March 30, 2020
We are getting an increasing number of enquiries to clarify the Federal government and state government stimulus packages and though there is scant information on the details at times, we have put together the following FAQ to assist those struggling with the fallout of the COVID-19 measures in business and personal life. We have tried to break up the information into sections to assist you to find the information you want to know. If there is anything that you want clarification on, whether you are a existing client or not, please don’t hesitate to reach out to us on FaceBook, LinkedIn, Twitter and email or phone, we will be more than happy to help guide you. As the questions come in we will continue to add them to our blog. Follow us on FaceBook or keep coming back to our page to stay up to date.
COVID-19 Frequently Asked Questions – Can I access my Superannuation
If you are in any of the following categories you will be able to withdraw $10,000 of your superannuation before 30/06/2020 and another $10,000 any time before 30/06/2021
- you’re unemployed
- you’re eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
- on or after 1 January 2020
- you were made redundant
- your working hours were reduced by 20 per cent or more
- if you’re a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more.
The money you withdraw will be tax free
To apply you need to go through the myGov website which will be overseen by the Australian Taxation Office. If you have a self managed Superannuation Fund you still need to go through this channel and not just draw the funds.
The Tax Office will make a determination based on your application and provide a notice to your super fund who will then release the funds to you. You need to ensure that your personal details are up to date with your Superannuation Fund.
COVID-19 Frequently Asked Questions – What Support is available if I employ trainees and apprentices
A reimbursement up to a maximum of $21,000 per eligible apprentice ($7,000 per quarter) is available if you:
- have less than 20 Full time employees and have at least 1 apprentice.
- The apprentice/trainee you are applying for needs to be employed on or prior to 1 March 2020.
If you have more than 20 full time employees:
- If you re-engage an eligible out-of-trade apprentice or trainee you will be eligible for the subsidy. This means if a small business isn’t able to retain an apprentice that would be eligible, their subsidy will transfer to your business.
Assistance is for wages paid between 1 January 2020 to 30 September 2020.
To receive the subsidy you need to apply with an Australian Apprenticeship Support Network Provider who will complete an assessment
It will be available from early April with final claims to be lodged prior to 31 December 2020.
COVID-19 Frequently Asked Questions – I am having trouble paying my obligations to the Tax Office, can I receive an extension or a payment arrangement?
- On a case by case basis the Tax Office will give extensions on administrative obligations similar to what was provided to the bushfire effected businesses.
- This will cover lodgement of tax returns and Business Activity Statements and payment of them
- You will need to show the Tax Office how your business has been effected by the virus.
- Accounting bodies are currently lobbying the ATO to provide blanket extensions for lodgement of tax returns but so far the Tax Office have been silent on these calls.
COVID-19 Frequently Asked Questions – I pay wages, how much cashflow assistance will I receive?
- If your turnover is under $50 Million and you pay wages; and
- derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020, or
- made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020
You will be entitled to receive:
A) Boosting Cashflow Assistance of 100% of the PAYG Withholding reported on Business Activity Statements (the withholding from employee wages at W2 on your BAS). You will receive a minimum of $10,000 and a maximum of $50,000.
B) An additional payment equalling the total cashflow boost assistance you have received
This means you will receive a total minimum of $20,000 and a maximum of $100,000
Lets look at the two payments separately:
Boosting Cashflow Assistance:
- The minimum amount you will receive for the March quarter is $10,000. So if your PAYG withholding for the March quarter is less than $10,000, you will receive the minimum $10,000.
- If your PAYG Withholding is more than $10,000, you will receive 100% up to a maximum of $50,000
- For the June quarter –
- if you PAYG Withholding for March and June is under $10,000 you have already received your minimum amount of $10,000 on the March BAS therefore you have already received your entitlement.
- If your PAYG Withholding for March and June is over $10,000 but under $50,000, you will receive 100% of the PAYG Withholding you report on the June BAS, however if a minimum amount was paid in the March quarter your June payment will be reduced to compensate for what you have already received.
- If your PAYG Withholding for March and June quarters is over $50,000, the payment amount will be adjusted so that your do not exceed the combined limit of $50,000.
- For monthly BAS lodges you will receive a credit that is calculated at three times the rate (300 per cent) in the March 2020 activity statement, to align with quarterly lodgers. Your April and June monthly activity statements will be calculated at 100% but will be adjusted so you do not exceed the $50,000 limit
- You will also receive a cashflow boost after lodging the June 2020 BAS equating to 50% of the total assistance you received for the March and June quarter. For example, if you received the minimum amount of $10,000 in March quarter, you will receive an additional payment of $5,000 in the June quarter. If you received $50,000 over the March and June quarters, you will receive an additional $25,000 for the June Quarter
- You will also receive a cashflow boost after lodging the September 2020 BAS equating to 50% ofthe total assistance you received for the March and June quarter. Please refer to the examples in the above dot point
You will receive the payments as a credit on your Tax Office Integrated Client Account. You do not have to apply for the assistance. When the credit exceeds your existing ATO liability a refund will be issued by the Tax Office generally within 14 days.
COVID-19 Frequently Asked Questions – I am a sole trader with no employees. What assistance am I entitled to?
Sole traders, contractors and casual workers who are currently making less than $1,075 a fortnight (which is $27,950 per year) will be eligible to receive the full coronavirus supplement of $550 per fortnight.
The supplement and expanded access to sole traders will commence from 27 April 2020. For the first six months there will be no assets test but an income test will still apply. You can not be receiving annual leave and/or sick leave or other employer entitlements nor can you be receiving income protection payments.
You may also apply for Job seeker payments. Sole traders will automatically meet the requirement to actively build their skills or look for work by continuing to develop and sustain their business.
COVID-19 Frequently Asked Questions – What are the changes to accelerated Depreciation for small business?
The instant asset write off has been increased from $30,000 to $150,000 for assets either installed or ready for first use by 30 June 2020.