Date published: 13 March 2020
(updated 30 Mar 2020)
It's been an interesting couple of weeks across the world, with the outbreak of Coronavirus (COVID-19).
As it currently stands, the World Health Organization (WHO) has announced that COVID-19 is a pandemic.
The Australian Government has unveiled their econmonic response to the Coronavirus.
Here we provide updated information about assistance being provided to business, and also how we will ensure business continuity during this time - this will be updated as new information becomes available or if existing information changes, so bookmark if you need to.
- Federal Stimulus Measures
- State Based Support Measures
- ATO Support Measures
- Fair Work (this page is being updated by FW daily)
- Bank and Financial Institutions
- ACCC - Travel and Event Cancellations
- Laurus Business Continuity Statement
Federal Stimulus Measures
On 12 March 2020, the Australian Government announced their economic response to the Coronavirus. Additional ecomonic reponses were announced on 22 Mar 2020. There are a number of key areas, with the following directly impacting on business:
- Cash Flow Assistance for Business
- Delivering Support for business investment
- Temporary Relief for Financially Distressed Businesses
Full details of the complete assistance (for both business and individuals) can be found here but in summary, here is what business will be able to access:
Boosting Cash Flow for Employers
This measure will provide up to $100,000 back to eligible small and medium sized businesses and Not For Profits that employ people, with a minimum payment of $20,000 to eligible business that employ staff. The payment will be tax free.
- Eligible to business entities with an aggregated annual turnover <$50 million, and NFPs, including charities, with aggregated annual turnover <$50M
- Must employ workers
- Will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 upon lodgement of activity statements
- Payment will be equal to 100% of the amount withheld from employees salary and wages, up to a maximum payment of $50,000
- Eligible businesses that pay salary and wages will receive a minimum payment of $10,000 even if they are not required to withhold tax.
- An additional payment is being introduced in the July-Oct 2020 period, where elgible entities will receive an additional payment equal to the total of the previous payments they have recieved. This means elgible entities will receive at least $20,000 up to a total of $100,000 for both payments.
At this stage, there will be no direct action required by our clients who will be eligible to access this measure - it will be dealt with
automatically upon lodgement of activity statements. Where the application of the measure places the activity statement account in
credit, the ATO will trigger a refund within 14 days.
Supporting Apprentices and Trainees
Eligible employers can apply for a wage subsidy of 50% of an apprentice or trainees wage paid during the 9 months from 1 Jan 2020 to 30 Sep 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
- Eligible to businesses employing fewer than 20 full-time employees who retain an apprentice or trainee
- The apprentice or trainee must have been in training with a small business as at 1 Mar 2020
- Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider
- Employers can register for the subsidy from early April 2020, and final claims for payment must be lodged by 31 Dec 2020
If you have apprentices and/or trainees, please reach out to us for assistance and we can work with you to ensure you are correctly registered and able to claim for this measure.
Temporary Relief for Financially Distressed Businesses
- Temporary increase to the threshold at which creditors can issue a statutory demand on a company and initiate bankrupt proceedings on and individual, and an increase to the time companies and individuals have to respond to statutory demands that have been received.
- Threshold increases from $2,000 to $20,000
- Timeframe increases from 21 days to 6 months.
- Temoprary relieve for directions from any personal liability for trading while insolve.t
- Temporary flexibility in the Corporations Act 2001 and to provide targeted relief from provisions of the act to deal with unforseen events that arise because of the Coronavirus health crisis
- Tailored solutins for owners and directors of business currently struggling, including temporary reduction of payments or deferrals, or withhholding enforcement action including DPNs and windups.
Increasing the Instant Asset Write-Off **
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include all businesses with an aggregated turnover of less than $500 million (previously $50 million).
- Threshold applies on a per asset basis - businesses can immediately write-off multiple assets
- Applies from the announcement (12 March 2020) until 30 Jun 2020, for new or second hand assets first used or installed ready for use in this timeframe
If you are considering purchasing assets, please consider the cashflow implications of the purchase. The increase to the instant asset write off DOES NOT mean that you will receive a tax refund, but rather that your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year. Please contact your accountant or ourselves to discusss the cashflow implications further.
Backing Business Investment **
The Government is introducing a time limited 15 month investment incentive to support business investment and economic growth, by accelerating depreciation deductions.
- A deduction of 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the assets cost.
- Eligible to businesses with an aggregated turnover below $500 million
- Eligible assets are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997, acquired after the announcement (12 March 2020) and first used or installed by 30 Jun 2020.
- Does not apply to second hand Division 40 assets, or buildings and other capital works depreciable under Division 43.
We recommend that prior to purchasing assets that may be deductible under this measure, that you contact your Tax Agent and seek their specific advice, to ensure your business, and the asset being purchased is eligible for the measure.
** This information is of a general nature and should not be considered taxation advice
Support for Immediate Cash Flow Needs for SMEs
- A guarantee of 50% to SME lenders to support new short term unsecured loans to SMEs
Quick and Efficient Access to Credit for Small Business
- Cutting red tape by providing a temporary exemtpion from responsible lending obligations for lenders providing creit to existing small business customers
ATO Reference information for Federal Measures
ATO Support Measures
The full media release can be found here
- Deferral of payment dates for activity statements, income tax assessments, FBT assessments and excise
- Option to change from 1/4 to 1/12 reporting to access GST refunds
- Option to vary PAYGI to nil for the March quarter BAS and claim a refund for any instalments made for Sep and Dec 2019 quartgers
- Remission of interest and penalties incurred on or after 23 Jan 2020
- Availability to enter into low interest payment plans.
Other Business Support Details
- Worker Transition Scheme and Rapid Response
$2.5 Billion Business and Industry Support
Payroll Tax Support
- Immediate payroll refunds
- Support for tourism operators and hospitality workers
- Support for Fisheries
- Support for Exporters
- Supporting displaced workers and direct industry assistance
- Rent relief for Businesses in government premises
- Liquor licensing waiver in 2020/21
- Payroll Tax Support
- Promoting Queensland
- Counselling and support
- Queensland COVID-19 jobs support loans
- Mentoring Sessions
- Financial Workshops
- QRIDA - Job Support Loans of up to $250k for carry on finance with an initial 12-month interest free period for businesses to retain staff
Brisbane City Council
Chamber of Commerce and Industry Queensland
Business Essentials Subscription - Free
Sign up for our Business Essentials subscription by 31 March 2020 and pay nothing for 12 months. You’ll get Fair Work help when you need it, plus marketing insights and cost-saving tips to help you get through the worst trading conditions since the GFC. (Normally $792)
New South Wales
- Waiver of Payroll Tax for businesses with payrolls of up to $10M for three months
- Bring forward of raised Payroll Tax thresholds for next FY
- $80M for fees and charges to be waived form small business such as cafes and restuarants, and those in trades
City of Melbourne (Local Council)
- $10 Million local economic package
- A Virtual Business Support Summit at Melbourne Town Hall
- Suspending fees for Food Act registrations and street trading permits for 3 months
- Halving rent for eligible tenants in Council owned buildings for 3 months
Details of City of Melbourne Stimulus Package - Click Here
Victorian Chamber of Commerce and Industry
12 month membership waiver for any new entrly level memberships (Networker - $350 and Essentials - $700), and credit to current members up to $500.
The Victorian Government is yet to announce a stimlus package.
Government of South Australia
- $25,000 cashflow assistance to small to medium sized businesses, with a minimum payment of $2,000 or eligible businesses
- 15 month incentive to support business investment and economic growth over the short-term
- Wage subsidy if you employ and apprentices and trainees
- $350 million stimulus package for local government to upgrade roads, hospitals, tourism infrastructure and expanded economic and business growth fund
Government of Western Australia
- $607 million stimulus package to support WA households and small businesses in the wake of COVID-19
- $402 million to freeze household fees and charges until at least July 1, 2021
- Freeze will apply to entire 'household basket', including electricity, water, motor vehicle charges, emergency services levy and public transport fares
- Energy Assistance Payment (EAP) doubled to support vulnerable Western Australians, including pensioners
- $114 million in additional measures to support small businesses
- Small businesses that pay payroll tax will receive a one-off grant of $17,500
- $1 million payroll tax threshold brought forward by six months to July 1, 2020
- Businesses impacted by COVID-19 can defer payroll tax payments until July 21, 2020
- Building on $760 million announced in the past few months to stimulate economy
- Stimulus measures made possible due to McGowan Government's responsible financial management and strong budget surplus
For more details of WA Stimulus package - Click Here
Western Australian Government Website - https://www.wa.gov.au/
- Interest free loans available to small businesses in hospitality, tourism, seafood production and export section
- Businesses with turnover of less than $5 Million will be eligible for loans to purchase equipment or restructuring business operations
- Payroll tax waiver for businesses with payrolls up to $5 Million
- Payroll tax deferred for 4 months for businesses in hospitality, tourism and seafood industries
- Small businesses contracted by the state government to be paid within 14 days instead 30 days
- $5,000 small business grant to assist in hiring apprentices or trainee in tourism, hospitality, construction or manufacturing industries
- Fees wavier for certain licenses and leases applicable to small businesses
Northern Territory State Government
- $65 Million Jobs Rescue & Recovery plan for the purpose of keeping businesses open, maintaining cash flow and territorian working
- Providing all eligible businesses with $10,000
- If the recipient put in their own fund of $10,000, the government will match that with an additional $10,000- Creating a $30,000 value
- Freezing government charges - including electricity, water and car registeration until 1st July 2021
- $6,000 grant for Territory homeowners and landlords who spend $2,000 and, $4,000 grant who spend $1,000 in home improvement
Coronavirus and Australian Workplace Laws
Bank and Financial Institutions
Here is a comprehensive list of links to your banks financial hardship teams, from the Australian Banking Association
Australian Competition and Consumer Commission (ACCC)
Laurus and our business continuity strategy
For a number of years, Laurus Bookkeeping have been leveraging cloud based systems to service and support our clients. This has meant that the majority of our work is conducted off-site, with no requirement for face to face contact with our clients.
Our strategy is to continue to support and assist our clients in this manner, and we expect that any interruption to our business operations would only be triggered if one of our staff became unwell. In this situation, we have staff capacity to ensure that work can be undertaken by another member of our team, and that there is no disruption to our client deliverables.
We do, at times, have a requirement to meet with our clients for service delivery, and with the rapid global spread of Coronavirus, our focus first and foremost is on the safety of our employees.
With this in mind, and in line with our legal obligations and official guidance from relevant authorities, we have decided to suspend face to face contact with clients unless the requirement is critical.
All our staff will be available for phone advice or via Zoom video conferencing and we do not expect that there will be any disruption otherwise to our services.
For information in regards to best practice, we are relying on the following sources of information:
The next few months are going to be challenging for businesses and individuals in Australia, and across the world. If you have any
questions about the government assistance packages being provided to business, please contact