Government Stimulus Package Response to the Coronavirus
In response to the anticipated economic downturn resulting from the Coronavirus pandemic, the government has announced a number of economic stimulus measures for the 2019/20 and 2020/21 income years. Most of these are targeted to help small to medium sized businesses. The announced measures at this stage are:
Instant asset write-off
For businesses with under $500m in turnover, they will be able to claim an instant asset write-off of asset purchases of up to $150,000 (previously $30,000). These assets need to be purchased after 12th March 2020 and be installed ready for use by 30th June 2020.
Extra 50% depreciation deduction on assets above $150,000
On any assets purchases not immediately written off (ie assets costing more than $150,000), there will be an additional 50% depreciation deduction over and above the normal depreciation deduction for these assets.
BAS credit of up to $25,000 for employers
Businesses with an annual turnover of less than $50 million and that have employees will be eligible for a credit equal to 50% of their withholding liability on the 31 March 2020 and 30 June 2020 quarterly BAS.
This credit will be automatically applied to the BAS and there is nothing for businesses to do or change on the BAS. For further information please see the factsheet from the Australian Government.
Support for Apprentices and Trainees
Small businesses employing less than 20 full time employees can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Further information is available at:
ATO signals flexible approach
The ATO has signalled a flexible approach in the way it will handle taxpayers’ affairs over the coming months. The measures will include:
- up to a four month deferral of the payment date of amounts due through the business activity statement, including PAYG instalments, income tax assessments, fringe benefits tax assessments and excise.
- Allowing quarterly GST reporting businesses to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the April 2020 quarter. Businesses that vary their PAYG instalment to zero will also be allowed to claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Looking to remit any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and allowing affected business to pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
Unlike the bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented. Businesses can contact the ATO on its 1800 806 218 Emergency Support Infoline to discuss their situation.
Please see the Australian Government’s response to the Coronavirus for more information.