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Government Economic Response to Coronavirus - Increased Tax Benefits to Business

Government Economic Response to Coronavirus - Increased Tax Benefits to Business


Australian Government Stimulus Package Corona Virus



Yesterday, the Australian Government released its proposed stimulus package to protect the economy. This package has been introduced to provide assurance to small and medium businesses to combat the cash flow and staff retention challenges employers are facing, as a result of the Coronavirus epidemic.

It is expected that an appropriate package of Bills will be introduced into parliament in the final sitting week in March 2020, for urgent consideration and passage.

The government will introduce measures to lessen the monetary impact of the virus.

 
Boosting Cash Flow for Employers & Businesses

 Summary

The Boosting Cash Flow for Employers measure will 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. The payment will be tax free.


Eligibility

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.

Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent 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

The Boosting Cash Flow for Employers measure 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.

Type of Lodger
Eligible Period
Lodgement Due Date
Quarterly
Quarter 3 (Jan, Feb & Mar 2020)
Quarter 4 (Apr, May & Jun 2020)
28 Apr 2020
28 Jul 2020
Monthly
Mar 2020
Apr 2020
May 2020
Jun 2020
 
21 Apr 2020
21 May 2020
22 Jun 2020
21 Jul 2020


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 March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150 per cent) in the March 2020 activity statement.

Supporting Apprentices and Trainees

Summary

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).

Eligibility

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.

Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

Timing

Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.

Further information is available at:

The Department of Education, Skills and Employment website at: www.dese.gov.au
Australian Apprenticeships website at: www.australianapprenticeships.gov.au  

               

Instant Asset Write Off Threshold

Summary

In addition to the above from 12 March 2020 the instant asset write off threshold has been increased from $30,000 to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.

 

For further information in regarding the above please visit https://treasury.gov.au/coronavirus or contact our office.



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