To our valued clients,
We hope that you are keeping as safe as possible in these very uncertain times. The team at MJC is thinking of you all. Obviously the Government stimulus packages are coming thick and fast and everyone needs to be updated on what incentives are available to them. Below is a brief summary.
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GOVERNMENT ECONOMIC STIMULUS PACKAGES
- Payroll Tax – The Victorian Government has provided Payroll Tax Relief for all businesses with a Payroll of $3 million or less per annum. This relief is a complete refund of all Payroll Tax paid to this date for the 2019/20 financial year. There is also an exemption on payroll tax payable from this date until 30 June 2020. The refunds will start from 27 March 2020.
- Small Business – The Victorian Government introduced $500 million in funding for hardship payments, small grants and tailored support for small business. Details are yet to come.
- Cashflow – The Victorian Government also pledged to pay all outstanding supplier invoices within 5 days to help free up cash flow into the economy.
- Land Tax – Land Tax for 2020 will be deferred for eligible small businesses. The Government is yet to give specific detail on this measure.
- Equipment Write-Offs – The Federal Government introduced stimulus to incentivise businesses to purchase large equipment. Any business under $500 million in turnover that purchases equipment up to $150,000 in value will get an immediate tax write off before 30th June 2020. Those same businesses will also be eligible to an immediate 50% tax write off for all equipment purchased until 30th June 2021. There is no price limit on the assets for the 50% write off.
- PAYGW Refunds – All businesses under $50 million in turnover will be eligible for refunds of up to $100,000 if they have employees. These refunds are based upon a 100% remittance of PAYGW withheld from the employees’ salaries. There is a minimum refund of $20,000. The details of this incentive are complex and can be found in the link to the treasury announcement below.
- Apprentices – The Federal Government is also supporting small businesses to retain apprentices or trainees. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee.
- PAYGI Variations – The ATO has also pledged to allow businesses affected by the pandemic to reduce their March PAYGI to Nil and also be able to access a refund for PAYGI paid for the September and December 2019 BAS’s.
- ATO Debts – The ATO has also introduced measures to assist debt management including deferred payments and interest remissions.
- BAS Lodgements – Here at MJC, we have allocated extra resources to be able to process your BAS quicker than usual. The quicker you can get us your information for your BAS, the quicker we can request these refunds.
There are also numerous incentives available to individuals introduced by the Federal Government. In no particular order they are;
- Ability to access your superannuation due to hardship (limit of $10,000 per annum).
- Ability to reduce pension payments from super for self-funded retirees by 50%.
- Incentive payments to the unemployed.
- Incentive payments to people who have had their work hours reduced.
- Incentive payments to Sole Traders who have had their turnover reduced by 20% or more.
- Supplementary payments to Jobseekers, Parenting Payment recipients and other Government Funded recipients.
This list cannot be comprehensive as the landscape is changing by the hour, however the Federal Government has a fantastic website that summarises Federal assistance at https://treasury.gov.au/
The State Government also has a link for all of its assistance which can be found at https://www.premier.vic.gov.au/economic-survival-package-to-support-businesses-and-jobs/
Banking – In addition to this we also advise people to talk to their banks. The major banks have announced that they are willing to freeze loan repayments on commercial lending for up to 6 months. On top of this the government is waiting on injecting cheap unsecured lending into the business sector. Speak to your bank and find out what they can offer.
This is the biggest impact many of us will have seen on our business and employment. It is also the biggest social and health issue of our time. It is extremely important that we look out for each other and help each other in any way we can. Whilst we are now working remotely, we are available to chat. Please contact your accountant if there’s anything we can do to help.