Cashflow Assistance for Small to Medium Businesses Due to Coronavirus
The Australian Government has announced a stimulus package to help small to medium businesses deal with the economic implications of the Coronavirus. This assistance will support businesses to manage cash flow challenges resulting from the economic impacts of the Coronavirus and help businesses retain their employees. These two measures are designed to support employing small and medium enterprises and to improve business confidence.
Boosting Cashflow for Employers Measure
The Government through The Boosting Cash Flow for Employers measure will provide up to $100,000 back to small and medium-sized businesses, with a minimum payment of $10,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
• The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
• Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $100,000.
• Eligible businesses that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.
Increasing the instant asset write-off
The Government has increased the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Backing business investment
The Government is introducing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.