As a business owner during the Coronavirus pandemic (Covid-19), you need to face the possibility of team members being absent from your workplace, product supply issues and demand for your services and products reducing over the short term.
There are three urgent things you need to be aware of :
- Government Stimulus Package – Our Tax Planning meeting with you this year will be VITAL
- Business Continuity Planning
- Get your Will and EPOA updated / set up NOW
1. Government stimulus package
The Australian Government has just released a $17.6 billion economic stimulus package. The package has been marketed as a measure to protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.
The key tax and stimulus measures include:
- From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
- A time-limited 15-month investment incentive (through to 30 June 2021) which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, by 30 June 2021.
- Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations. This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Business that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $2,000 will still be made. The minimum $2,000 payment will be applied to the first activity statement lodgement.
- Wage subsidies to support the retention of apprentices and trainees – Employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.
NSW State Government Assistance for Small Businesses
- Payroll tax waived – Businesses with payroll up to $10 million per year will be waived from paying payroll tax for the next three months to the end of the financial year. It is expected the payroll tax exemptions will be applied automatically. The next round of payroll tax cuts will also be brought forward to 1st July 2020, meaning the payroll tax threshold will rise from $900,000 to $1 million in the financial year 2020-21.
- Fees waived – The New South Wales government is also scrapping certain fees and charges that apply to businesses in vulnerable sectors, including fees for bars, cafes, restaurants and tradespeople.
- Employment boost – To increase small business opportunities in the cleaning & maintenance sectors, the state government has pledged to contract additional cleaning staff for public infrastructure, such as public transport assets, schools and public buildings; and fast track the maintenance of public assets, including social housing, fencing, capital works and maintenance.
- Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners. These payments will commence to be automatically made from 31 March 2020.
When we have our 2020 Tax Planning meeting with you over the next couple of months, we will assist you with opportunities to restructure how you pay yourself to that you can receive the maximum cashflow assistance amounts from the Government.
Contact us TODAY if you would like to meet with us earlier to ensure you receive your maximum cashflow assistance from the Government.
2. Business Continuity Planning
As a business owner during the Coronavirus pandemic, now is the time to plan for employees being away from your workplace, shortages of supply, reduction in sales, and the possibility of your workplace being closed for a short period of time if every is being forced to self-quarantine.
Over the next few weeks, we would like to meet with you or have a Zoom Meeting to discuss the following:
- Employees working from home, and workplace obligations
- How do pay your bills in the short term if your sales start to dry up
- How to communicate in a reassuring way with your clients and customers
- How to keep things moving with your business
We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you and plan for what will happen in the weeks and months ahead as the coronavirus pandemic unfolds.
Contact us TODAY to book in a Zoom online meeting so we can discuss your business situation and make plans to assist you.
3. Get your will and Enduring Power of Attorney updated or set up Now
If you have to self-quarantine or are admitted to hospital as a result of the coronavirus, and you don’t have an EPOA, then no-one else can make important business or financial decisions on your behalf.
As a business owner, it is essential that you have an up to date EPOA and Will, and that your family know where these are stored.
We are able to assist to offer you a fast, easy and professional way to get these documents prepared quickly in coordination with either your solicitors or a referral to our close business contacts.
Simply email our office or call on 02 4297 0066 and we will email you our “Will and EPOA Data Capture Form” to get started.
These are times when we need to stay calm and rely on reliable news sources and information from State and Australian Government websites, especially as the coronavirus situation is changing rapidly. What you see on social media may be panicky and unreliable information – stay away from this!
Our team at Accounting Professionals are here to help you. Please email or phone us on 02 4297 0066 if you need any assistance.