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First Government Stimulus Package

The government have released the first of a series of Stimulus Packages to assist businesses in dealing with issues related to the COVID-19 outbreak. Details of the First Package below:

Boosting Cash Flow

Details:

  • A tax free payment (Minimum $2,000, Maximum $25,000) will be delivered to businesses within 14 days of lodging their activity statement.
  • This is based on 50% of the withholding tax paid on employee’s salary & wages.
  • For businesses who don’t need to withhold tax, the minimum payment of $2,000 will apply.
  • The minimum payment will be applied to the first activity statement lodged
  • This payment will be applied from 28 April 2020 against outstanding ATO debt first, then any excess will be refunded to businesses.
  • If the business has no outstanding ATO debt, this payment will then be sent directly to the business.

Conditions:

  • The business needs to have had an aggregate annual turnover of under $50 million
  • The business needs to have paid withholding tax on employee’s salary and wages
  • If the business did not have a requirement to withhold but still pay salary and wages, the minimum payment will apply
  • The business has lodged its upcoming activity statements:
  • Quarterly Lodgers: March and June 2020 quarters
  • Monthly Lodgers: March, April, May and June 2020 quarters

More information can be found on the ATO Website here

COVID-19 Support Measures

If impacted by COVID-19, you will need to contact the ATO’s Emergency Support Infoline (1800 806 218) to access these measures.

These measures include:

  • Deferring payments for up to four months, covering BAS, PAYGI, Income tax assessments, fringe benefits tax, and excise
  • Changing from monthly GST reporting/payment to monthly to access GST refunds quicker (if entitled to a refund)
  • Based on start of quarter, so the earliest start of monthly reporting will be 1/4/2020
  • Once updated to quarterly, must be maintained for 12 months before swapping back to quarterly reporting/payment
  • Varying the pay as you go instalments to $0 for the March 2020 quarter.
  • If varied, a refund can be claimed for the September 19 and December 19 quarters as well.
  • The ATO negotiating to remit any interest and penalties for tax liabilities incurred after 23/01/2020
  • The ATO negotiating a low interest payment plan to assist with paying existing and ongoing tax debts.

Please note that super guarantee obligations will still need to be met. By law the ATO cannot vary these payments.

Instant asset write off

*Please note this requires a change in legislation before it comes into effect

Details:

  • Threshold has been increased from $30,000 to $150,000 for business with turnover less than $500 million
  • Proposed to apply from 12/03/2020 to 30/06/2020
  • 50% of the asset on installation will be deductible. The remaining 50% of the asset’s value will follow usual depreciation rules.

More information can be found on the ATO Website here

If you would like to discuss any of these measures in further detail, feel free to contact our friendly staff on (08) 8212 2366