Full Business Support Amidst Global Health Uncertainties
Amidst concerns surrounding the impact of COVID-19 on businesses, various measures have been taken by the Australian Government to limit economic uncertainty, support investments and protect jobs that may be affected by the rapidly evolving circumstances.
Essential information and advice for business owners:
GOVERNMENT STIMULUS PACKAGE
The Australian Government has just released a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.
The key tax and stimulus measures include:
- From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
- A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
- Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations. This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Business that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $2,000 will still be made. The minimum $2,000 payment will be applied to the first activity statement lodgement.
- Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
- Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession cardholders. It is estimated that around half of those who will benefit will be pensioners. These payments will commence to be automatically made from 31 March 2020.
BUSINESS CONTINUITY PLANNING
As a business owner, now is the time to plan for employees being away from your workplace, shortages of supply, reduction in sales, and the possibility of your workplace being closed for a short period of time if everyone is being forced to self-quarantine.
If you haven’t already, you need to have started planning for the following:
- Employees working from home, and workplace obligations
- How to pay your bills in the short term if your sales start to dry up
- How to communicate in a reassuring way with your clients and customers
- How to keep things moving with your business
Contact your advisor now if you would like assistance with planning or just to discuss your business situation. We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you and plan for what will happen in the weeks and months ahead.
UPDATE YOUR WILL AND ENDURING POWER OF ATTORNEY (EPOA) NOW
If you have to self-quarantine or are admitted to hospital, if you don’t have an EPOA then no-one else can make important business or financial decisions on your behalf.
As a business owner, it is 100% essential that you have an up to date EPOA and Will, and that your family know where these are stored.
We’ve teamed up with Abbott Morley Lawyers to offer you a fast, easy and professional way to get these documents prepared quickly.