Over the past few weeks the Government have announced a number of measures to assist small businesses impacted by COVID-19 and while we have been doing our best to keep our clients abreast of these (you can sign-up here to be notified also) we have decided to also share these on our blog as a way to keep others who may come to our website informed.
These measures announced by the Australian Government designed to keep businesses afloat include:
Business investment
- Increase of the instant asset write-off scheme to $150K until 30 June 2020.
- Accelerated depreciation deductions for new assets that don’t qualify for the instant asset write-off scheme until 30 June 2021
We’ve created a Downloadable COVID-19 Flyer on both of these Business Investment Schemes if you are after more information on either of these.
Cash flow assistance for small and medium sized business
- Tax-free payments up to $100,000 for employers between 28 April 2020 – 28 October 2020.
Eligible businesses with a turnover of less than $50 million will initially be able to access tax-free cash flow support, with the minimum amount being $10,000 and the maximum amount being $50,000.
However, additional support will be provided in the July – October 2020 period so that eligible entities will receive total minimum support of $20,000 and up to $100,000.
The cash flow support measures will be provided in the form of a credit in the activity statement system.
- Wage subsidy of up to 50% of an apprentice or trainee wage
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9months from 1 January 2020 to 30 September 2020. The payments are accessible to businesses with less than 20 employees. Employers will receive up to $21,000 per apprentice ($7,000 per quarter).
Access to working capital
- Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs.
- $130 Billion JobKeeper Payment – designed to keep employees with employers who have experienced a downturn of more than 30% (50% for businesses over $1bn) due to COVID-19. Eligible businesses will receive a subsidy of $1,500 per fortnight per employee.
- Temporary relief from some Corporations Act requirements
Targeted support for severely affected sectors, regions and communities
$1 billion has been committed to support sectors, regions and communities disproportionately affected by the economic impact of the coronavirus. Tourism, agriculture and education are specifically mentioned.
Initial measures include:
- Waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks
- Additional assistance to help businesses identify alternative export markets or supply chains
- Measures to promote domestic tourism
Further plans and measures will be developed with the affected industries and communities.
Changes to the solvency safety net
Temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months.
Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.
For more information or to confirm your eligibility for the above we’d recommend visiting the ATO website or speaking to your accountant.
You many also like to check out the COVID-19 state by state financial support guide put together by SmartCompany to see what is available in your state.
Other helpful links:
