Are you confused about what your business is entitled to under the COVID-19 stimulus package? We have the experience of a CPA qualified accountant and tax agent to assist you. Passion Business Advisors is here to help.
The Federal and State Governments and banks have announced a range of measures to help businesses that have been affected by COVID-19. It is important to be aware of government assistance that is out there to ensure your business can survive this difficult period. This is a summary of the main assistance measures to help your small business.
It is vitally important that your bookkeeping is up to date, as entitlements to many of the relief measures are dependent on accurately calculating turnover for your business. You should make sure you have records in case you need to answer questions from the ATO. If you need assistance getting your books up to date, please get in touch.
Cash Flow Support
This is a payment of $1,500 per eligible employee for businesses and self-employed who have been significantly affected by Coronavirus. The payment is available until 27 September 2020. Eligibility for the payment is subject to a turnover test. There are also additional tests if your business was not trading in the previous year or where there are unusual circumstances that affect your turnover.
If you think you may be eligible for this payment, you should apply as soon as possible as you must opt in to receive payment and cut-off dates fast approaching. To receive payment for March, you must enrol and have paid eligible employees before 8 May 2020. If you need more time, the final cut-off date for enrolment is 31 May 2020, however, to qualify for payments for April 2020, you should ensure that you have paid employees before 8 May 2020. Information regarding the payment is still being released regularly.
Treasury fact sheets provide further information: https://treasury.gov.au/coronavirus/jobkeeper
Cash flow Support
For those businesses employing staff, the government is providing a tax-free cash flow boost to eligible businesses. The cash flow boost is between $20,000 and $100,000 and payment is delivered through a credit to the Business Activity Statement. If you are entitled to the cash flow boost, you must lodge your relevant Activity Statement and credits will be applied from 28 April 2020.
For further information regarding eligibility, refer to the treasury fact sheet https://treasury.gov.au/sites/default/files/2020-04/fact_sheet-boosting_cash_flow_for_employers.pdf
If you employ an apprentice or trainee, you may be eligible for the government assistance program to support the retention of apprentices and trainees. The measure provides a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for the period 1 January 2020 to 30 September 2020. The payment is a maximum of $21,000 per eligible apprentice or trainee (or $7,000 per quarter). To be eligible, your business must have fewer than 20 employees, have an apprentice or trainee that began training on or before 1 March 2020 and your business must retain the employee.
If you hire an apprentice or trainee that has been displaced from another employer, you may be eligible to apply for the subsidy. Further information can be found at https://treasury.gov.au/sites/default/files/2020-04/fact_sheet-supporting_apprentices_and_trainees_0.pdf
Payroll Tax Relief
The state governments have announced various payroll tax relief measures. Check with the Office of State Revenue in your relevant state for more information.
Temporary Release of Superannuation
You may be able to access a payment of $10,000 from your superannuation fund between now and June 2020 and a further payment of $10,000 after 1 July 2020. For eligibility criteria, refer to: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet-Early_Access_to_Super.pdf
Small Business Grants
State governments are also providing support packages to small businesses who are suffering as a result of COVID-19.
Here are a few that are available:
NSW – Small Business COVID-19 Support Grant https://www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant
VIC – Business Support Fund
TAS – Small Business Emergency support Grant
SA – Small Business Grant
NT – Small Business Survival Fund
QLD – Interest Free Loans
State Governments are also offering additional support in the form of training and advice. Contact your relevant State Government website for further information on your eligibility.
There are a range of measures available to help tenants during this difficult time. They include a hold on evictions for the next 6 months for tenants in financial hardship due to Coronavirus and a code of conduct for commercial tenancies. The code of conduct means that tenants with turnover under $50 million who are eligible for the JobKeeper payment will be eligible for a reduction in rent based on the decline in turnover experienced by the tenant. You should contact your relevant State or Territory government website for more information.
State governments have also released land tax relief measures for residential and SME commercial tenants who are suffering due to COVID-19. You should contact your relevant State or Territory government website for more information.
Temporary Relief for Financially Distressed Businesses
The government has provided a temporary solution to those businesses which are otherwise profitable but have been experiencing temporary financial distress due to Coronavirus. The measures include placing a temporary increase in the threshold which creditors can issue a statutory demand on a company and increasing the time the company has to respond, as well as relief for directors personal liability for trading while insolvent.
The ATO will also be providing solutions such as payment deferrals or reduction in payments for those businesses struggling due to Coronavirus. Further information is available here: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf
Instant Asset Write-Off & Backing Business Investment
The instant asset write-off threshold has been increased from $30,000 to $150,000 until 30 June 2020 for businesses with turnover under $500 million. New or second-hand assets purchased and first used or installed ready for use before 30 June 2020 will be eligible for the write-off.
In addition to this, a further investment incentive has been introduced for businesses with turnover below $500 million which provides a deduction of 50 per cent of the cost of an asset and existing depreciation rules applying to the balance of cost. This measure will apply until 30 June 2021.
For further information visit: https://treasury.gov.au/sites/default/files/2020-04/Fact_Sheet-Delivering_support_for_business_investment.pdf
Access to credit
The government is providing a Coronavirus SME Guarantee Scheme where the government will provide SMEs increased access to funding to get through the months ahead. The terms are as follows:
- Government will provide a 50 per cent guarantee on unsecured loans for loans of up to three years.
- There is an initial six month repayment holiday (interest will still accrue).
- The Guarantee Scheme is available to businesses with turnover under $50 million.
- Available on loans up to $250,000 per borrower.
The Government is also providing an exemption from responsible lending obligations for lenders when providing credit to existing small business customers. The measure is designed to help businesses get access to funding quickly and with less red tape. See the Treasury website for more information and list of participating lenders: https://treasury.gov.au/coronavirus/sme-guarantee-scheme
Further details on all of the above measures can be found on the Treasury website https://treasury.gov.au/coronavirus. With so much information available, it is important to ensure that you consult reputable sources. Government agency websites that can provide more information are listed below:
If you are not sure about entitlements for your business and would like some assistance, contact us to arrange a free consultation. We are here to help.