from any personal liability for trading while insolvent
- The ATO will tailor solutions for owners or directors of business that are currently struggling due to the COVID-19
Early access to superannuation
- Eligible sole traders or individuals can access a portion of their superannuation
- No tax on amounts released
- The money you withdraw will not be taken into account for any income or means tests.
- Eligible sole traders can apply online through myGov
- Up to $10,000 before 1/7/20
- Access up to further $10,000 from 1/7/20 to 24/9/20
Other Government agency support
- 50 per cent wage subsidy for an apprentice or trainee paid from 1/1/20 to 30/9/20
- – Register for the subsidy from early April 2020.
- – For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.
- 50 per cent guarantee to SME lenders to support new short-term unsecured loans to small and medium enterprises
- Six-month exemption from responsible lending obligations for lenders providing credit to existing small business customers; applies to credit for business purposes including:
- – new credit
- – credit limit increases
- – credit variations and restructures
- Visit the treasury website for more information: treasury.gov.au
ATO relief options
- Payment deferrals – for due dates up to 12 September 2020
- – Income tax
- – Activity statement
- – Pay as you go instalments
- – Fringe benefits tax
- – Excise payment
- – Deferrals apply to payments only – lodgment obligations remain the same
- GST reporting cycle – monthly reporting = monthly refunds (if refund is due)
- can only change at the start of a quarter
- if you change, can’t change again for 12 months
- doesn’t affect pay as you go withholding reporting
- does affect fuel tax credits reporting
- -Action through your agent or phone 13 28 66
- Vary pay as you go instalments
- -Lodge a revised activity statement
- before your instalment is due
- before you lodge your tax return
- – Claim a refund for instalments made during 2019-20
- – Penalties won’t be applied or interest charged to varied instalments for 2019-20 financial year
- Contact the ATO to discuss remitting interest and penalties incurred after 23/1/20 or to enter a low interest payment plan if you need help to pay your tax liabilities
- ATO Emergency support line 1800 806 218 (Mon-Fri 8am-10pm / Sat-Sun 10am-4pm EST)
Need To Know More?
Due to the Coronavirus/COVID-19 outbreak, things are changing daily and life has never been
more stressful for small business owners.
Right now, you need the support of a highly informed and proactive accountant more than ever.
Just this week, RA Advisory was able to save one client $12k with a single phone call to the tax office. We are motivated and proud to share our financial expertise to help your business through these highly unusual times.
Please contact us if there is anything at all that you need in terms of information or support for your small business. We are looking forward to helping you stay on track and prepare for a positive future in the months to come.