The government has recently announced the coronavirus stimulus package, pledging $17.6 billion to bolster the economy as the illness continues to spread.
Whilst legislation is due to be drafted by the end of this
month, this is what we know so far:
$25,000 payout for small businesses
One of the most significant offerings for small business is a grant payout that will see businesses with turnover of less than $50 million receive payments of up to $25,000 tax-free, with a minimum payment of $2,000.
These payments will be bench marked to 50 per cent of the amount withheld on employees’ salary and wages, 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 measure is expected to cost $6.7 billion and will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
Employers who lodge the BAS on a quarterly basis will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
Monthly BAS lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.
Instant asset write-off extension
The instant asset write-off for small and medium businesses has been extended to purchases of up to $150,000 from 12 March 2020 to 30 June 2020.
Currently, the tax write-off is available for businesses with a turnover of up to $50 million, for purchases of up to $30,000.
Companies with turnover of up to $500 million will now be included.
In addition, the government is accelerating depreciation deductions, through a limited 15-month investment incentive.
Until June 30 2021, businesses with a turnover of less than $500 million will be able to deduct an additional 50% of an asset cost in the year the asset was purchased.
The government has pledged $1.3 billion to keep 117,000 apprentices and trainees employed at small businesses.
Initial reports suggest the government will offer businesses with less than 20 employees up to $21,000 per apprentice — $7,000 per quarter for the first three quarters of 2020; with the payouts being equal to 50% of the apprentices’ wages.
The government has confirmed it will provide one-off payments of $750 to people on Newstart and to pensioners, in order to boost the economy by getting people spending. The payment is tax-free, and will not count as income.
As with most government announcements; the detail is yet to be determined…. watch this space and we will communicate when we learn more.