Covino & Co Updates

The Coronavirus or COVID-19 has gone beyond affecting the health of humans and is now affecting the health of the Australian economy.

The Australian Government has put forth measures to help ease the effects the pandemic is having on business and households.

On 12 March 2020, the Australian Government announced a $17.6 billion economic stimulus package to support individuals, businesses and households affected by the rapidly spreading COVID-19, which was today declared a pandemic by the World Health Organization.

We would like to clarify the assistance the Australian Tax Office will be supplying:

The ATO will assist small businesses via the following options regarding BASs and debts owed to the ATO: 

• Deferring payments of amounts due via Business Activity Statements by up to four months. This includes PAYG instalments, income tax assessments, fringe benefits tax assessments and excise.
• Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
• Eligible businesses that withhold tax on employee salary and wages will  receive a payment equal to 50% of the amount of PAYG Withheld.
• The credit is capped at a total of $25,000 (tax free) but there will be a minimum payment of $2,000.
• Allowing businesses to vary pay-as-you-go (PAYG) instalment amounts to nil for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
• Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.

Please note that the possible $25,000 payment is based on PAYG WH tax paid on wages. These amounts are reported on the business activity statements.

We stress that this does not mean businesses are guaranteed to get $25,000 directly form the ATO.

The cap of $25,000 is spread over all activity statements, not $25,000 per activity statement.

There will be assistance regarding small businesses that employ apprentices and trainees: 

• Wage subsidy of 50% of the apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020, for those employees in training as at 1 March 2020.
• Subsidy is capped at $7,000 per quarter per apprentice or trainee
• Only available to small employers who employ fewer than 20 full-time employees.
• Where a business has to let an apprentice go, a new employer can get the subsidy.

Legislation has also changed regarding the instant asset write off and supporting business investment: 

• Increasing the instant asset write-off threshold from $30,000 to $150,000.
• Expanding the write-off to businesses with an annual turnover of less than $500 million (currently the threshold is only $50 million) up to 30 June 2020.
• Businesses with turnover less than $500 million will be able to access a 15 month investment incentive by accelerating depreciation deductions.

The ATO will be supplying household stimulus package: 

• $4.8 billion to provide a one-off $750 tax-free stimulus payment to welfare recipients, including pensioners, carers, veterans, families, young people and jobseekers.
• Effective from 31st March 2020.
• People who are unable to attend work because they have been diagnosed with the Coronavirus or who are in isolation, may qualify for income support if they do not have any employer leave entitlements.

Targeted support for most severely affected areas:

• $1 billion to support regions or sectors (e.g. tourism, agriculture and education) most severely affected by the COVID-19 pandemic.

Please feel free to contact any of our staff members for further information or if we can help in anyway.

Please refer to the link below for the media release from the Treasury Department:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf

The link below provides information released by Fair Work for workplace entitelements and obligations:
https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws