There is a lot of information currently circulating in relation to the financial support available for businesses. To assist, we provide a summary of what we understand. Important to note that as at the time of writing, legislation has not yet been fully passed for these proposed measures, this is due to occur very shortly, if not already.
For individuals and entities that self-prepare their BAS, we’d recommend that you consult your Accountant or Bookkeeper prior to lodging the March 2020 BAS, so they can ensure your business properly accesses all assistance measures that are available to you.
Support for individuals (including sole traders)
Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment (formerly Newstart), Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
Temporary early release of superannuation:
The government is allowing individuals (who meet the eligibility criteria) to access up to $10,000 of their own superannuation in the current financial year (ending 30 June 2020), then a further $10,000 in the 2021 financial year.
Access to loans (SME guarantee scheme):
The government is providing a guarantee of 50% of unsecured loans to lenders to enhance their willingness to loan funds to SME’s (including sole traders). What that means is, for a short period of time, the government are relaxing lending criteria to help borrowers receive loans quicker.
Support for Employing Entities
Boosting cash flow for employers:
The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible.
Under this enhanced scheme, employers will receive a payment equal to 100 per cent of their PAYG withheld from salary and wage payments (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.
On top of that, an additional payment is also being introduced in the July – October 2020 period. This means, if your entity was eligible for the above mentioned cash injection, then your entity will also receive an additional payment equal to the amount already received for the Jan to June 2020 period.
The payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon lodgement of eligible upcoming activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.
Recommended to ensure all accounting is up to date and to lodge these activity statements on time!
Payroll tax incentives
Depending on which state your business operates in, there are various payroll tax incentives available. Contact your Accountant to confirm which concession and/or incentive may apply to your business
Fairwork Australia – For employers
On Friday, Fairwork Australia updated Australian workplace laws to help employers to better navigate these uncertain times. Items updated include the following:
Support from the banking sector
Loan repayment deferrals:
Effective immediately, the majority of banks in Australia are allowing payment deferrals on business and personal finance from 3- 6 months. This includes vehicle finance, which for many, can be a significant monthly outlay.
Perhaps the most significant regular outlay for many is the home loan repayment. Again, majority of banks in Australia are allowing clients to request loan repayment deferrals ranging from 3 – 6 months, with a review at 3 months, and some banks even capitalising the interest.
In addition to the above mentioned loan payment deferrals, many banks are also offering decreased interest rates across the board. Contact your bank to see how they can help you specifically.
Support from the ATO
We have been advised recently that the ATO is exercising considerable leniency to both existing and upcoming income tax and BAS debt. A full range of assistance measures can be referred to here.
For further information on any of the above, access the Treasury report here
We hope this has been useful. Please don’t hesitate to reach out to the Commission Flow Team if you have any questions.
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