Does your small business qualify for the stimulus package?
The global coronavirus pandemic has hit the health of people and economies around the world, and it has hit hard.
Federal Government Support:
The federal Government's first $17.6 billion stimulus package and the second $66 billion package will be targeted to support small business through this difficult and unprecendnted event.
This is what you will expect to get if you’re running a small business with an annual turnover of less than $50 million/year (based on last financial year:
1) Cash flow assistance for small business: small businesses will get 100% cash back on PAYG withholding (tax on wages) up to a maximum of $100,000. The credit/cash refund will be paid into your business GST account from 28 April 2020. The benefit will be worked out on the PAYG withholding paid from 1 January 2020 to 30 June 2020. The cash benefit will be tax free and will be be paid over the 2 quarters (March 2020 QTR and June 2020 QTR).
Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax for the January to June 2020 period. A further $10,000 will be available for eligible employers from July - October 2020 period. The tax office will work out the formula and credit the business BAS account.
How to get the cash benefit?
Money Intelligence Accounting will be able to help you get the cash credited into your BAS/GST account once we lodge your BAS and IAS
2) Apprentice subsidy of 50% of apprentices/trainees wages up to $21,000. The subsidy will apply for 9 months from 1 January 2020 to 30 September 2020.
How to get the subsidy?
Employers can register for the subsidy from April 2020
3) Sole traders will be able to apply for the job seeker subsidy
4) Instant asset write off increase from the current $30,000 to $150,000 for new or second hand assets first used or installed to be used from 12 March 2020 to 30 June 2020. Businesses with annual turnover under $500 million are eligible.
5) Early access to super: you will be able to access your super fund and withdraw a total $20000 over 2 years - $10000 for 2019/20 and $10000 for 2020/2021.
The Tax office will be supporting your business:
1) Deferral of up to 4 months of debt owing on your BAS
2) Reducing your PAYG income tax instalment in your March BAS to NIL and can claim a tax credit against the Sep and Dec 2019 PAYG income tax paid earlier.
3) Remit penalties and interest incurred after 23 January 2020
Money Intelligence Accounting is ready to help your business to deal with this crisis and help your business ride through this storm. We will get through this together.
Special Support of $1b Fund Will Apply to the Following Businesses:
If your business is in the travel, tourism, agriculture and education industries.
This fund will be used to waive fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and for waiving entry fees for Commonwealth national parks.
It will also include additional assistance to help businesses find alternative export markets or supply chains.
These significantly affected small businesses may have access to grants similar to those provided to businesses in bushfire-affected areas.
For more information see:
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf
NSW government support initiative
The NSW government has also stepped in to support small to medium size businesses with the following benefits:
Small business will not be required to pay payroll tax (for businesses with payroll of up to $10 million) for three months from April - June 2020.
The payroll threshold limit will be raised from $850,000 to to $1 million from 1 July 2020.
Banks and business funding
1) The government will provide unsecured loans up to 3 yaers up to $250,000 with repayments deferred for 6 months.
2) Many banks, e.g. CBA and Macquarie have now allowed small business to defer paying loans up to next 6 months
3) Request deferring payments on your home loan up to 6 months. Contact your relationship manager or your bank immediately