Coronavirus Government Economic Response

By Karen Bollinger – YBM

Yates Baker McLean. Accountants and Business Advisors situated in the Central West of NSW. Offering comprehensive advice for all your financial needs including tax, auditing, business advisory, self managed super funds, specialised industry experience and financial planning.

Support for Business

Instant Asset Write-Off

The Instant Asset Write-off now applies to businesses with annual turnover of less than $500 million, up from $50 million.

Business now can immediately deduct new or second-hand asset purchases below $150,000, up from $30,000, from 12 March 2020 to 30 June 2020. The threshold applies per asset and can be used for multiple assets. The assets must be first used or installed ready for use in this timeframe.

The instant asset write-off threshold will revert to $1,000 on 1 July 2020. Applying to businesses of turnover less than $10 million.

Investment incentive

The incentive has been introduced for purchases of new depreciable assets which are first used or installed ready for use by 30 June 2021, from 12 March 2020.

The incentive provides a deduction of 50% of the cost of the asset on installation with existing depreciation rules applying to the remaining cost of the asset.

The incentive can be claimed by businesses with an annual turnover less than $500 million.

Tax Free payments for Employers

A payment will be received by employers on the lodgment of the BAS within 14 days where the BAS results in a refund, otherwise it is received as a credit to the activity statement. The payment will be a minimum of $2,000 up to $25,000.

Businesses with annual turnover less than $50 million that employ workers are eligible for the payments.

The payment is calculated at 50% of the PAYG Withheld, up to a maximum of $25,000. The minimum payment of $2,000 will be received by employers who are not required to withhold tax.

These payments apply to all BAS up until the June 2020 BAS.

Apprentices and Trainees

A wage subsidy is available for employers of apprentices and trainees, who employ less than 20 full time employees. The apprentice or trainee must have been in training as at 1 March 2020.

Employers will be eligible for 50% of the wages paid from 1 January 2020 to 30 September 2020 up to $21,000 per apprentice or trainee.

If an apprentice or trainee is unable to be retained then an employer of any size that re-engages the apprentice or trainee will be eligible.

An eligibility assessment will be undertaken by an Australian Apprenticeship Support Network provider. Registration can take place from early April 2020 and final claims must be lodged by 31 December 2020.

Support for business impacted by Coronavirus

The ATO ask that those businesses suffering financial difficulty as a result of the Coronavirus outbreak get in touch on its Emergency Support Infoline 1800 806 218.

The ATO may assist by:

• Deferring payment dates for BAS, Income Tax, FBT and excise payments
• Quarterly reporting to be changed to monthly reporting to access refunds
• Allowing a refund for PAYG Instalments for the September 19 and December 19 quarters and a variation to nil for the March 2020 quarter
• Remission of interest and penalties incurred since 23 January 2020
• Allowing low interest payment plans for existing and ongoing tax liabilities

Ongoing super guarantee obligations will still need to be met.

These measures will not apply automatically. You or your tax or BAS agent will have to contact the ATO.

Support for Low Income Earners

A one off payment of $750 will be provided to recipients of social security, veteran and other income support and eligible concession card holders as at 12 March 2020. This includes those that have lodged a claim by the 12 March 2020 and the claim is subsequently granted.

If a recipient receives more than one type of support payment they will still only be eligible for one payment of $750.

The payment will be exempt from taxation and can be expected to be received by mid-  April 2020.

Support for those diagnosed with Coronavirus

There are existing measures available to those who are in isolation due to Coronavirus and do not have the required leave to cover the isolation period required.

These are:

• Sickness Allowance, to become JobSeeker Payment on 20 March 2020, for those over 22 years and below Age Pension age.
• Youth Allowance for those under 22 years old.

The residency requirements and income and assets tests will still have to be satisfied to be eligible for these payments.

If you require assistance with any of these new measures please contact YBM.