As fears of COVID-19 continue to escalate, we want to provide our clients with an update of the Federal and State Government stimulus packages and the plans we have in place in regards to our operations.
- Federal Government Stimulus Package
- State Government Stimulus Package
- Muntz Partners Operations
Federal Government Stimulus Package
The Key Tax Measures include:
- From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
- A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
- Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.
- Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners. These payments will commence to be automatically made from 31 March 2020.
- Administrative relief from the ATO for some tax obligations for people affected by the Coronavirus outbreak, on a case-by-case basis (see further measures below).
In addition to these key tax measures, the Government has also announced additional economic stimulus measures including:
- Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
Importantly, where an employer is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. It is proposed that employers will be able to register for the subsidy from early-April 2020.
- Assistance to severely affected regions – The Government has also committed to set aside
$1 billion to support 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.
Further measures announced have been:
- Deferring payment by up to four months of the amount due on your Business Activity Statements, income tax assessments, FBT assessment and excise.
- Allow businesses lodging BASs quarterly to lodge monthly to get quicker access to GST refunds.
- Vary PAYG income tax installment for the March quarter to nil. Businesses that do so can also obtain a refund of installments paid for the September and December 2019 quarters.
- Remitting interest and penalties incurred from 23 January 2020 on tax liabilities.
- Allowing affected businesses to enter into low-interest payment plans for existing and ongoing tax liabilities.
The above measures are not automatic, and affected businesses, or their tax agent, must contact the ATO and request the benefit of one more measures.
Businesses still need to meet their super guarantee obligations for their employees.
State Government Stimulus Package
- A freeze on cost increases across motor vehicle fees, water and electricity bills, emergency service levies and public transport fares until July 2021.
- The Energy Assistance Payment – a rebate given to concessional card holders will be doubled to $600 to help seniors in particular.
- $114 million in additional measures to support small businesses
- Small businesses that pay payroll tax (with a payroll between $1 million and $4 million) will receive a one-off grant of $17,500
- $1 million payroll tax threshold brought forward by six months to July 1, 2020
- Businesses impacted by COVID-19 can defer payroll tax payments until July 21, 2020
In addition, small and medium sized businesses affected by COVID-19 can now apply to defer payment of their 2019-20 payroll tax until July 21, 2020. The deferral is available to employers who pay $7.5 million or less in Australian Taxable Wages and have been directly or indirectly impacted by COVID-19, compared to normal operating conditions.
Muntz Partners Operations
Presently with us it is business as usual. Our accounting staff have the ability to work from remote sites and as such we do not see any delays in processing your work. We are also presently working with our IT providers to enable us to use facilities such as Zoom, so that we can meet via video conference if necessary.
We will also comply with all health requirements as advised by both Federal and State Governments.
We have provided a broad outline of the packages however please feel free to contact us on how these specific changes can help you through this difficult period.