March 17th, 2020 by

Coronavirus (COVID-19)Business Update

It’s been an interesting couple of weeks across the world, with the outbreak of Coronavirus (COVID-19).

As it currently stands, the World Health Organization (WHO) has announced that COVID-19 is a pandemic. Along with this, three states have announced a state of emergency. We are set to hit 400 cases today if we have not already.

In addition, the Australian Government has last week unveiled their economic response to the Coronavirus.

Here is what we know so far.

Federal Support Measures

On 12 March 2020, the Australian Government announced their economic response to the Coronavirus. There are four key areas, with two directly impacting on business:

Providing cash flow assistance to help small and medium sized business to stay in business and keep their employees in jobs

· Supporting business investment

Boosting Cash Flow for Employers

This measure will provide up to $25,000 back to business, with a minimum payment of $2,000 to eligible business that employ staff. The payment will be tax free.

Business entities with an aggregated annual turnover <$50 million Must employ workers Will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 upon lodgement of activity statements Payment will be equal to 50% of the amount withheld from employees salary and wages, 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.

No direct action is required by our clients. This will be triggered automatically upon lodgement of activity statements. Where the application of the measure causes a credit, the ATO will trigger a refund within 14 days.

Supporting Apprentices and Trainees

The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 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.

· Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Eligible to 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 Mar 2020 Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider Employers can register for the subsidy from early April 2020, and final claims for payment must be lodged by 31 Dec 2020

Increasing the Instant Asset Write-Off **

The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include all businesses with an aggregated turnover of less than $500 million (previously $50 million).

Threshold applies on a per asset basis – businesses can immediately write-off multiple assets Applies from the announcement (12 March 2020) until 30 Jun 2020, for new or second hand assets first used or installed ready for use in this timeframe

Please contact your accountant or us to discuss the cashflow implications further.

Backing Business Investment **

$3.2 billion to back business investment by providing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50 per cent of the asset cost in the year of purchase

· Eligible to businesses with an aggregated turnover below $500 million

Eligible assets are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997, acquired after the announcement (12 March 2020) and first used or installed by 30 Jun 2020. Does not apply to second hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

We recommend that prior to purchasing assets that may be deductible under this measure, that you contact your Tax Agent and seek their specific advice, to ensure your business, and the asset being purchased is eligible for the measure.

** This information is of a general nature and should not be considered taxation advice

ATO Support Measures

Deferral of payment dates for activity statements, income tax assessments, FBT assessments and excise Option to change from 1/4 to 1/12 reporting to access GST refunds Option to vary PAYGI to nil for the March quarter BAS and claim a refund for any instalments made for Sep and Dec 2019 quarters Remission of interest and penalties incurred on or after 23 Jan 2020 Availability to enter into low interest payment plans.

Coronavirus and Australian Workplace Laws

Our team of Bookkeepers and Accountants have been leveraging cloud-based systems to service and support our clients for many years. This has meant that most of our work is conducted off-site, with no requirement for face to face contact with our clients.

Our strategy is to continue to support and assist our clients during these challenging times to minimize disruption to our client deliverables.

All our staff will be available for phone advice or via video conferencing and we do not expect that there will be any disruption otherwise to our services.

For information in regard to best practice, we are relying on the following sources of information:

The next few months are going to be challenging for businesses and individuals in Australia, and across the world. If you have any questions about the government assistance packages being provided to business, please give us a call.

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