This article aims to explain the Australian government stimulus package for small businesses in an easy to understand one-page summary.
In response to the economic fallout from the global coronavirus pandemic the Australian Government is supporting eligible businesses to manage cash flow challenges and retain workforce. Assistance will be provided in form of cash flow support though the normal ATO channels and some other temporary measures to provide some relief in the current financial situation. Below is a list of measures taken by the commonwealth government:
Boosting cash flow for employers– Maximum of $100,000 and minimum of $20,000 available to small businesses (turnover under $50m) and Not for-Profits for employers in business before 12/03/2020. First payout will be within 14 days of lodging the March BAS or BAS due date (whichever is later) and additional payment equal to the total of first payment between July-October. Employers who lodge BAS on monthly basis will receive 300% of the withheld PAYG and employers who lodge quarterly BAS will get 100% of the withheld PAYG. Maximum payout will be $50,000 and minimum payout will be $10,000 even if withheld PAYG is zero (employees’ wages below tax threshold). March BAS is due 28/04/2020 for employers who lodge quarterly and 21/04/2020 for employers who lodge monthly.
Temporary relief for financially distressed businesses– Increase in minimum threshold under the Corporations Act 2001 for a creditor to issue a statutory demand from current $2,000 to $20,000 for a period of 6 months. For individuals/sole traders the limit under the Bankruptcy Act 1966 has also been increased from current $5,000 to $20,000. Also, the time to respond to bankruptcy notice increased to 6 months from the current 21 days.
Increasing the instant asset write-off from $30,000 to $150,000 and increasing the eligibility threshold for businesses from less than $50m to less than $500m annual aggregated turnover until June 2020.
Backing business investment- for a limited period of 15 months businesses with turnover less than $500m will be able to deduct 50% of the cost of an eligible asset on installation.
Supporting apprentices and trainees-Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Source: ATO and Australian government treasury department
EDITED on 31/03/2020
The Australian government announced a third stimulus on 30/03/2020 to guarantee $1500 as job keeper payment to employers per eligible employee per fortnight. Details available in the following link https://company4me.com.au/small-business-stimulus-package-explained.
If you need any assistance to lodge your BAS and claim the assistance simply complete the form at the end of the article and one of our team members will be in touch.
COMPANY4ME ASSISTANCE ANNOUNCEMENT FOR SMALL BUSINESSES
On our part to assist small businesses Company4Me will wave setup charges for XERO or MYOB/QuickBooks migration to XERO, include XERO subscription and Receipt bank subscription as part of all bookkeeping packages we offer. This adds up to a one off $500 benefit and $165 monthly benefit for a 6-month period. All new small business clients from 26/03/2020 onwards till 30/06/2020 will get this offer.
Being a small business ourselves we will do the best to accommodate existing and new clients to come out stronger on the other side. Stay safe and keep the Aussie never give up spirit going!