Shine A Light … on … Stimulus Package
There are few ways to escape the news of the Coronavirus as it continues to have a huge impact on people across the world. Closer to home, the Morrison Government has announced a multi-level stimulus package in response to the anticipated economic downturn.
This package includes a number of economic stimulus measures, most targeted at helping small to medium-sized businesses.
Here’s an updated summary of the Australian Government’s announcement with an overview of what’s in the package. Each of the green headings below is a link to the detailed release related to that topic … understandably, these are complex documents and can sometimes cause confusion. Focus on the examples provided … they will give more context to the information.
Please do not hesitate to get in touch if you have a question.
Here to help
First, please be assured that we are here to help you weather the global issues that the Coronavirus pandemic raises. We’re very aware that your family, staff and business needs are top priority. If you would like to conduct meetings over the phone or online communication platforms like Zoom, we will help in this manner.
The majority of the Stimulus Package measures rely on your business being compliant and up-to-date… eligibility and access to these boosts and credits is dependent on lodgement of March Business Activity Statements (BAS).
To that end, know that this work will be a priority here at Business In Lights. REMEMBER, no credits are available until after April 28, 2020.
What the stimulus package means for you…
According to the Australian Government’s announcement, the $84 billion dollar stimulus package is intended to support confidence, employment and business continuity. It is designed to support business investment, help small businesses manage short-term cash flow challenges, provide targeted support to individuals and assistance to the most severely affected communities and regions. Please be aware, it does not mean every business will get $100,000! Here’s a quick overview…
The Boosting Cash Flow for Employers measure will provide up to $100,000 back to small and medium-sized businesses, with a minimum payment of $20,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Small businesses employing less than 20 full time employees can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
The Government will provide two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. This payment will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the $550/fn Coronavirus supplement. The payment will be tax free.
Support for Coronavirus-affected regions and communities
The Government has set aside $1 billion to support those regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus.
ATO Flexible Approach
The ATO has signalled it will be flexible in the way it handles taxpayers’ affairs over the coming months. The measures will include:
- up to a six month deferral of the payment date of amounts due through the business activity statements (BAS), including PAYG instalments, income tax assessments, fringe benefits tax assessments and excise.
- Allowing quarterly GST reporting businesses to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary Pay As You Go (PAYGI) instalment amounts to zero for the April 2020 quarter. Businesses that vary their PAYG instalment to zero will also be allowed to claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Looking to remit any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and allowing affected business to pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
The message here is clear – pay your staff and suppliers first, the ATO can wait.
If you have any questions or concerns, please feel free to reach out to me directly.
Please stay safe and we wish you all good health in the months to come.