Increase of the Instant Asset Write Off Threshold from $30,000 to $150,000

Businesses with a turnover of less than $500 Million (up from $50 Million) will be eligible for this.

• Eligible assets purchased from 12 March 2020 to 30 June 2020 that are under $150,000 will be eligible for the instant asset write off (examples include a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business).
• Eligible assets that are over the $150,000 will be eligible to claim 50% of the cost as an instant asset write off cost in the year of purchase until 30th June 2021 with the balance to be depreciated at the depreciation rates applicable in future income years.

Boosting cash flow for Employers

Businesses with a turnover of less than $50 Million will be eligible for this.

PAYG Withholding Incentives

• An incentive of up to $100,000 (up from $25,000 previously announced) with a minimum of $20,000 (up from $2,000 previously announced) for anyone who employs staff between 1 January 2020 and 30 June 2020.
• Businesses will receive a 100% (up from 50%) rebate of their PAYG Withholding reported on their BAS or IAS for this period.
• The payments to eligible employees are stated to be made within 14 days of lodgement of the March quarter BAS or IAS (i.e. for the period ending 31 March 2020). It is not clear how this will apply to those who lodge a monthly BAS for January and February 2020. Presumably, the PAYG withheld for these months would also be considered with no further payments to be made once the $100,000 cap is reached.
• These incentives have also been extended to include not-for-profit charities.

Eligible Apprentices

• Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
• Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice of trainee.
• 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.

Targeted support for the most severely affected sectors, regions and communities

• $1 Billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
• This will include the waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.
• Additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism. Further plans and measures to support recovery will be designed and delivered in partnership with the affected industries and communities
• On a case-by-case basis, the ATO will look to provide administrative relief for some tax obligations for people affected by the coronavirus outbreak.

Other announcements that were made last week

• The big four banks announce assistance package for those affected by COVID -19, including deferring loan repayments on small business loans for six months. Banks have also passed on varying cuts to interest rates on these loans so check with your bank as to what your revised rate will be.
• Government to supply a 50% guarantee on small business loans up to $250,000 to keep small businesses alive.
• An interest rate cut by the Reserve Bank of Australia (RBA) to bring the cash rate down to 0.25%, the lowest in Australian history.
• Additional relief being provided temporarily for those businesses facing insolvency and bankruptcy including changes to when creditors can issue a statutory demand. Directors will be temporarily relieved of their duty to prevent insolvent trading for any debts incurred in the ordinary course of the company’s business. This change will also apply for six months.
• Reducing the minimum pension drawdown rates by 50% for this financial year as well as the next financial year.
• Allowing early access to superannuation for those financially affected by the virus up to $10,000 for both this year and the next financial year, which will be tax-free.
• In Victoria, Payroll tax waived in 2019-20 for eligible businesses with taxable wages up to $3 million.
• Additional $750 stimulus payment provided after 13 July 2020 for certain income support recipients.

Parliament meet this week and the above items announced by the Morrison Government are to be tabled so they can be legislated. These are challenging times for our clients and yes, I will use the term ‘unprecedented’. We hope you and your families stay safe during these difficult times.

For any questions in relation to the above, feel free to contact our office.

We have also included some helpful links should you seek further information:

Click here for further information from treasury.gov.au

https://treasury.gov.au/coronavirus

https://www.safeworkaustralia.gov.au/covid-19-information-workplaces

https://www.sro.vic.gov.au/frequently-asked-questions-response-covid-19

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