SMALL BUSINESS STIMULUS PACKAGE PHASE 1

A great concern for small businesses at the moment is the impact the Coronavirus will have on small business and the community at large. The Australian government has therefore brought in various tax relief packages for small business.

Below are details of the stage 1 package.

SMALL BUSINESS STIMULUS PACKAGE

Here are details of how a small business can benefit from the stimulus package.

 1. Instant Asset Write-off

  • A business with a turnover of less than $500 million per annum will receive an immediate tax deduction for any business related asset purchased up to $150 000.
  • There is no limit to the number of assets you can purchase.
  • This applies to all assets bought between 12 March 2020 and 30 June 2020.
  • The benefit will be realised when your 2020 tax return is lodged.

2. Investment Incentive

  • A business with a turnover of less than $500 million per annum will receive a tax deduction of 50% of the cost of the asset.
  • There is no threshold to the value of the asset that may be purchased.
  • There is no limit to the number of assets you can purchase.
  • This applies to all assets bought between 12 March 2020 and 30 June 2021.
  • The balance of the assets cost would be depreciated under the existing rules.

3. Tax-Free Payments for Employers

  • A business with a turnover of less than $50 million per annum AND employs staff.
  • Employers will receive 50% of the PAYG withholding tax for employees up to a maximum of $25 000.
  • A business that does not need to withhold PAYG tax because the salaries are too low will still receive $2 000 applied against the their account.
  • This money will not be included in taxable income of the business.
  • Relates to the period 1 January 2020 to 30 June 2020.
  • The benefit will apply to the BAS or IAS returns for the March and June 2020 quarters.
  • The ATO will apply these amounts to the Activity Statement Account after the returns have been lodged.

4. Apprentices and Trainees Support 

  • A business who employs apprentices and trainees AND employs fewer than 20 full-time employees.
  • A wage subsidy of 50% of the apprentices wage is paid up to a maximum per apprentice of $21 000.
  • This applies to wages paid from 1 January 2020 to 30 September 2020.
  • Employers will have to register for this claim from April 2020.
  • An eligibility assessment will be conducted by an Australian Apprenticeship Support Network provider.
  • The benefit will be paid after the the claim process is deemed to be successful.

5. ATO Administrative Relief

There are various tax payment allowances which can be applied and is specific to each business. Some are listed below:

  • Defer up to 4 months, amounts owing from BAS returns
  • Remit interest and penalties
  • Vary PAYG amounts to zero
  • The overall intention is to assist business with making payments to the ATO as easy as possible.

If You Run a Small Business, Contact UBS Accountant and see if
they can Assist in Determining what you are Eligible for in Govt Stimulus Package.

BOOK A NON-OBLIGATORY APPOINTMENT WITH UBS ACCOUNTANTS ON THESE NUMBERS: