There’s a lot of confusion among businesses at this time.
In order to help the economic climate, the Government has been really proactive in setting up schemes for the business community. Including grants, job keeper and job seeker.
Although these are helpful, there is still a lot of confusion around all the options at hand. To help you with this, Keeping Company has put together an overview to outline what’s available to you at the moment.
COVID BUSINESS SUPPORT AT A GLANCE
Support and advice for small and medium businesses is ever changing at the moment and the amount of information can be overwhelming and confusing. We are all facing additional challenges and stress right now making these fast paced changes more difficult to digest and keep up with. The good news however, is that there is continuing support and recognition for struggling industries to bolster them during this global crisis. Here are some key checkpoints to make sure you are gaining as many benefits as possible to assist your business in withstanding the impact of COVID-19.
JobKeeper Payment
JobKeeper payments for eligible employees of businesses impacted by Corona Virus have now been extended until 28 March 2021 with tiered payments from 28 September to 3 January 2021, and from 4 January to 28 March 2021. The original JobKeeper payments will continue and remain unchanged up until 28 September for eligible businesses.
Employees that previously failed the JobKeeper eligibility test as they were not employed on 1 March 2020, may now be eligible for payments from 3 August 2020 if they were employed on 1 July 2020.
To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter.
Cash flow assistance
Temporary cash flow payments from $20,000 to $100,000 are available to keep eligible small to medium-sized businesses operating, paying bills and retaining staff. For most eligible businesses and not-for-profits, no forms need to be lodged, this will automatically be credited to their accounts upon lodgement of activity statements.
Apprentice and trainee employees
The Australian Government has extended and expanded the Supporting Apprentices and Trainees wage subsidy, to include medium-sized businesses who had an apprentice in place on 1 July 2020.
Eligible employers can apply for a wage subsidy of 50 per cent of an eligible apprentice or trainee’s wages paid until 31 March 2021. In addition to the existing support for small businesses, medium-sized businesses will now be eligible for the subsidy, for wages paid from 1 July 2020 to 31 March 2021.
Claims for small businesses (less than 20 employees) are already open while claims for medium sized businesses (less than 200 employees) will open 1 October 2020. All claims must be lodged by 30 June 2021.
Financial distress
During this difficult time otherwise profitable and viable businesses may be facing unexpected financial distress. Measurements such as increased thresholds for creditor demands, bankruptcy proceedings, and relieving directors from personal liability have been put in place temporarily to help keep these businesses afloat. Currently these options are in place till 24 September 2020.
The threshold at which a creditor can take action against a small business has increased from $2,000 to $20,000. The mandatory response time has also increased from 21 days to 6 months. Temporary relief for directors from any personal liability for trading while insolvent has also been announced.
Instant Asset Write-Off
The instant asset write-off threshold has been increased from $30,000 to $150,000 for businesses with an aggregated annual turnover of less than $500 million.
This applies to investment in both new and second hand assets and equipment and has been extended to eligible businesses until 31 December 2020
Accelerated depreciation deductions will also be available for eligible businesses via a 15-month investment incentive initiative.
Depreciation is generally claimed back via your business tax return. At this stage, no specific details have been announced on how to access this incentive earlier..
Credit and loans – Small and Medium Enterprise Guarantee Scheme
The Government is providing a 50 percent guarantee to SME lenders for new unsecured loans to be used for working capital for small to medium businesses, enabling access to additional funding to help support them. Businesses with a turnover of up to $50 million will be eligible to receive these loans of up to $250,000. The loans will have an initial 6 month repayment holiday and be up to 3 years in the form of unsecured finance. This scheme is in place till 30 September.
The second phase of the scheme begins on 1 October and will run to June 2021. It provides businesses with access to longer and more affordable credit that can be used to help fund a wider range of investments. Businesses will be eligible to borrow up to $1 million for a term of up to five years.
Supporting regions and sectors
The Government has set aside $1 billion to support communities, regions and industries most significantly affected by the Coronavirus outbreak, for the tourism, agriculture and education industries. These funds will be available to assist during the outbreak and to help with the recovery. This support will also include waiving fees and charges for tourism businesses operating in national parks, plus assistance in identifying new export markets and supply chains.In addition, the Government is assisting our airline industry through a package of up to $715 million.
Early access to superannuation
The Government is giving sole traders, people whose business has been suspended, or those that have experienced a 20 per cent or greater reduction in turnover as a result of the pandemic, special access to withdraw funds from superannuation. The tax free withdrawals for the 2019-20 financial year are now closed. Withdrawals for eligible applicants during the current financial year are capped at $10,000. Applications can be made via the my.gov.au portal, and are managed by the ATO who will communicate with the super funds of eligible applicants.
Tax relief
The Australian Tax Office (ATO) will consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months. If you need assistance, easiest way to find out if you’re eligible is to contact the ATO on 1800 806 218 or speak to our tax professional.
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Keeping Company is a team of experts; Cloud Accountants, Business Advisors, Finance Specialists working together to provide a complete accounting packages solution for the Australian Small to Medium Business owner.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained. We are here to help, contact us today.
For all media enquires please contact Tracy Miller, CMO, Keeping Company 0414 898 452.