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Covid 19 Release II Of Business Stimulus Package

Covid-19 Release II Of Business Stimulus Package


COVID-19 LATEST UPDATE – 23rd March 2020 

Aegis Business Services is here to support you!


DISCLAIMER: The below is based on current information available and may change when the legislation is written and passed by parliament.  


As we are sure you are aware from all the media hype over the weekend the Australian Government has released a second Stimulus Package that has raised the initial injection of $17.6 billion to $189 billion.  Below we have highlighted the changes that have come through and once Parliament sits tomorrow (Tuesday) we will be able to advise you individually on your situation.  Please note the points highlighted below relate to businesses and there is additional support available for individuals that can be reviewed in the following link: 

https://treasury.gov.au/coronavirus/households 


Major changes have been highlighted in red


BAS/IAS Relief

Rebate of PAYGW paid to ATO for the periods 1 January 2020 to 30 June 2020 30 September 2020 by way of a credit against the reported BAS/IAS – if it results in a refund this will be paid within 14 days.  

Points to Note:  

  • Turnover must be less than $50 million, includes non-for-profits & charities that employ people.  
  • Based on 50% 100% of PAYG Withheld 
  • Must employ staff & withhold PAYG from employee wages  
  • Minimum available to all businesses which pay wages is $2,000 $20,000 even if not required to withhold tax  
  • Maximum available is $25,000 $100,000 over the six-month nine month period  
  • Must lodge Business Activity Statements (BAS) to qualify  
  • Expected to benefit 690,000 business employing around 7.8 million people  

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf 

 

Coronavirus SME Guarantee Scheme – New component 

Under the Scheme, the Government will provide a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.  

SMEs with a turnover of up to $50 million will be eligible to receive these loans.  

Points to Note:  

• Maximum total size of loans of $250,000 per borrower.  
• The loans will be up to three years, with an initial six month repayment holiday.  
• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.  
• The scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.      

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf 

PAYG Income Tax Instalments RevisionNo changes proposed 

If turnover for the 1 January 2020 to 30 June 2020 period is expected to reduce in your business we suggest we consider revising the Income Tax in the Q3 BAS (1 January 2020 to 31 March 2020) reporting with the likelihood that if Q1 & Q2 payments exceed the new Income Tax calculation a refund will be paid.  

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/?page=1#Pay_as_you_go_instalments  

Apprentice & Trainees Support  - No changes proposed 

As an employer of an apprentice or trainee you may be eligible for a 50% wage subsidy of the apprentice or trainees’ wages paid during the 9 month period of 1 January 2020 to 30 September 2020.  

Points to Note:  

  • Must have fewer than 20 full-time employees who retain an apprentice or trainee  
  • Apprentice or trainee must be in training as at 1 March 2020  
  • Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter)  
  • Expected to benefit 70,000 small business employing around 117,000 apprentices or trainees.  

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf 

Increasing Instant Assets Tax Write-off No changes proposed 

For businesses with turnover below $500 million the threshold for instant asset write-off has increased from $30,000 to $150,000. This is available through to 30 June 2020.  

Before purchasing a fixed asset please feel free to contact us to discuss your situation.  

https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf 

Accelerated Depreciation DeductionsNo changes proposed 

For businesses with turnover below $500 million you will be able to immediately deduct 50 per cent of the asset cost in the year of purchase with the balance of the asset cost being depreciated at the existing rates. This is available through to 30 June 2021.  

Before purchasing a fixed asset please feel free to contact us to discuss your situation.  

https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf 

Ability to change GST Reporting Period No changes proposed 

If you are on a quarterly reporting cycle, you may elect to change your GST reporting and payment to monthly, this will give you quicker access to any GST refunds you are entitled to. Please note that changing your GST reporting cycle to monthly doesn’t mean you have to change your PAYG Withholding reporting cycle.  

Please contact us to discuss your needs as it does mean that you need to continue to report on a monthly basis for a minimum of 12 months.  

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/?page=1#Monthly_GST_credits  

Tax Payment Deferrals, Remittance of Penalties & Interest and Lower Interest RateNo changes proposed 

The ATO are generously offering to consider individual cases regarding possible tax payment deferrals, possible remittance of interest and penalties or possible lower interest rates if on payment plans.  

As these are all independent & are considered case by case, please contact us to discuss this matter further.  

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/?page=1#Payment_deferrals  

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/?page=1#Remitting_interest_and_penalties  

 

QUEENSLAND GOVERNMENT - INTEREST FREE BUSINESS LOAN 

Last week the Palaszczuk Government announced they will create a new $500 million loan facility, interest free for the first 12 months, to support businesses to keep Queenslanders in work and extend the coronavirus payroll tax deferral to all businesses across the state. This $500 million concessional loan facility would comprise loans of up to 250,000 with an initial 12-month interest free period for businesses to retain staff.  

At this stage the Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible.  

Please email contact_us@qrida.qld.gov.au – Subject: Queensland COVID-19 Job Support Loans 

http://statements.qld.gov.au/Statement/2020/3/17/palaszczuk-government-offers-500m-in-loans-to-support-workers-in-businesses-affected-by-coronavirus http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme  

 

Please remember that we are here to support you and guide you as much as possible through this uncertain future we are all facing. 

Kind Regards 
 
The Team at Aegis Business Services  


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