Boosting Cash Flow for Employers

FOR QUARTERLY LODGERS THAT THEIR MARCH 2020 PAYG WITHHOLDING IS LESS THAN $10,000 

What you will get is:

1. $10,000.00 as a credit on your ATO Activity Statement Account upon lodgement of your BAS (or the 28th April)

2. $5,000.00 as a credit on your ATO Activity Stement Account upon lodgement of your June 2020 Qtr BAS in July 2020 (or the 28th July)

3. $5,000.00 as a credit on your ATO Activity Statement Account upon lodgement of your September 2020 Qtr BAS in October 2020 (or 28th Oct)

It doesn’t matter what you report on your June & September Qtr’s BAS’s – so long as your business is still active.

FOR QUARTERLY LODGERS THAT THEIR MARCH 2020 PAYG WITHHOLDING IS MORE THAN $10,000.00

What you will get is:

1. A credit for 100% of your PAYG Withholding reported for the March Qtr due April 2020 – Lets say for example its $12,000.00

2. I think a credit will come through of 100% of your PAYG Withholding reported for June Qtr (eg say $13,000) plus and additional credit of 50% of the March & June 2020 Qtr PAYG Withholding due July 2020 – so this would be $13,000 + 12,500

3. A credit of 50% of the March 2020 & June 2020 Qtr PAYG Withholding per above on the September 2020 BAS due Oct 2020 – so this would again be $12,500 – bringing the total to $38,000 as an example.

It doesn’t matter what you report on your June & September Qtr’s BAS’s – so long as your business is still active.

FOR MONTHLY LODGERS 

What you will get is (get ready for this ride):

1. A credit of 300% of your March 2020 months reported PAYG Withholding due April 2020 (so whatever March’s month of PAYG Withholding was x 3 will be your credit)

2. A credit of 100% of April 2020 months PAYG Withholding for April 2020’s IAS due May 2020

3. A credit of 100% of May 2020 months PAYG Withholding for May 2020’s IAS due June 2020

4. A credit of 100% of June 2020 months PAYG Wihholding for June 2020’s BAS due July 2020

5. A credit of 25% of all of the above added to June 2020’s BAS due July 2020

6. A credit of 25% of all of the above for July 2020’s IAS due Aug 2020

7. A credit of 25% or all of the above for Aug 2020’s IAS due Sept 2020

8. A credit of 25% of all of the above for September 2020’s BAS due October 2020

The first 4 above is maximized at $50,000 – so the credits stop at $50,000 and then the following four will be maximized at $12500 per quarter.

Asset Investments

These have not changed so remain at:

1. $150,000 asset write off for assets purchased between 12th March 2020 and 30th June 2020 (so not for assets purchased before 12th March 2020 – the $30,000 still stands on this one). 

2. The 50% initial year depreciation rate (up from 15%) for assets purchased from 12th March 2020 and 30th June 2021.

These aren’t bad and are great in a normal economic environment. However, my estimate is that most businesses owners will have a knee jerk reaction now and be holding money back at this time. Understandably so as we have no basis on how long this will go on for. Generally businesses do try to keep their staff on over purchasing a new car... Anyways... moving on.

Apprentices and Trainees

This remains at 50% of these wages for the period 1st January 2020 to 30th September 2020. Can’t apply for this until April, I’ll forward through the forms once they are released. So this was great – they will cover 50% of our cheapest staff members!!!

Temporary Relief for Financially Distressed Businesses

Not really much here…

Basically, the government is just making it a bit harder for creditors to push businesses into receivership by lifting the thresholds that creditors can issue statutory demands on businesses. 

There is also a lift on the personal liability for directors of companies with the ‘trading insolvent’ section of the law being more ‘flexible’. I imagine this would mean if your business does go bankrupt as a direct result of the Coronavirus, they won’t be able to come after personal assets of directors under the trading insolvent law.

Government’s Supporting the flow of Credit

What this means:

The Government will provide 50% guarantee’s for small business loans to banks. This meaning that the small business will only have to provide the other 50% guarantees (by way of property etc).

The Government is also cutting some of the red tape that was enforced by the previous banking royal commission. This is aimed at businesses being able to get loans quicker.

The Government has also made available to the banks $90 billion in funding at a fixed interest rate of 0.25%. So the cost of funding for banks should reduce (therefore this should run through to consumers… Hmmm – we all know that happens all the time…).

Further Help for Individuals and Households

There isn’t much here for anyone unless you are a recipient of Government Payments or want to withdraw your super..:  

• Temporary Early Release of Superannuation (up to $10,000). This will also be tax free (this is usually taxed as an early payment).

• Reduction of deeming rates for pensioners (this is the interest rate the government deems pension recipients’ investments to earn – whether they earn it or not)

• Implementing an extra income support payment of $550 per fortnight. This will be paid to Jobseeker Payments, Youth Allowance Jobseeker, Parenting Payments, Farm Household Allowances and Special Benefit recipients.

• Eligible concession card holders and recipients of welfare payments will get a couple payments of $750 each.

Small businesses that don’t employ and sole traders.

Nothing here for you guys at all – other then pull money from your retirement savings and if eligible, welfare payments.

ATO Debts

Absolutely no mention if the ATO will allow interest free periods or payment deferrals or payment plans with the ATO.  

My suggestion would be if you need help in this department, definitely ring the ATO to see what you can get. Use the words ‘drought effected’, ‘bushfire effected’, ‘Coronavirus income effected’, ‘mental & physical strain’ & ‘can’t afford to pay interest on this debt’. These sorts of words are triggers with the ATO, so may work for you in your favour. We can help with this if you need (however we do have to charge for this service, as it can take us up to an 1hr to get the payment plans in place – it is normally $55).

Please be aware, the ATO will not hit the ‘delete’ key on debt, and once this is over, ATO debts can affect your future funding with financial institutions. But do what you need to do here.

That’s it folks.