SME support during COVID-19 outbreak
The Government is extending and further tailoring its economic stimulus package to support sectors, regions and communities that are continuing to face challenges due to the pandemic. These measures will lay the foundation for a strong economic recovery once the COVID-19 crisis passes.
What support is available to eligible businesses?
Job Keeper extension
On 21 July, the Government announced it is extending the Job Keeper Payment for a further six months until 28 March 2021, especially targeting businesses and not-for-profit that continue to be significantly impacted.
However, from 28 September 2020, there will be two separate extension periods and for each, an additional actual decline in turnover test applies and the JobKeeper payment differs.
- Extension 1 (28 September 2020 to 3 January 2021) - Employers will be required to demonstrate that their actual GST turnover has fallen in the September 2020 quarter (July, August, September) and compare it to the same quarter in the previous year.
- Extension 2 (4 January 2021 to 28 March 2021) - Employers will be required to demonstrate that their actual GST turnover has fallen in the December 2020 quarter (October, November, December) and compare to the previous years quarter.
Enhancing the Instant Asset Write-Off (IAWO)
On 9 June 2020, the Government announced that they will extend the enhanced instant asset write-off arrangements until 31 December 2020. This extension will allow businesses more time to take advantage of the instant asset write-off enhancements. The extension is awaiting royal assent.
The Government will be increasing the IAWO 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).
- For more information regarding this support option, details on eligibility criteria and how to apply, click here.
Backing Business Incentive - Accelerated Depreciation
This is a 15-month investment incentive to support short term business investment and economic growth by accelerating depreciation deductions.
It will be provided to businesses with aggregated annual turnover of less than $500 million for 2019/20- and 2020/21- income years.
- For more information regarding this support option, details on eligibility criteria and how to apply, click here.
Boosting Cashflow for Employers
As per 22 March 2020, the Government is providing up to $100,000 to eligible small and medium sized businesses and not-for-profits (including charities) that employ workers. Minimum payments of $20,000 can be given to businesses and not-for-profit organisations with aggregated annual turnover under $50 million.
These payments will help to boost the cashflow of struggling businesses amid the COVID-19 crisis, in the hope they can maintain business operations, pay their bills and retain their workers.
- For more information regarding this support option, details on eligibility criteria and how to apply, click here.
There are other business relief options available through the ATO should your business need extra support. These could include deferral of some payments, quicker access to GST refunds, and options to enter low interest payment plans for existing or future tax debts.
Is there support for larger businesses?
While the initiatives announced in the recent Government stimulus package are primarily aimed at helping out small to medium sized businesses, it is recognised that many large businesses and their employees are currently being impacted by COVID-19 and that business tax obligations may be disrupted.
- For more information on how the ATO can assist large businesses during the COVID-19 outbreak, click here.
How Coverforce can help
The effects of the ongoing COVID-19 pandemic are being felt by all. As the global situation unfolds, businesses are facing new challenges and life-changing financial consequences.
For further information regarding your insurance during this time or for expert risk management advice for your business, please don't hesitate to get in touch with your Coverforce broker directly or contact your local Coverforce Office.
REFERENCES
- https://www.ato.gov.au/Media-centre/Media-releases/Support-measures-to-assist-those-affected-by-COVID-19/
- https://treasury.gov.au/coronavirus
- https://www.ato.gov.au/General/New-legislation/The-Australian-Government-s-Economic-Response-to-Coronavirus/
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
This information has been published as of 30 October 2020 and may change over time as new information is made available.
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