Australian Banking Association announced a relief package targeting both business and individual customers.
- Small businesses impacted by the coronavirus crisis will be able to defer their loan repayments for six months.
- Soon after the announcement, the National Australia Bank announced that its home loan customers could also pause their repayments for up to six months.
There is a likelihood that other banks may also release similar relief measures. We recommend you contact your bank as soon as possible to discuss your debt arrangements to see if a reduction or deferral can be arranged.
ATO Debt Management
The ATO has also released guidance on how it will be assisting small to medium size businesses, mainly with the deferral of payments and low interest payment plans. We have detailed these below:
- Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.
- Allow businesses on a quarterly reporting cycle 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 (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 on or after 23 January 2020, that have been applied to tax liabilities.
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
Instant assets write off now for assets costing less than $150,000
- The government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million.
- This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this timeframe.
- Small and medium business entities with aggregated annual turnover under $50 million and employ workers will be eligible. Eligibility will generally be based on prior year turnover.
- The payment will be delivered by the ATO as a credit in the activity statement system from 28 April 2020.
- Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.
- Eligible businesses that pay salary and wages will receive a minimum payment of $2,000 even if they are not required to withhold tax.
- The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.
- Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
- Monthly lodgers will be eligible to receive the payment for the lodgement months of March 2020, April 2020, May 2020 and June 2020. To provide a similar treatment to quarterly lodgers, the payment will be calculated at three times the rate (150%) in the March 2020 activity statement.
New Apprentices Subsidy
- The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 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).
- The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
- Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.
- Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020
Further information is available at:
- The Department of Education, Skills and Employment website at: www.dese.gov.au
- Australian Apprenticeships website at: www.australianapprenticeships.gov.au
The Team at Rawson Verco Need are ready to assist you to understand which of the measures are relevant to your circumstances and how they can be applied to help you navigate through these challenging times.