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UPDATE: Important Stimulus Package incentives that may help your business

As the COVID-19 situation continues to develop, we understand that you may be facing all sorts of new challenges in your personal and business lives. We understand that many of you have questions about how the stimulus packages will affect your businesses and we are here to break it down for you.

1. The instant asset write-off

The write off threshold has been increased to $150,000. This means businesses with revenue of less than $500M can deduct 100% of the cost of assets under $150,000 purchased from 12th March 2020 until 30th June 2020.
A threshold of $57,581 (depreciation limit) applies to motor vehicles.

2. Accelerated depreciation for assets over $150,000

50% of the purchase price of assets over $150,000 can be claimed in the 2020 financial year in addition to normal depreciation rates. For example, if the item would normally be depreciated at 15% in the first year, you could claim 65% (50% + 15%) of the purchase price in the 2020 financial year. The asset is then depreciated at normal rates in the following years.

3. Boosting cash flow for employers

100% of PAYG withheld from employee’s salary and wages from the March, June and September 2020 quarters will be credited/ refunded (capped at $100,000).

If you lodge your PAYG withholding quarterly, each time you lodge your BAS, your total withholding amount will first offset any GST etc. payable and any excess credit will be refunded to you as cash.

If you lodge monthly, your March lodgement will be a little different. The offset will be calculated at 300% of your PAYG withholding (to cover the January and February periods). You will then receive 100% of your PAYG withholding in the months following (until September 2020).

The March refund will be available from 28th April 2020.

4. Employers paying wages but not withholding tax

If your employees aren’t earning enough to warrant PAYG withholding, you are still eligible for a one off $10,000 credit/ refund in the March quarter.

5. Incentives for apprentices

A wage subsidy of up to $21,000 per apprentice has been announced for small businesses with under 20 full time employees. Any apprentices or trainees must have been in training on or before 1 March 2020 to be eligible. You will be entitled to 50% of the apprentice/trainee’s wage from 1st January 2020 to 30 September 2020. The payments will be separated into a maximum of $7,000 per quarter, per apprentice.

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

If the apprentice leaves or their employment is terminated, a medium sized business is then eligible to apply for the subsidy for the remainder of the period until 30th September 2020.

6. Putting business loans on hold

All business loans, equipment and motor vehicle finance can be paused for up to 6 months. Some financiers are allowing loan holds for 3 months and requesting a reassessment before extending. Please contact your broker or financier regarding eligibility.

7. Putting home loans on hold

Similarly, home loans can be paused, however the banks will capitalise the interest for that period. This means that if $1000 interest would be applied each month for 6 months, $6000 would be added to the principle of your loan. Please contact your broker or bank for eligibility criteria.

8. Early super access for the self employed

If you are a sole trader or partner in a partnership, you are eligible to withdraw $20,000 from your super if your income has dropped by 20% or more. The payments are available in 2 instalments – $10k in April and $10k in July.

9. Jobseeker payments

If you are eligible for Jobseeker payments, you will be entitled to 2 payments of $750 in addition to the $550 fortnightly payments. Please log into your MyGov account or contact Centrelink for more information.

Please know that we are committed to getting accurate information to you as quickly as possible to assist you in any personal or business decisions you may need to make in the coming weeks.

As the legislation changes, we will keep you updated but please know that we are here for you. If you have any questions, please do not hesitate to contact us on (02) 4934 4260.