Important Stimulus Package Update – as at 23 March 2020

Our Office – update

Our office is remaining open to all queries. We are postponing face to face meetings, but will still be able to provide advice remotely via email, phone or video conferencing.

ATO Credit of up to $100,000 for PAYG Withholding

This is an extension of the previously advised $25,000 PAYG withholding credit. It has been now increased to a maximum of $100,000 with a minimum of $20,000 for up to 100% of amounts withheld from salary and wages. It will be applied automatically to activity statements starting with March 2020.

The credit will apply to businesses with a turnover of under $50 million that employed staff on or before the 12^th of March 2020.

It will also now apply to not-for-profits.

The credit will be split over the following periods

1. March to May 2020 – minimum of $10,000 and a maximum of $50,000
2. June to September 2020 – a further minimum of $10,000 and a further maximum of $50,000

The second payment will require the business to be still active, and will be delivered as a portion of the amount previously received under this incentive.

It will be paid as follows:

• Quarterly Activity Statement lodgers = half of the amount previously credited, on lodgement of June 2020 BAS and a half on lodgement of the September 2020 BAS.
• Monthly Activity Statement lodgers = quarter of amount previously credited, on lodgement of the June, July, August and September 2020 BAS/IAS’s.

For more information please contact our office or follow this link.

Supporting lenders by guaranteeing new debts

The coronavirus Small & Medium Entities (SME) guarantee Scheme has been proposed by the Government. This scheme will provide a Government guarantee of 50% to support short-term unsecured loans to SME’s. This scheme is intended to increase the willingness of bank to lend SME’s money.

Other eligibility criteria include:

1. Turnover of less than $50 million
2. Maximum loans of $250,000
3. Loan term of 3 years
4. No repayments required for the first 6 months
5. Loans will otherwise be unsecured finance

Temporary relief for distressed businesses and their directors

The government has introduced temporary rules to help distressed businesses that are worried about insolvency and bankruptcy implications from the impact of COVID-19.

Under these rules, the threshold for issuing statutory demands has increased from $2,000 to $20,000 and the minimum amount of debt before bankruptcy proceedings can be started has increased from $5,000 to $20,000.

There has also been relaxation on the insolvent trading rules, to relieve directors of personal liability that would otherwise be associated with insolvent trading, for a period of six months.

For more information please contact our office or follow this link.

Early access to super

Individuals impacted by COVID-19 will be able to access $10,000 from their super between April 2020 and June 2020, with a further $10,000 available in the 2021 financial year, if eligibility criteria are met.

Eligibility criteria are:

• You are unemployed
• On or after 1 January 2020 you were:
  • made redundant or
  • had your working hours reduced by more than 20% or
  • you are a sole trader whose business was suspended or has had their hours reduced by more than 20%
• Eligible to receive one of the following government payments
  • Jobseeker
  • Youth allowance for job seekers
  • Parenting payment
  • Special payment
  • Farm household allowance

To access super under these measures you must apply at www.mygov.au and be able to certify that you met the criteria. This is the same whether you have a regulated fund or SMSF. Please do not just take cash from your SMSF!

For more information please contact our office or follow this link.

Relief for self-funded retirees

Pension minimums will be reduced by 50% for both 2020 and 2021 financial years. This is designed to take the pressure off anyone who doesn’t require access to their pension for personal cash flow. It allows for capital to remain in the market to avoid crystallising losses.

ATO Administrative Support

A number of administrative concessions have been announced by the ATO. These include:

• Deferring BAS (including PAYG Instalments), income tax assessments, fringe benefits tax assessments and excise payments by up to four months. You still need to lodge the forms on the usual due date
• Allow those on a quarterly reporting cycle, to opt into monthly GST reporting in order to get quicker access to GST refunds that may be applicable. You will need to remain on a monthly reporting cycle for a minimum of 12 months if you opt in.
• Allowing businesses to vary pay as you go instalments to zero for March 2020 quarter. Businesses that vary their PAYGI to zero will also be able to claim a refund for any instalments paid in September 2019 and December 2019 quarters.
• Remitting any interest and penalties incurred on or after 23 January 2020 that have been applied to tax liabilities
• Working with affected business to help them pay their existing and ongoing tax liabilities by allowing low interest payment plan options.