Categories
COVID-19

ATO Deferred Payments for Businesses Affected by Coronavirus

2020 has seen Australia suffer under the weight of devastating bushfires, disastrous floods and the social and economic collapse caused by the Coronavirus. With the economic climate looking bleak for the foreseeable future, businesses are struggling to keep afloat.

In an attempt to provide relief, the Australian Government offered a series of administrative measures to assist businesses suffering financial difficulty due to COVID-19. Among these measures comes support from the Australian Taxation Office (ATO).

Financial support options available from the ATO:

  • Deferring payments by up to 4 months
  • Quicker access to GST refunds for businesses on a quarterly reporting cycle by allowing them to opt in to monthly GST reporting
  • Allowing businesses to vary Pay As You Go (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 on or after 23 January 2020 that have been applied to tax liabilities
  • Helping affected businesses to pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans

These support measures will not be automatically implemented.

The ATO has advised that any businesses impacted by COVID-19 should contact them directly through their emergency support infoline on 1800 806 218 to request assistance.

For further information on support measures offered by the ATO, click here.

Categories
COVID-19

Second Government Stimulus Package

Just a few days after the Australian Government announced its first stimulus package to help small businesses stay afloat and keep people employed, a second stimulus package has been announced. This $66.1 billion stimulus package sees the addition of new measures designed to help Australians cope with the devastating economic impacts of the Coronavirus.

Keep reading to find out what additional measures are available.

Boosting Cash Flow for Employers

Small and medium businesses may be eligible to receive a payment of up to $100,000. This payment is designed to assist businesses with their cash flow to allow them to maintain operations, retain staff and help cover the cost of rent and bills.

Eligible employers will receive a payment equal to 100% of their salaries and wages withheld (previously 50% in the first stimulus scheme). The maximum payment has been increased to $50,000 (previously $25,000). The minimum payment has also been increased to $10,000 (previously $2,000)

This payment will be tax-free and will be available from 28 April, 2020. Payments will flow automatically through the Australian Taxation Office.

Temporary Financial Relief For Businesses

This relief aims to help businesses facing temporary financial distress due to the Coronavirus by creating a safety net to ensure they are able to operate once the crisis has passed. The hope of this package is to minimize the threat of actions that could unnecessarily push companies into insolvency and force the closure of the business.

This relief builds on the support from the first stimulus package which included: increasing the instant asset write off, backing business investments and supporting apprentices and trainees.

New additions to this package include:

  • Temporarily increasing the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000 for a period of 6 months
  • Temporarily increasing the time companies have to respond to statutory demands from 21 days to 6 months. This will also apply for a period of 6 months
  • Proving temporary relief to directors from any personal liability while trading insolvent.
  • Temporarily amending the Corporations Act 2001 to provide targeted relief for companies to deal the unforeseen results of Coronavirus

Job Keeper Payment

This payment scheme provides temporary relief for businesses affected by the Coronavirus. Eligible employers can apply to receive a payment of $1,500 per fortnight for each eligible employee for a period of 6 months. This payment is also available to eligible employees that have been let go and re-hired during the months surrounding the outbreak.

To be eligible, businesses with a turnover of less than $1 billion must have had their turnover reduced by more than 30 per cent compared to last financial year. Businesses with a turnover of over $1 billion will be eligible if their turnover is reduced by at least 50 per cent.

Eligible employees include those aged 16 over who were employed at 1 March 2020 and were either full-time, part-time or long-term casuals for a period of at least 12 months.

COVID Safe Harbour

This relief was introduced by the Federal Government on 22 March 2020 and aims to provide further relief for financially distressed businesses. To secure the benefit of COVID safe harbour, a company director must ensure that any debts incurred are necessary to facilitate the continuation of the business during the COVID Safe Harbor period. This includes a director taking out a loan to move business operations online and any debts incurred by continuing to pay employees during the course of the pandemic.

For further information regarding COVID-19 Safe Harbour, click here.

There is no doubt that the Coronavirus is causing devastating financial impacts on countless Australian businesses. Give your business the best possible chance at success during this difficult time by utilizing the support available from the Government stimulus packages.

For further information on the financial assistance available, click here.

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If you feel that your business will not make it through the current crisis, get in touch with Insolvency Experts. With over 30 years of experience, we provide low cost company liquidation. Our free, no-obligation phone consultations are available to answer all your questions, outline all options that are available to you and execute the best solution for your company moving forward.

Call now 1300 767 525 and speak directly to an expert!

Categories
COVID-19

Protecting Your Business During A Crisis

What Government Assistance Is Available

Claiming more than just lives, COVID-19 has seen the collapse of thousands of businesses and has left countless individuals out of work and without reliable income.

With no end in sight to the crippling economic crisis the Coronavirus has created, business owners are left wondering what they can do to keep their head above water and keep their business afloat.

Help is in reach!

The Federal Government is rolling out a series of measures to support small and medium businesses who are suffering financially due to the Coronavirus.

Keep reading to see what financial support your business may be eligible for:

Cash Flow Assistance For Small & Medium Businesses

This assistance aims to support businesses suffering the economic impacts of the Coronavirus to manage their cash flow, retain their employees and keep their business afloat.

Small and medium businesses are eligible to receive between $2,000 – $25,000 to help cover the cost of employee salaries and wages.

This measure is estimated to benefit around 690,000 businesses and approximately 7.8 million employees.

Who is eligible?

Businesses that employ workers and have an annual turnover of less than $50 million will be eligible. Eligibility will generally be based on the turnover of the previous year.

Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, 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.

When will it be recieved?

This payment will be delivered by the Australian Taxation Office as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.

This payment will be tax free.

Supporting Apprentices & Trainees

In an effort to retain apprentices and trainees, the Federal Government is offering a wage subsidy for eligible businesses to help cover the cost of employment for trainees.

This measure aims to support approximately 70,000 small businesses, employing around 117,000 apprentices.

Who is eligible?

This payment is available to small businesses with fewer than 20 full-time employees who employ a trainee or an apprentice. The apprentice or trainee must have been employed as of 1 March 2020.

Eligible employers can apply for a wage subsidy of 50% of their trainee or apprenice’s wage during the period of 1 January 2020 and 30 September 2020.

Payment will be reimbursed at a maximum of $21,000 per eligible apprentice or trainee.

When can I apply?

Employers can register for the subsidy from early April 2020. Claims must be lodged no later than 31 December 2020.

For further information on how to apply, including further information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

Increased Asset Write-Off Threshold

The instant asset threshold has been increased to $150,000 (previously $30,000) and has expanded access to include businesses with an annual turnover of under $500 million (previously $50 million).

Who is eligible?

Businesses with an annual turnover of less than $500 million are eligible.

The Increased Asset Write-Off Threshold is due to return to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.

When will it be recieved?

This measure applies from 12 March 2020 until 30 June 2020, for new or second‑hand assets first used or installed in this timeframe. A new legislation is due to be passed which will allow these changes to take effect.

This payment is generally claimed back via your business tax return.

Backing Business Investment

The Government is introducing a 15-month investment incentive to support business investment and economic growth over the short term by accelerating depreciation deductions.

This aims to support over 3.5 million businesses, employing more than 9.7 million people.

Who is eligible?

Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation. Existing depreciation rules will apply to the balance of the asset’s cost.

What is the eligible time period?

Assets acquired from 12 March 2020 and first used or installed by 30 June 2021 will be eligible.

Job Keeper Payment

This financial aid was designed to provide temporary financial support for businesses affected by the Coronavirus. Eligible employers can receive a payment of $1,500 per fortnight for each eligible employee for a period of 6 months.

Who is eligible?

Businesses with a turnover of less than $1 billion who have had their turnover reduced by more than 30% compared to last financial year will be eligible. Businesses with a turnover of more than $1 billion must have had their turnover reduced by at least 50% to be eligible.

For employees to be eligible they must be aged over 16 and must have been employed on 1 March 2020. They must be either full-time, part-time or long-term casuals for a period of at least 12 months. This payment is also available to eligible employees that have been let go and re-hired during the pandemic.

When will it be recieved?

The first Job Keeper payment was made in the first week of May. Payment is backdated to 30 March. Subsequent payments will be completed in the months following your claim.

COVID Safe Harbour

This relief aims to provide further relief to financially distressed businesses and directors of companies facing insolvency.

Who is eligible?

To be eligible, a company director facing insolvency must be able to prove that any debts incurred are necessary to facilitate the continuation of the business during the 6 month period commencing 25 March 2020. This includes any debts incurred as a result of continuing to pay employees during the pandemic and any cost incurred to move business operations online.

For further information regarding COVID-19 Safe Harbour, click here.

These measures aim to help businesses withstand and recover from the economic impact of the Coronavirus.

To find out more about these measures and check eligibility, visit here.

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Worried about your business making it through the Covid-19 Pandemic? With over 30 years of experience, the Insolvency Experts provide low cost company liquidation. Our free, no-obligation phone consultations are available to answer all your questions, outline all options that are available to you and execute the best solution for your company moving forward.

Call now 1300 767 525 and speak directly to an expert!