The Australian Government has introduced several temporary measures worth $17.6 billion to support the Australian economy to assist with stimulating the economy during the outbreak of the Coronavirus.
Increased Instant Asset Write-off Threshold to $150,000
Increasing the instant asset write-off threshold from $30,000 to $150,000 for eligible assets effective immediately and until 30 June 2020 for businesses with aggregated annual turnover of less than $500 million.
Accelerated Depreciation Deduction
Offering eligible businesses an incentive to invest by accelerating depreciation deductions for new assets acquired effective immediately and until 30 June 2021. This applies to assets that are not subject to the above instant asset write-off.
Cashflow Assistance to Businesses
To assist small and medium-sized businesses cover the cost of employee wages and salaries that employ staff between 1 January and 30 June 2020, there will be a refund of 50% the PAYG withheld between $2,000 (minimum) and $25,000 (maximum) over six months. The refund of the PAYGW received will also be tax free.
For quarterly lodgers, the payments will be 50% of the PAYG withholding amount on your March and June quarterly BASs. For monthly lodgers, it applies to the March-June BASs (with March’s withholding amount multiplied by 3, then 50%, to make up for January and February). This will be done until you reach the $25,000 limit and will be delivered as a credit in the activity statement system. If the credit amount puts you in the refund position, payment of refunds will commence after 28 April 2020.
Supporting apprentices and trainees
Wage assistance to help eligible small business (employers employing less than 20 employees) maintain their apprentices and trainees in the form of a 50% subsidy of the apprentices or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
Stimulus payments to households
A one-off tax-free payment of $750 will be made to pensioners, social security, veteran and other income support recipients commencing 31 March. This will also not count as income for certain means-tested benefits.
Support for Coronavirus-affected regions and communities
Sectors and regions disproportionately affected by the coronavirus, such as tourism, agriculture and education, will receive targeted support. This includes a waiver of certain fees, and assistance to identify alternative export markets or supply chains, and further promote domestic tourism. The government will also offer administrative relief for certain tax obligation, including deferral of tax payments by up to four months. However, this administrative relief will be provided on a case-by-case basis, and businesses will need to apply.
Please feel free to contact your trusted advisor at Vivid Partners about how the government’s Economic stimulus package will affect you.
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The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Vivid Partners. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your advisor at Vivid Partners.