The whole world is facing extraordinary situation with pandemic COVID-19. This pandemic has disturbed the social gatherings, industries and daily life of people. As the pandemic is growing, the rapid change in the climate has left the businesses to move on with their daily operations. Consequently, some of the businesses have been forced to shut down their operations.
The small- businesses are considered to be the backbone of Australian economy. While the future is uncertain at the moment, it is as crucial as ever that small business owners are assisted by accessing as many incentives during this bleak time. Hence helping small businesses understands what they are entitled to claim at this time and what authorities and banks are doing to support them at the moment. We will outline the incentives that will be or have already been implemented.
Six-Month Loan Repayment Deferral
Many banks will freeze loan repayments for up to six months as part of small business relief package in response to problems related to cashflow caused by pandemic COVID-19.
As part of the small business relief package, many banks will freeze loan repayments for up to six months in response to cashflow problems caused by the coronavirus pandemic. The small-business owners will not have to pay any substantial amount after period of six months, but will be given the option to enhance their loan or increase their repayments.
After the six month period, small business owners will not have to pay any large sum, but rather will be given the option to extend their loan or increase their repayments.
In a recent media statement, the ACCC announced that the program would require postponement of principal and interest repayments for loans to small businesses in all sectors impacted by the COVID-19 pandemic.
To qualify you must be a small business with total debt of less than $3 million owed to credit providers. These of the deferrals were made available as on March 23. Many of the banks have promised to delay the repayment of home loans, since many of them face the financial uncertainty because of economic downturn triggered by COVID-19 crisis.
The negative outcomes of COVID-19 have been felt by everyone in some manner. It has been seen many organizations forced to close or slow down their activities over past weeks because of decline in revenue, and consequently many of the workers have been let go.
While the recession seems to be on the cards, the authorities are taking the steps to assure that this does not happen and soften the blow of negative effects of COVID-19 on the economy.
On March 22, the government of Australia unveiled the second stimulus plan to combat small and medium-sized enterprises. This package allows businesses access to up to $100,000 in cash grants with the minimum of $20,000 being made available to those who are eligible. It is a boost from initial Employers’ Boosting Cash Flow initiative in which the authorities gave employers $25,000 with at least $2000 of payment.
An additional payment for the time-span of July to October 2020 is also being proposed as a part of this enhanced measure. This means that the qualifying organizations would get an additional grant which equals the initial award they got, these are the two payments of $100,000. According to the experts, this payment extends the cashflow assistance for long time, that will boost the levels of confidence.
Eligibility For Cashflow Grants
• Get the turnover of less than $50 million per year(the eligibility based on previous year turnover)
• The business must be active, to get the additional payment.
• The payment will get credited to business on the lodgement of BAS.
The considerations have been implemented to enable small companies to retain the trainees and apprentices. Fifty- percent of salary of the trainee can be subsidized for about 9 months (From 1st January to 3rd September). In total, this is $21,000 for each eligible trainee.
Eligibility For Wage Subsidy
• The small-businesses with less than 20 employees(Full-time) keeping trainees or apprentices
• The small-businesses of any size which re-engages the qualified trainees out of service.
• The organizations related to group training which re-engage trainees or apprentices.
• The workers who qualifies in the eligibility assessment held by AASN provider.
The authorities has launched the JobKeeper allowance as a further incentive for employers to keep the employees on payroll. It contains the companies earning six months’ compensation of $1500 each employee every fortnight. In this program, the workers can earn that number regardless of how many hours they have been employed.
The motivation behind this is to keep the employers and the workers linked at the time of pandemic so that the companies can immediately reactivate the operations of their businesses after COVID-19 will be over, without rehiring the staff. The payment contains self-employed part-time, full-time and casual employees. These payments will be rolled in from the month of May.
Instant Asset Write-off
An instant write-off of assets assists businesses in a double-fold approach. Firstly, it helps them to acquire new assets needed to better operate their businesses, and it assists them to instantly get the tax break on those assets. In response to COVID-19, the authorities has enhanced the threshold for the cost of new assets- this has lifted the figures from $30000 to $150000 each asset. Being able to instantly write off assets implies that businesses can claim an instant deduction in taxes for year 2019-20 financial years.
The incentive will get initiated from March 12 to 30 June. The eligible firms include the businesses with the annual turnover of up to $ 500 million. For more information regarding this, check the website of ATO.
Accelerated Depreciation on Assets
It is obviously great time to get new assets, since the authorities and ATO also provide a 50% deduction on the cost of depreciation of assets in addition to the existing depreciation deductions. This will apply to eligible assets acquired from 12 March to 30 June, and is applicable to the companies having the annual turnover of less than $500 million.
For an instance, if you were eligible previously to make claim a 30% depreciation deduction each year then you will be eligible to claim a 50% extra deduction of the value of asset.
To get an assistance, you can rely on our expert bookkeepers, they will assist you in this difficult time. With professional accountants and bookkeepers around Australia, Reliable Bookkeeping Services is ready to work with you and to take your business back to work.