Cash flow boost payments: Tax-free payments of up to $100,000 are available for eligible small and medium sized entities and not-for-profits (including charities) that employ people, with a minimum payment of $20,000.
Instant asset write-off: From 12 March to 30 June 2020, the threshold increases to $150,000 for business entities with aggregated annual turnover of less than $50 million.
Accelerated depreciation: Businesses with aggregated turnover of less than $500 million can deduct capital allowances for depreciating assets at an accelerated rate. This measure extends over the 2019–2020 and 2020–2021 income years.
Research and Development (R&D) Tax Incentive: The Government has deferred the lodgment dates for R&D Tax Incentive applications for 2018–2019 until 30 September 2020.
Superannuation early release: Eligible people affected by COVID-19 can apply to release (tax-free) up to $10,000 of their superannuation in 2019–2020 and up to $10,000 in 2020–2021.
Temporary residents: Certain temporary residents impacted by COVID-19 may apply for early release of up to $10,000 of their super by 30 June 2020.
Super pension drawdowns reduced: The minimum annual payment amounts for certain pensions and annuities have been temporarily reduced by 50% for 2019–2020 and 2020–2021.
Social security and support
Fortnightly Coronavirus Supplement: This $550 supplement is available for six months for job seekers, sole traders, students and some others. It effectively doubles the current payment for new and existing social security recipients from 27 April 2020. It will be paid for six months to both existing and new recipients of the JobSeeker Payment, Sickness Allowance, Youth Allowance for jobseekers, Parenting Payment Partnered, Parenting Payment Single, Partner Allowance, Sickness Allowance and Farm Household Allowance.
Stimulus payments for income support recipients: The first $750 cash stimulus payment has now gone out to 6.8 million eligible pensioners, carers, disability support pensioners, those on family tax benefits and concession card holders. A second $750 payment will be made from 13 July 2020 for eligible income recipients and concession card holders.
Regional and sector support: The Government has set aside an initial $1 billion to support regions, communities and industries that have been disproportionately affected by the economic impacts of the pandemic, including those heavily reliant on industries such as tourism, agriculture and education.
Deferring tax payments: Tax payment dates will be deferred by up to six months for tax amounts due through the BAS. This includes PAYG instalments, income tax assessments, FBT assessments and excise.
Varying PAYG instalments: The ATO has allowed businesses to vary their PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made during the 2019–2020 financial year.
ATO automatic lodgment deferrals: Company 2018–2019 income tax returns are now due by 5 June 2020 and SMSF 2018–2019 annual returns by 30 June 2020. For individuals, partnerships and trusts, 2018–2019 income tax returns can be lodged by the 5 June 2020 concessional due date. Finally, the due date for 2019–2020 FBT annual returns has been deferred to 25 June 2020.
Working from home deductions: The ATO will accept tax deduction claims using a flat rate of 80c per hour, provided a diary of working hours is kept.
FBT: If entities provide or pay for goods or services to assist employees who are sick or are at risk of becoming sick with COVID-19, this will generally be exempt from FBT if the benefit is provided for their immediate relief.
Switching to monthly GST reporting: Businesses on a quarterly reporting cycle can elect to switch their GST reporting and payment to a monthly cycle to get a quicker GST refund.
Bank loan deferrals: Banks will defer loan repayments for six months for small businesses with total business loan facilities up to $10 million who need assistance because of COVID-19.
Bank assistance for JobKeeper: The major banks have agreed to set up a dedicated hotline for customers needing to access bridging finance to pay their staff ahead of receiving money under the JobKeeper program. The banks have also agreed to expedite the processing of those JobKeeper applications.
Businesses (including sole traders and charities) must have suffered a “substantial decline” in turnover to qualify for the JobKeeper Payment of $1,500 per eligible employee. The basic decline in turnover test requires an entity to measure its projected GST turnover for a turnover test period in 2020 and compare this to the current GST turnover for a relevant comparison period in 2019. In particular, the entity needs to allocate supplies made, or likely to be made, to a turnover test period or relevant comparison period based on when the supply is made or is likely to be made, and to then determine the value of those supplies. Any shortfall is to be expressed as a percentage. If this equals or exceeds specified thresholds, the entity satisfies the decline in turnover test.
The ATO has recently issued Law Companion Ruling LCR 2020/1, a non-binding ruling that explains various aspects of the test and sets out practical compliance approaches for calculating turnover.
The government further announced at the end of March a further massive subsidy for businesses to help them retain employees so they are ready to get back to business when the current coronavirus issues subside. The new subsidy is called the JobKeeper payment.
Coronavirus stimulus package - information for businesses
the page contain useful information for businesses on how to navigate through this difficult time. It includes detailed information of government assistance program, obligations for business owners, and things they should be aware of.
A further package of legislation to implement the Government’s economic response to the COVID-19 pandemic passed both Houses on 8 April 2020 and received Royal Assent on 9 April 2020. The legislation facilitates the operation of the new JobKeeper Payments scheme, and includes amendments to the Fair Work Act 2009 (Cth) (FW Act) to allow employers to alter employee hours, duties and location of work, and for employer/employee agreements around working days and the taking of annual leave.
The following key new legislation was passed:
Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Payments and Benefits Act), and
Coronavirus Economic Response Package Omnibus (Measures No 2) Act 2020 (Omnibus Act No 2).
The majority of amendments (including those to the FW Act) commenced on 9 April 2020.
The JobKeeper scheme will help qualifying employers to retain staff during the downturn caused by the COVID-19 pandemic and support business recovery when conditions improve. JobKeeper payments are payable to qualifying employers for a maximum of 13 fortnights in respect of each eligible employee on their books on 1 March 2020 who is retained by the employer. Qualifying employers will receive a payment (fortnightly in arrears) of $1,500 per fortnight for each eligible employee.
Source: Wolters Kluwer
Fair Work Act amendments
Schedule 1 of the Omnibus Act No 2 inserts a new Pt 6-4C into the FW Act which temporarily enables employers to issue JobKeeper enabling directions. These can provide (subject to various safeguards) for increased flexibility around employees’ hours of work, performance of duties and location of work. It also enables employers and employees to make agreements for increased flexibility around annual leave arrangements and days and times of work. The Fair Work Commission will be able to resolve disputes by arbitration.
The new Pt 6-4C also requires JobKeeper qualifying employers to meet minimum payment obligations to employees who are subject to these arrangements by ensuring that at least the value of JobKeeper payments they receive through the Australian Taxation Commissioner (Commissioner) is passed on to such employees each fortnight, or the amount they would receive for the work they have performed if that would be greater. It also includes rules about the accrual of service and calculation of benefits in certain circumstances.