BAS & IAS Prepare – Lodge

Coronavirus Stimulus Package announced

As you all would have heard the Prime Minister announced the Stimulus Package last week.  The details you need to know are below.

Cashflow assistance for businesses

Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

  • The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
  • Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent 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.

This measure will benefit around 690,000 businesses employing around 7.8 million people.

This will be applied for a limited number of activity statment lodgements.  The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements.  Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Coronavirus Stimulus Package

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150 per cent) in the March 2020 activity statement.

The minimum payment will be applied to the business’ first lodgment.

An example of this is if you have only deducted $10,000 of payg for all your employees over the 6 month period above you will be entitled to $5,000.   In order to receive the full $25,000 you would need to have deducted $50,000 in payg for all employees over the above 6 month period. 

The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

Business investment support

  • An increase in the instant asset write-off threshold from $30,000 to $150,000, expanded to include businesses with a turnover of less than $500 million per annum (previously $50 million).
  • A 15-month investment incentive (available until June 30, 2021) to support business investment through accelerated depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of asset costs in the year of purchase.

Stimulus payments for householders

  • One-off $750 payments from 31 March will be made to pensioners, social security, veteran and other income support recipients and eligible concession card holders.