Proposed economic responses: how does it affect you?

1. Instant Asset Write Off threshold (from 12/03/2020 to 30/06/2020)

The threshold will increase from $30,000 to $150,000

This will apply to businesses with aggregated annual turnover of less than $500 million, up from $50 million.

You may be able to claim the cost of an asset up to $150000 (excluding GST) as an immediate deduction in your business.

The cost of the asset purchased needs to be under $150000 (excluding GST) and must be installed and ready for use by the end of June 2020.

2. Investment allowance of 50% for new assets (through to 30 June 2021)

This will apply to businesses with an aggregated turnover of less than $500 million.

Businesses will be able to deduct 50% of the cost of an eligible asset if installed or ready to use by 30 June 2021.

When you do your tax returns, provide a copy of the tax invoice and finance agreement (if applicable) to your accountant.

For quarterly payers, the amount is equal to 100% of the withholding paid in the March 2020 and June 2020 quarters

For employers who have employees that has no tax withheld, you will be eligible for the $10000 minimum

For monthly payers, the amount is calculated on the withholding paid in March 2020 (300% for this monthly only)

The second payment is equal to the first

For quarterly payers, the second payment will be made after businesses lodge their BAS for the June 2020 and September 2020 quarter

For monthly payers, the second payment will be made after businesses lodge their BAS for the June 2020, July August 2020 and September 2020 and September 2020 months

The above amounts will be deducted from the activity statements for the periods above.

Also extends to not-for-profit organisations

Make sure your BAS is lodged on time.

Eligible employers are those with less than 20 full-time employees

Period covered is 01/01/2020 to 30/09/2020

Eligible employers may be entitled to 50% subsidy of wages, capped at $21000 per apprentice

Subsidy itself is capped at $7000 per quarter

Businesses need to complete an application for the subsidy, which is proposed to commence in April 2020.

5. Business impacted by the Coronavirus are encouraged to get in contact with the ATO to discuss relief (ATO emergency Support Infoline: 1800 806 218)

Relief may be granted on a case-by-case basis

Automatic relief will not be granted to a specific geographic area.

Employee superannuation obligations must still be satisfied

You still must lodge on time

First payment of $750 to commence automatically from 31/03/2020.

Second payment of $750 to be paid on 13/07/2020 (This won’t be available if you get the $550-a-fortnight coronavirus supplement, more information below)

7. There is some relief for sole traders who have no employees

Sole traders can now access Jobseeker (previously called Newstart) payments

Sole traders may also be eligible for the Coronavirus supplement which is $550 a fortnight

The above income payments will commence from 27/04/2020.

Apply online or over the phone through Centrelink

Make a declaration that your business has been suspended or had turnover reduced significantly

You have to keep trying to develop and sustain your business

Eligible individuals can access up to $10,000 of their superannuation before 1 July 2020

You will also be able to access up to a further $10,000 from 1 July 2020 for another three months.

You will not need to pay tax on amounts released and the money withdrawn will not affect Centrelink or Veterans’ Affairs payments

For sole traders, some of the eligibility criteria include that your business was suspended or there was a reduction in your turnover of 20% or more

Apply online through myGov

Wait for the ATO to issue a determination, which they will also provide your superannuation fund.

Your superannuation fund will then make payment to you

9. Temporary reduction in superannuation minimum drawdown rates

Minimum drawdown rates for account based pensions and similar products have been halved for financial years 2019/2020 and 2020/2021.

Ensure you withdraw the revised minimum required amount to keep you fund in pension phase

10. Coronavirus SME Guarantee Scheme

Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.

The maximum loan value will be $250,000 for a term up to three years but it will not apply to re-financing of existing customers.

Check with your bank or mortgage broker regarding eligible lenders

1. The Queensland Government will offer business interest-free loans to help keep small businesses afloat amid the crisis

The proposed facility will comprise loans of up to $250,000 with an initial 12-month interest free period to help businesses retain staff.

2. The six-month payroll tax deferral will extend to all businesses across the state

Before taking any action, please bear in mind that at the time of writing this document, the above proposals are not legislated yet. We recommend waiting for further updates, which we will do so as soon as we know more.

[1] https://treasury.gov.au/sites/default/files/2020-03/Overview-Economic_Response_to_the_Coronavirus.pdf