The Economic Stimulus Package released by the Government is focused on supporting sustainability for employment and economy stimulation through asset purchase. In Summary:
Immediate asset write off has increased from $30,000 to $150,000.
50% tax free refund on your PAYG from the ATO up to a maximum of $25,000, for the period starting from January to June or March to June 2020, with refunds starting after April 28 BAS is lodged.
Eligible businesses can apply for a wage subsidiary of 50% of apprentices and/or trainees wage covered from 1 January 2020 to 30 September 2020 up to a maximum of $21,000
NCS Group Director Andrew Nicholls has explained this in greater detail below for businesses to see how and when this applies and what the parameters are. Andrew and his firm can be contacted for support or advice regarding this: www.ncs-group.com.au
Enhancing the instant asset write-off
The instant asset write-off threshold increases from $30,000 to $150,000 and now available to businesses with aggregated annual turnover of less than $500 million (up from $50 million).
This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this timeframe.
Backing business incentive
Introduction of a time limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.
A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost.
Eligibility: businesses with aggregated turnover below $500 million.
Eligible assets – new assets acquired after announcement and first used or installed by 30 June 2021 that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is, plant, equipment and specified intangible assets, such as patents).
Boosting Cash Flow for Employers
Provide up to $25,000 back to business, with a minimum payment of $2,000 for eligible businesses. The payment will provide temporary cash flow support to small and medium businesses that employ staff during the economic downturn associated with coronavirus. The payment will be tax free.
Eligibility: Small and medium business entities with aggregated annual turnover under $50 million and that employ workers. Eligibility will generally be based on prior year turnover.
The payment will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 when eligible businesses lodge (see below) upcoming activity statements.
Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.
Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.
Timing: will be applied for a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the business upon lodgment of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.
Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
Monthly lodgers will be eligible to receive the payment for the lodgment months of March 2020, April 2020, May 2020 and June 2020. To provide a similar treatment to quarterly lodgers, the payment will be calculated at three times the rate (150%) in the March 2020 activity statement.
The minimum payment will be applied to the business’ first lodgment.
Supporting employers in employing apprentices and trainee
Eligible employers 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 $21k per eligible apprentice or trainee ($7k per quarter).
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.
Access to the subsidy will be available after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.
Household stimulus package
Effective from 31 March 2020, a one-off $750 tax-free stimulus payment to certain taxpayers (e.g. pensioners, social security and other income support recipients and eligible concession card holders)
Australian Taxation Office Response
The ATO has announced a number of initiatives in terms of easing the income tax and GST burden for businesses impacted by this virus. Businesses can phone the ATO Emergency Support Infoline on 1800 806 218 for help tailored to their circumstances. Otherwise, we would be pleased to discuss options available to you and negotiate an appropriate solution with them on your behalf.
Staff, Self, Customer & Office Welfare
Above all, it is critical that our business clients plan immediately for impacts on your business should the virus spread to you, your staff and your customers. We would be pleased to discuss actions taken by NCS Group to mitigate our risks for those who are interested.