Tax Relief

Small Business Gets Big Boost….Important Tax Measures to support your Business through COVID-19

This week the Australian Government released its economic response to the coronavirus (COVID-19). Part of this includes some very good concessions for businesses through the ATO.

1. Tax Incentives for  Business Investment – Instant Asset Writeoff increased.

For businesses purchasing new or second hand assets first used or installed ready for use from 12 March until 30 June 2020, the instant asset write-off threshold will be increased from $30,000 to $150,000 for businesses with aggregated annual turnover of less than $500 million (up from the current $50 million) The threshold applies on a per asset basis, so eligible businesses can immediately write off multiple assets.

In essence, this is great news as this offer brings forward the depreciation deductions a business would receive over a number of years to the year of purchase. 

Beyond 30 June 2020, a deduction of 50 per cent of the cost of an asset installed prior to 30 June 2021, with existing depreciation rules applying to the balance of the assets cost.

2. Cashflow Assistance for business – Boosting cash flow for employers

The ATO will deliver a tax free  rebate of up to $25000 to small and medium sized business with aggregated turnover of less than $50 million that employ workers between 1 January 2020 and 30 June 2020. These eligible businesses will receive the rebate equal to 50% of their PAYG withheld, delivered as a credit in the BAS from March to June 2020 (for quarterly lodgers) with a minimum $2000 payment and up to the cap of $25000.  Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.

3. 50% Subsidy for Trainee/Apprenticeship Wages

Employers with 20 or fewer employees can apply for a wage subsidy of 50 per cent of apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.

The trainee must have been in training with an organisation as at 1 March 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

To apply, contact an Australian Apprenticeship Support Network (AASN) provider.

We urge our clients lodging March quarter BAS statements (due 28 April) and June Quarter (due 28 July) to take action as soon as practicable as certain incentives in the economic package will only be available for  a short period of time. We also encourage you to have your work to our office early to ensure lodgements are processed on time.

As always – please contact our office if you would like to discuss a specific element from the stimulus package applicable to your business on 07 5536 2288.

 The ATO have released a fact sheet outlining further information and examples