SME support during COVID-19 outbreak

Published:30/03/2020

SME support during COVID-19 outbreak

On 12 and 22 March 2020, the Australian Government announced the $17.6 billion stimulus package it hopes will help the economy withstand and recover from the significant impact of the COVID-19 pandemic and assist businesses and individuals who are suffering financially.

The Government's stimulus package includes a range of business support measures, primarily aimed at small to medium sized businesses and not-for-profits, which are designed to promote capital investment and help support employment across all industries.

These business relief options will be administered by the Australian Taxation Office (ATO) and are now law. Businesses who have taken a hit as a result of the COVID-19 outbreak and are worried about the uncertainty around their future financial stability are encouraged to reach out to the ATO to discuss their options. There are tailored support plans available to meet your business needs and circumstances.


What support is available to eligible businesses?

Enhancing the Instant Asset Write-Off (IAWO)

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).

This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use during the specified time frame. Please note however, that for this measure to take effect, legislative changes are required.

  • 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

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://www.linkedin.com/feed/update/urn%3Ali%3Aactivity%3A6647628689381130240/
  • 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 March 2020 and may change over time as new information is made available.


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