12 Mar A big boost for small businesses and pensioners
A big boost for small businesses and pensioners
Today the Australian Government announced the $17.6 billion coronavirus stimulus package to keep Australian’s in jobs and help small to medium-sized businesses stay in business while the economy takes a dip since the outbreak of COVID-19.
Here’s what we know about the Stimulus Package:
- Cash flow assistance for businesses
$6.7 billion will be injected by the Australian Government to Boost Cash Flow for employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
Business claiming tax write-offs will benefit the next time their tax is calculated, while benefits from the depreciation deduction will extend to June 30, 2021.
- Support for 120,000 apprentices
$1.3 billion will also be available to support small businesses to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 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 that employs that apprentice.
A one-off $750 stimulus payment to pensioners, social security, veteran and other income support recipients and eligible concession cardholders will be provided. All payments will be tax-free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment. Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.
- Business Investments
To encourage investments, the instant asset write-off threshold will be raised to $150,000 and an extra depreciation discount
Currently, the tax write-off is available for businesses with a turnover of up to $50 million, for purchases of up to $30,000. With the stimulus package, it will be extended to include companies with turnover of up to $500 million, and purchases of up to $150,000. The extension will apply until June 30 2020.
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.
Both these measures start today and are expected to help 3.5 million businesses.
If you are unsure about what you or your business can claim, talk to one of our Advisers at Simmons Livingstone & Associates today