March 13, 2020
On the same day the World Health Organisation declared COVID-19 a global pandemic, the federal government unveiled a $17.6 billion economic stimulus package to ease the financial fallout caused by the virus. This action aims to keep Australians in jobs and small/medium business in business during the challenging economic environment. Here is how some of these measures may affect you and your business.
Instant Asset Write-Off
If your business has an aggregated turnover less than $500 million (previously $50 million threshold), you may be eligible for an instant write-off for assets costing up to $150,000 (up from $30,000). This measure will be available to businesses for assets acquired between 12 March 2020 and the end of this financial year (30 June 2020).
Whilst still to be clarified, we expect that the asset will need to be used in the business, or installed ready for use, by 30 June 2020 in order to claim the instant write-off.
Cash Flow Boost
If your business has a turnover less than $50 million and employs staff between 1 January 2020 and 30 June 2020, you may be eligible for a 50% “cash back” on the PAYG withholding amount on your BAS/IAS from 28 April 2020. This refund is tax free and caps at $25,000 (with a minimum of $2,000).
Accelerated Depreciation Deductions
Until 30 June 2021, if your business has a turnover of less than $500 million, you will be able to immediately deduct 50% of the asset’s cost on installation (excluding assets eligible for the instant write-off).
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 through to 30 September 2020. The subsidy is also available to you if you employ an apprentice whose previous employer is a small business and could not retain the apprentice.
We note that these measures are all temporary and are subject to the passage of legislation. In the meantime, please feel free to get in touch if you have any questions regarding this economic stimulus package above.