Small Business Support
Many small businesses have been hit hard by the COVID-19 crisis. State and Federal Governments have announced measures targeted at small business to try and ease the pain.
Here’s a summary of the key measures that may apply to you:
Cash Flow Boost
As an employer, you may be eligible for the Cash Flow Boost. This is linked to the amount of tax you withhold from your employees wages and will range between a minimum $20,000 and maximum $100,000.
The Government will credit your Australian Taxation Office (ATO) Integrated Client account after lodgement of your March Activity Statement. An amount equal to the tax withheld from the employee wage on that Activity Statement (or three times that amount if lodging monthly), or a minimum of $10,000 will be credited. Any excess of the credit after offsetting the Activity Statement liability will be refunded to the business.
Further amounts will then be paid on Activity Statements up until June. Whatever you receive during this period will then be received again on Activity Statements up to September.
Instant Asset Write-off
Up until 30th June 2020 any assets purchased by small business for less than $150,000 will be deductible immediately against business income.
Furthermore, up until 30 June 2021, any assets not eligible for immediate deduction will be claimed 50% on installation, and then the balance over the useful life of the asset.
Apprentices and Trainees
If you employ apprentices and trainees, eligible business will receive a 50% wage subsidy between 1 January 2020 and 30 September 2020, up to $21,000 per employee.
Early Release of Superannuation
Sole traders who have had a 20% reduction in their turnover may be able to access $10,000 of their superannuation tax free this financial year, and then a further $10,000 between 1st July 2020 and 24th September 2020.
This is subject to be approved by the Commissioner and can be applied for through your myGov account.
Coronavirus SME Guarantee Scheme
The Government will provide eligible lenders with a guarantee for loans with the following terms:
• Maximum total size of loans of $250,000 per borrower.
• The loans will be up to three years, with an initial six month repayment holiday.
• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions
Eligible business may be entitled to receive $1,500 per fortnight, back dated to 30th March 2020, until 27th September 2020.
People who are self-employed will be eligible for the payment provided, at the time of applying, they:
• estimate their turnover has or will fall by 30 per cent or more;
• had an ABN on or before 12 March 2020, and – either had an amount included in its assessable income for the 2018-19 year and it was included in their income tax return lodged on or before 12 March 2020 (or such later time as allowed by the Commissioner), or – made a supply during the period 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before 12 March 2020 (or such later time as allowed by the Commissioner);
• were actively engaged in the business;
• are not entitled to another JobKeeper Payment (either a nominated business participant of another business or as an eligible employee);
• were aged at least 16 years of age as at 1 March 2020; and
• were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.
Where the business is run by a partnership, the partnership can nominate one member of the partnership to receive the payment.
At this stage all you can do is register your interest in the scheme on the ATO website. There will at some point be an application process.
If you cannot get the JobKeeper Allowance you may be eligible for the JobSeeker Allowance (previously Newstart) through Centrelink. There is currently expanded access provision which include waived asset tests and reduced waiting times. Applications for this payment can be made through your myGov account.
State Government Grants
Many State Governments have put together a small business grant package.
In Victoria there is a $500m Business Support Fund, offering grants of $10,000 per business. The criteria for this are that the business employs staff with total payroll of less than $650,000, the business has a turnover of more that $75,000 and that you have been impacted by Covid-19 shutdowns. Applications for the grant are currently open and can be made here.
If you have any queries, please email: firstname.lastname@example.org or contact your Accountant directly via email.