CORONAVIRUS: FEDERAL GOVERNMENT STIMULUS PACKAGE

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As the economic knock-on effects of the Coronavirus pandemic continue, the Australian Government has implemented an $18 million stimulus package to boost the economy and save jobs. For your information, details of the package are outlined below.

Huge increase to the instant asset write-off

Until 30 June 2020, the instant asset write-off threshold for businesses with a total aggregated turnover of less than $500 million will increase from $30,000 per asset to $150,000. Note: aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or connected with you.
If your business is eligible, you can write-off multiple assets immediately.
The increase applies to new or second-hand assets if they are first used or installed ready for use by 30 June 2020.

Tax deductions to boost investment

For businesses with an aggregated turnover of less than $500 million, 50 per cent of the cost of an eligible asset is now tax-deductible. Existing depreciation rules will apply to the remaining 50 per cent.
Eligible assets include new plant, equipment and specified intangible assets acquired after 12 March 2020 and first used or installed by 30 June 2021.
The stimulus announcement made no mention of removing the depreciation limit for cars.

Help with employer cashflow

For SMEs with an aggregated turnover of less than $50 million, the package provides a minimum tax-free payment back to the business. The amount of the payment will range between $2,000 and $25,000.
The ATO will deposit a credit from 28 April 2020 when the business lodges its activity statement.
If your business is eligible and withholds tax on employees’ wages, you will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.
Eligible businesses that are not required to withhold tax on wages will receive a minimum payment of $2,000.

The ATO will make the payment when you lodge your activity statements.

Support for apprentices and trainees

Businesses that employ fewer than 20 full-time employees and retain an apprentice or trainee as at 1 March 2020 can apply for a 50 per cent wage subsidy of the apprentice’s or trainee’s wage from 1 January 2020 to 30 September 2020.
Employers will be reimbursed up to $21,000 per apprentice or trainee.
To access the subsidy, the business must be assessed for eligibility by an Australian Apprenticeship Support Network provider.

Relieving pressure on low-income households

The Government will provide eligible Australians with a one-off, automatic payment of $750 from 31 March 2020.

To be eligible, you must live in Australia and be receiving a Government payment, e.g. the Age Pension, Carer Payment, Newstart Allowance, etc., or be the holder of a concession card on 12 March 2020.
The payment will be tax-exempt.

There’s obviously more to the stimulus package and some of the eligibility requirements may be tricky to navigate. If you have any questions, our team is just a phone call on (02) 9326 2788 or email away.

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