On 12 March 2020, the Australian Government announced its economic response to the coronavirus (COVID-19). The ATO also released a series of administrative concessions for taxpayers.
The Federal Government has announced a further $66 billion package not listed here.
Tax incentives for business investment
| Instant asset write- off | Depreciation | Rebate | Subsidies |
| Increased threshold from $30,000 to $150,000 | Accelerated depreciation to 30 June 2021 | Employers get a cash boost up to $25,000 | Wage subsidies for apprentices and trainees |
| Includes businesses with aggregated annual turnover <$500 million (up from $50 million) until 30 June 2020.
For example, assets that may be able to be immediately written-off are a concrete tank for a builder, a tractor for a farming business, and a truck for a delivery business. |
Provides a 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 turnover <$500 million can deduct an additional 50% of the asset cost in the year of purchase. |
Eligible small and medium- sized businesses receive between $2,000-$25,000 when employing staff, between 1 January – 30 June 2020. Businesses turnover with For example, if you spend |
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January – 30 September 2020. Where a small business cannot retain an apprentice, the subsidy is available to a new employer that employs that apprentice. |
Source: Worrells Solvency & Forensic Accountants www.worrells.net.au Tel: +61 2 8844 1200
Suite 601B, Level 6, 91 Phillip Street, Parramatta NSW 2150
Cash flow assistance for businesses
Boosting cash flow for employers
Up to a $25,000 tax-free payment to small and medium-sized businesses with aggregated annual turnover of less than $50 million that employ workers, between 1 January 2020 and 30 June 2020. These eligible businesses will receive a payment equal to 50% of their PAYG withheld, delivered as a credit in their BAS from March to June 2020, with a minimum $2,000 payment and up to a cap of $25,000.
Supporting apprentices and trainees
Eligible small business employers will be able to apply for a wage subsidy of 50% of the apprentice’s or trainee’s (in training as at 1 March 2020) wage for up to 9 months from 1 January to 30 September 2020, up to $21,000 per apprentice. Employers can register for the subsidy from early April 2020 with final claims for payment due by 31 December 2020.
Non-tax measures
Stimulus payments
A one-off $750 payment will be available from 31 March 2020 to social security, veteran and other income support recipients and eligible concession cardholders including pensioners. There will be one payment per eligible recipient.
Assistance for severely affected regions
The Government has set aside $1 billion to support those regions and communities that have been disproportionately affected by the economic impacts of COVID-19, including those heavily reliant on industries such as tourism, agriculture and education.
ATO relief
On 12 March 2020, the Australian Taxation Office (ATO) announced a series of administrative concessions to assist businesses impacted by COVID-19, which include:
- deferring by up to 4 months the payment of tax amounts due through the BAS (including PAYG instalments), income tax assessments, FBT assessments and excise by affected businesses;
- allowing affected businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to any GST refunds;
- allowing affected businesses to vary PAYG instalment amounts to zero 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 by affected businesses on or after 23 January 2020, that have been applied to tax liabilities; and
- allowing affected businesses to enter into low-interest payment plans for their existing and ongoing tax liabilities.
The ATO assistance is not automatic, taxpayers must first contact the ATO to request assistance, and if eligible, the ATO will ‘tailor the assistance package for the relevant taxpayer.
Source: BDO Australia www.bdo.com.au Tel: +61 2 9251 4100
Level 11, 1 Margaret St, Sydney NSW 2000 AUSTRALIA