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Government Initiatives to Support Businesses During Covid-19

Government Initiatives to Support Businesses During Covid-19

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Government Initiatives to Support Businesses During Covid-19

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  1. Government Initiatives to Support Businesses During Covid-19  With the Covid-19 pandemic battering the global economy, the Government’s decision  to provide financial assistance through a stimulus package and grants is a wave of  relief among small and medium sized business owners, but how do they actually work  for us?  Financial Stimulus Package  The stimulus package includes payroll tax changes, a tax-free increase from $900,000  to $1 million and a deferral of payroll tax for businesses with payrolls over $10 million  for a period of 6 months  ● To help businesses stay active, a deferral of gaming tax for clubs, pubs  and hotels, and lotteries tax for 6 months, conditional on these funds  being used to retain staff was also introduced.  ● Delay of the parking space levy for 6 months.  ● Deferral of rents for commercial tenants with less than 20 employees in all  Government-owned properties for 6 months.  JobKeeper Payment Program  Under this program, businesses that have been affected by covid-19 can register for a  temporary Government subsidy that enables them to claim payments for employees  when revenue has declined. Employees will receive a fortnightly payment of $1,500 per  person from 30 March 2020, for period of up to 6 months. 

  2. However, do note that both employers and employees must also meet certain  requirements to prove eligibility for Jobseeker Payment.  The JobKeeper Payment is also available to sole traders. People who are self-employed  can register their interest in applying for JobKeeper Program via The Australian  Taxation Office (ATO) from 30 March 2020.  Support for Small Business Apprentices and Trainees  Employers can now apply for a subsidy of 50 per cent of the apprentice’s or trainee’s  wage paid from 1 January 2020 to 30 September 2020.  Support is also available via the National Apprentice Employment Network, who are in  charge for coordinating the re‑employment of displaced apprentices and trainees.  Backing Business Investment (BBI) – Economic support for growth  For a limited period of 15 months, businesses will receive an incentive to support  investment and economic growth over a short term period. 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 cost.  Assets must be acquired from 12 March 2020 and first used or installed by 30 June  2021 to be eligible.  Relief For Financially Distressed Businesses  The ATO will tailor financial relief for businesses that are currently struggling due to  covid-19. This includes a temporary increase to the threshold at which creditors can  issue a statutory demand on a company and the time companies have to respond to  statutory demands received.  This includes temporary relief from personal liability for trading while insolvent and  temporary flexibility in the Corporations Act 2001 to provide relief from provisions of the  Act. 

  3. *Businesses need not apply for these measures as they have already gone into effect for  a period of 6 months.  SME Guarantee Scheme  For SMEs impacted by Covid-19, the Government will provide a guarantee of 50 per cent  to SME lenders for new unsecured loans to be used for working capital. This will enable  SMEs to access additional funding to support them through the upcoming months.  SMEs with a turnover of up to $50 million will be eligible to receive loans amounting up  to $250,000 per borrower. The loans will be valid up to 3 years, with an initial 6 month  reprieve on repayment.  Increasing the Instant Asset Write-off Threshold From $30,000 to $150,000  This new relief measure will support over 3.5 million businesses, which is estimated to  be over 99 per cent of businesses in Australia, and expected to decrease $2.5billion in  taxes paid by businesses over the next two years. The eligibility criteria has been  extended to cover businesses with an aggregated turnover of less than $500 million a  year (an increase of $50 million).  How Does it Work?  The new write-off threshold provides cash flow benefits for businesses that will be able  to deduct purchases of eligible assets each costing less than $150,000. The threshold  applies on a per asset basis, so eligible businesses can immediately write‑off multiple  assets.  ● You can claim a tax deduction for the business portion of the purchase  cost in the year the asset is first used or installed ready for use.  ● New or second‑hand assets first used or installed in this timeframe can be  included in the write-off.  ● Assets like computer hardware, office fit-outs, furniture, website services  and vehicles are amongst the potential assets, which can be written off.  The instant asset write-off goes into effect from 12th March 2020 until 30th June 2020. 

  4. Before applying for any of these relief measures, please check with your Accountant or  Tax Advisor​ for more information on your individual circumstances and eligibility of your  business.  The information in this article was compiled and sourced from ​www.business.gov.au/​ a  government website for the Australian business community.  SB- ​Netstripes     

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