COVID-19 - Summarising the Government's and ATO's measures for businesses
Businesses in Australia will be differently affected by the impact of the COVID-19 virus on the economy and how it affects their customers, suppliers, employees and other stakeholders.
The government and the Australian Taxation Office (ATO) have both announced a number of support measures for business. All impacted businesses should be aware of how the government measures will apply to them and they should work out whether any of the ATO concessions should be sought.
The government’s recent business support package contained a number of measures which will be of assistance to Australian businesses turning over less than $500 million.
These can be summarised as:
1. A tax free credit against a business’ activity statements, up to a maximum of $25,000. The amount to be received is determined by the amount of PAYG withholding that a business makes. The full amount will be received where a business withholds at least $50,000 in the activity statements due to be lodged during April to July inclusive.
For further information, click here to see the Treasury document "Cash flow assistance for businesses"
2. An increased threshold for the 100% depreciation instant write off. This increases from $30,000 to $150,000 in respect of new or second-hand items installed and ready for use up until 30 June 2020.
For further information, click here to see Treasury document "Delivering support for business investment."
3. A new 50% depreciation instant write off for new (not second hand) items installed ready for use from now up until 30 June 2021. This does not have a limit and would be used for items first installed ready for use after 1 July 2020 or for items costing more than $150,000 purchased before 30 June 2020. 50% of the cost of the item is an immediate tax deduction and the other 50% is depreciated at ordinary rates.
For further information, click here to see Treasury document headed "Backing Business Investment"
4. A wage subsidy of 50% an apprentice’s or trainee’s wage paid during the nine 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). The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
For further information, click here to see attached Treasury document headed, 'Supporting Apprentices and Trainees"
In addition, the Australian Taxation Office (ATO) has announced a number of concessions for business payment of amounts payable. This involves extended payment dates (lodgements still need to be on time); possible refund of September and December income tax instalments and remitting of interest and penalties for amounts payable. My discussions with the service and their checking with technical specialists revealed that some of the finer detail has not been fully worked through as yet. It appears that some demonstration that the virus has impacted on your business is necessary before the concessions can be accessed and they are made available by application.
For further information, click here.