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Additional Government Stimulus

Wow! This week has been extraordinary since the initial announcement by the Government of the initial stimulus on March 12, added is the extra social distancing measures as well as the associated health actions and the suspension of the AFL competition, having a substantial impact on business in Australia.

 SMB Accounting will be working overtime to ensure that all our clients are supported. Whether it is discussing strategies to smooth cashflows, revising forecasts/budgets, looking at re-evaluating your costs structure.

For all we are concentrating a great deal of time working through the various state and federal stimulus/rescue packages to ensure a maximum support is provided. To this end we have over the weekend preparing a comprehensive Booklet which we have consolidated the known support from federal and state governments, banks, insurance companies and  energy companies which will be available for download from our website in the near future

Firstly here is a quick overview of the announcement yesterday (22nd March 2020)

 Support For Individuals including Sole Traders

The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Corona virus supplement to be paid at a rate of $550per fortnight.

This then being a total of $1,100 (including the Jobseeker payment)

This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.

For the period of the Corona virus supplement, there will be expanded access to the income support payments listed above there is expanded access to Jobseeker Payment and the criteria will provide payment access for permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests as a result of the economic downturn due to the Corona virus. This could also include a person required to care for someone who is affected by the Corona virus.

 Eligible small business to receive up to $100,000

The previously announced $25k has been upsized now to maximum of $50k and will provide 100% of the PAYGW from March to June 2020 period. The second $50k is exactly the same, just to be claimed from July to October 2020 period.

They have also said that these payments will only be available to active eligible employers established prior to 12 March 2020.

Your turnover must be less than $50m to be eligible and you simply need to have employees for whom you withhold tax on wage payments.

Apprentices and Trainees

50% of the apprentice or trainee’s wage paid will be subsidised by the government during the 9 months from 1 January 2020 to 30 September 2020, up to $21,000 per eligible apprentice or trainee. It will be capped at $7,000 per quarter.

The business must have had the apprentice or trainee in training with a small business as of 1 March 2020 and is available for business employing less than 20 full-time employees.

You will be required to have an eligibility assessment undertaken by an Australian Apprenticeship Support Network (AASN) provider.

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

Here are links for additional information:

SME Lending Guarantee

The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

The federal government will provide a guarantee of 50% to SME lenders for new unsecured 3 year loans of up to $250k per borrower to be used for working capital and these loans will not require any repayments for 6 months.

Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions

Other measures announced

 Temporary relief for financially distressed businesses

  • Increase in the threshold for creditors to issue statutory demands from $2k to $20k for the next 6 months.
  • Increase in the threshold for initiating bankruptcy proceedings from $5k to $20k for the next 6 months.
  • Plus an increase in timeframe whereby you are required to respond to a bankruptcy notice or a statutory demand from 21 days to 6 months.
  • Directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. Egregious cases of dishonesty and fraud will still be subject to criminal penalties.

 Temporary early access to superannuation

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020.

  • To apply you must satisfy on or more of the following:
    • You are unemployed; or
    • your working hours were reduced by 20 per cent or more; or
    • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
  • No tax will be payable on these amounts
  • You can apply directly to the ATO through the myGov website: my.gov.au

As said above there is much more available and in place and this cannot be an exhaustive list as well as the continued fluid nature of the circumstances unfolding, and we will continue to monitor announcements etc as they happen

 

### Please note we have made every attempt  to confirm this information is correct and complete as of the moment  of publication ####

 

Please send an email stephen@smbaccounting.com.au if you have any questions

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Government Package for Business

 

Below we have provided a briefing of the stimulus package which the government announced last week in response to the difficult times which are affecting all of us

As a business owner or employee of a business, you may/will confront the possibility of yourself or members of your team being isolated from the work environment, supply issues as well as a decrease in the demand for the services/goods over the coming 3-9 months.

Tax incentives for business investment

Increase in Instant asset write-off

From 12 March until 30 June 2020, for new or second-hand assets first used or installed ready for use, the instant asset write-off threshold will be increased from $30,000 to $150,000 for businesses with aggregated annual turnover of less than $500 million (up from the current $50 million threshold).The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets. The threshold will revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020, however businesses not entitled to the instant asset write off from 1 July 2020 may be entitled to the 50% investment incentive as below.

Backing business investment incentive

The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.
Businesses with aggregated annual turnover of less than $500 million per annum will be able to deduct 50 per cent of the cost of an eligible asset upon installation, provided it was acquired after 12 March 2020 and first used or installed by 30 June 2021.

There is no asset value threshold for this 50% investment incentive. Existing depreciation rules applying to the balance of the asset’s cost.

Cash flow assistance for businesses

Increasing cash flow for employers

Up to a $25,000 tax-free payment to small and medium-sized businesses with aggregated annual turnover of less than $50 million that employ workers, between 1 January 2020 and 30 June 2020.
These eligible businesses will receive a payment equal to 50% of their PAYG withheld, delivered as a credit in their BAS from March to June 2020, with a minimum $2,000 payment and up to a cap of $25,000.

Keeping apprentices and trainees employed

Eligible small business employers will be able to apply for a wage subsidy of 50% of the apprentice’s or trainee’s (in training as at 1 March 2020) wage for up to 9 months from 1 January to 30 September 2020, up to $21,000 per apprentice. Employers can register for the subsidy from early April 2020 with final claims for payment due by 31 December 2020.

Non-tax measures

Stimulus payments

Social security, veteran and other income support recipients and eligible concession cardholders including pensioners will receive a one-off $750 payment will be available from 31 March 2020.
There will be one payment per eligible recipient.

Assistance for severely affected regions

The Government has set aside $1 billion to support those regions and communities that have been disproportionately affected by the economic impacts of COVID-19, including those heavily reliant on industries such as tourism, agriculture and education.

ATO relief measures

On 12 March 2020, the Australian Taxation Office (ATO) announced a series of administrative concessions to assist businesses impacted by COVID-19, which include:
• up to 4 months the payment deferral of tax amounts due through the BAS (including PAYG instalments), income tax assessments, FBT assessments and excise by affected businesses;
• allowing affected businesses on a quarterly reporting cycle to opt into monthly GST reporting to get quicker access to any GST refunds;
• allowing affected businesses to vary 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 by affected businesses on or after 23 January 2020, that have been applied to tax liabilities; and
• allowing affected businesses to enter into low-interest payment plans for their existing and ongoing tax liabilities.
The ATO assistance is not automatic, taxpayers must first contact the ATO to request assistance, and if eligible, the ATO will ‘tailor the assistance package for the relevant taxpayer.

To know more about the application of these measures, please get in contact with us at support@smbaccounting.com.au or

P 1300 854 159.

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Six key requirements for tax compliant invoicing

There are a number of critical parts to your invoicing in order to make sure your invoices are tax compliant.

What are the must haves?

  1. Ensure the words ‘Tax Invoice’ are prominent
  2. Clearly display your full business name and address
  3. Your ABN (Australian Business Number) must be on the document
  4. The date of invoice is displayed
  5. The description of the product purchased by your customer, quantity and of course the price
  6. Display the total and the GST amount. You have 2 options of how to display this.
  • Display the GST separately and then the total value of what is sold (including GST) – Called a GST Exclusive Invoice
  • Total price of sale (including GST) with the wording “Total price including GST” – Called a GST inclusive invoice

 

NOTE: If you have sales of more than $1000 on your tax invoice you are also required to add your customer’s identity and their address or ABN.

 

If you would like any further information, please do not hesitate to conact our office 0437 726 731

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