COVID-19 Assistance to Small Businesses
By Paolo Coniglio, 23.03.2020
Increase of Instant Asset Write Off
The ATO has also increased the instant asset write-off threshold from $30,000 to $150,000 and expanded its eligibility to businesses with an aggregated turnover from less than $50 million to less than $500 million.
The write off increase applies from 12 March 2020 to 30 Jun 2020, to both new and second-hand assets, first used or installed ready for use in this time period.
The threshold is applicable per asset. Businesses can immediately write-off multiple assets.
Support for Business Investment
The Government is introducing a time-limited 15-month investment incentive to support business investment and economic growth, by accelerating depreciation deductions. This incentive includes:
- A deduction of 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
- Eligibility extension to businesses with an aggregated turnover up to $500 million.
Please note, there are limitations to the types of assets a business incentive applies to. We recommend prior to purchasing assets to consult with your Tax Agent.
Employers will still need to meet their ongoing super guarantee obligations for their employees, No, deferrals or extensions have been granted for these payments.
Assistance for Severely Affected Regions
The Government has set out aside $1 Billion to support regions disproportionately affected by the impact of the Coronavirus, including industries such as Tourism, Agriculture and Education.
The ATO will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case by case basis.
Assistance provided by Financial Institutions
Additional assistance has also been offered by a number of Banks and Financial Institutions. Please contact your Bank or Bank Manager for more information.
Additional Support Options
Additional options available to assist businesses impacted by COVID-19 include the ability to apply for the following:
- ATO payment deferrals by up to four months from the payment date. This is applicable to debts payable for business activity statements, PAYG instalments, income tax assessments, fringe benefits tax assessments.
- Temporary change to the GST and PAYG reporting period from quarterly to monthly to ensure better cash flow management or provide quicker access to GST refunds they may be entitled to.
- Variation of the quarterly PAYG Instalment payable to $0 for the Jan – Mar 2020 quarter. Businesses that vary their PAYG instalment to $0 can also claim a refund for any instalments paid in the Jul – Sep and Oct-Dec 2019 quarters.
- Remission of any interest and penalties, incurred on or after 23 January 2020, applied to tax liabilities
- Low-interest payment plans to pay outstanding tax.
This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.