Key Points from the Second Government Stimulus Package and Victorian Government Survival Package

On Sunday 22 March the Government released a second stimulus package to help individuals and business get through the Coronavirus crisis. As per the previous stimulus package announcement, more information is coming to hand as we write this but these are the key points we know so far.

CASH AND LOAN SUPPORT FOR BUSINESSES

Eligibility:

At this stage we are not aware of the eligibility being any different to the announcement of the first stimulus a week ago being, companies including not-for-profits with annual turnover of up to $50m and paid wages between 1 January 2020 and 30 June 2020.

Timing and how will payments be made:

The payments will be made through the ATO system and paid directly into the bank account you have registered with the ATO. These payments will be linked to the Pay As You Go (PAYG) Withheld reported in your BAS starting from the lodgement of your March 2020 BAS.

Payment amounts:

There is an increase in the payment amount offered in the first stimulus being:

  • 100% of PAYG Withheld from employee wages (up from 50%)
  • Minimum payment available to employers is now $20,000 (up from $2,000) with $10,000 being paid in the April to June 2020 period (lodgment of  of March 2020 BAS) and $10,000 being paid in the July to October 2020 period (lodgement of June and September 2020 BAS)
  • Maximum payment available to employers is now $100,000 (up from $25,000) with $50,000 being paid in the April to June 2020 period (lodgment of  of March 2020 BAS) and $50,000 being paid in the July to October 2020 period (lodgement of June and September 2020 BAS)
  • The ATO will make these payment by way of a credit to your Business Activity Statements

GOVERNMENT GUARANTEED LOANS

  • Federal Government is offering businesses unsecured loans of up to $250,000 for a term of up to three years through your lender.
  • Loans will be repayment free for six months and 50% guaranteed by the government.

INSOLVENCY MEASURES BEING RELAXED

  • The outstanding amounts limits will be increased from $2,000 to $20,000
  • Timing to respond will be six months instead of 21 days.
  • Relief for Directors over the next six months whilst trading insolvent

ASSISTANCE FOR INDIVIDUALS

  • A range of extra payments available including an extra $750 for Jobseeker allowance on top of the $750 originally offered.
  • Support to Casuals and Sole Traders of an extra $550 a fortnight for the next 6 months

VICTORIAN GOVERNMENT ECONOMIC SURVIVAL PACKAGE

  • Payroll tax waived – Payroll tax waived in the 2020 financial year for eligible businesses with taxable wages up to $3 million
  • Payroll tax deferrals – The same eligible businesses will also be able to defer any payroll tax for the first three months of the 2021 financial year until 1 January 2021
  • Commercial rent relief – Commercial tenants in government buildings can apply for rent relief
  • Land tax payment deferral – 2020 land tax payments will be deferred for eligible small businesses
  • Liquor licensing fees – 2020 renewable liquor licence fees waived
  • $500m Business Support Fund – The fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail
  • $500m Working for Victoria Fund – The fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food – providing vital contributions to our state’s response to the pandemic and affording those Victorians security when its needed most

All of the above is what we know at the moment. As usual please feel free to contact us to discuss your individual situation and for further advice on the above.

The Government’s Coronavirus Stimulus Package in a nutshell

Information is still being released about the Government’s Coronavirus Stimulus package, however, below is what we know so far in a nutshell.

More information will become available over the coming days and weeks. Please feel free to contact us on 1300 978 320 or info@spire-business.com.au if you have any questions or would like to discuss how the below stimulus affects you or your business individually.

$25,000 to Small and Medium Businesses:

  • Businesses with turnover up to $50 million that employ staff between 1 January 2020 to 30 June 2020 may be eligible
  • A business that pays income tax on behalf of employees (PAYG Withholding) may be eligible for a payment equal to 50% of the sum of all employees’ total PAYG Withholding, to a maximum of $25,000
  • If you are a business that pays wages but not required to pay tax you may be eligible to receive a minimum payment of $2,000
  • This stimulus will be issued automatically based on Business or Instalment Activity Statements lodged from April 28
  • This payment is tax free
  • Payments are expected to be paid within 14 days

For Apprentices:

  • The business must employee less than 20 full-time employees
  • Businesses will be offered up to $21,000 ($7,000 per quarter for the first three quarters or 9 months of the 2020 calendar year) for each apprentice
  • The payments will be equal to 50% of the apprentice’s wages
  • A large business or Group Training Organisation may also be eligible for these benefits if they employ an out-of-trade apprentice who has been in-training with a small business as of 1 March 2020
  • Employers can register for the subsidy from 2 April 2020
  • Further information available on the governments Australian Apprenticeships website

Instant Asset Write-Off Extension:

  • The current tax write-off of $30,000 for businesses with a turnover of up to $50 million is now extended to include businesses with a turnover of up to $500 million and purchases of up to $150,000
  • This extension will apply until 30 June 2020

One-off payments:

  • The government will provide one-off payments of $750 to people on Newstart and to pensioners
  • The payment is tax-free and will not be assessable income

Support to particular sectors:

  • The Government will be committing $1 billion to support businesses that have severely affected such as the travel and tourism sector

Further to the above stimulus, the ATO will be looking to be more flexible in the way they will handle taxpayers’ affairs, this is what we know so far:

  • The ATO will allow businesses who usually report GST quarterly to opt in for monthly GST reporting in order to receive GST refunds quicker
  • Businesses will be allowed to vary their Pay As You Go (PAYG) instalment to zero for the March 2020 quarter
  • Businesses who vary their PAYG instalment to zero will also be able to claim a refund made for the September and December 2019 quarters
  • The ATO will look to remit any interest and penalties applied on or after 23 January 2020 and will also be offering low interest payment plans to businesses with a tax debt owing
  • All of the above will not be applied automatically and will require a phone call or request put forward to the ATO