COVID-19 Stimulus for Your Business
Last week the Federal Government released a stimulus package to help keep Australia’s economic head above water. While much of the stimulus package was focused on health resources (of course), there were also some big measures focused on economic stimulus, with small businesses getting a much needed boost in a few areas. In particular those businesses that are providing employment so that they can keep people working.
So what does this mean for business owners?
1. Instant Asset Write Off
You can already instantly write off assets purchased for your business up to $30,000. Until June 2020 this has been increased to $150,000 and the businesses that can claim this has been increased from the previous cap of $50 million turnover to $500 million turnover. This will come at a cost of $700 million dollars to the Government but hopefully will encourage businesses to make some larger investments into their business and purchase goods before June 30 giving the economy a boost. This starts immediately! So if you have a piece of equipment or machinery that you want to purchase then now is the time to do it! You can even use it for a vehicle.
2. Accelerated Depreciation
Effective immediately businesses with a turnover of less than $500 million will be able to accelerate depreciation deductions, and be able to claim an additional 50% of the asset cost in the year of purchase (through to 30 June 2021).
3. Cash Flow
Small businesses that employ others will receive a cash flow support payment. This will be for businesses with a turnover of less than $50 million, that employ staff between January 1 2020 and 30 June 2020. A tax free payment of between $2,000 and $25,000, as a 50% of the withheld money from employees in their Business Activity Statements or Instalment Activity Statement from 28 April up to a maximum of $25,000. Even if you aren’t required to withhold any money from your employees you will get a minimum of $2,000 credit in your BAS. This will benefit 690,000 businesses. So make sure you get your BAS in on time.
$1.3 billion has been put aside to support small businesses and their 120,000 apprentices and trainees. Those eligible (have less than 20 full time employees and they must be registered as an apprentice or trainee by the 1st March 2020) will be able to claim a wage subsidy of 50% of the apprentice or trainees wage for up to 9 months from 1 January 2020 to 30 September 2020. This is huge boost for those businesses that employ apprentices and for some could be the difference of being able to keep them on over these troubled times. You will need to register for the subsidy from early April 2020 and will be required to have an eligibility assessment.
We are in favour of these stimulus packages and think that anything to help small business is worthwhile. If you have any questions or concerns about your eligibility of this then please contact us today.
DISCLAIMER: This information is of general nature. Please contact your Bookkeeper or /and Accountant to find out what you are eligible for.