What’s new

07 April 2020

COVID-19 - Government & Tax Assistance

The government has announced various measures and assistance packages over the past few weeks to try to minimise the impact of the Coronavirus on the economy and people's livelihoods. The tax and income support packages announced so far are:

 

PAYG Withholding credit for employers 

Small to medium sized businesses with an annual turnover below $50 million, who have employed workers prior to March 12th 2020, will be eligible for the 100% PAYG withholding credit for the January - June BAS/IAS period. Credit s will be issued with the March BAS lodgment.

The minimum credit amount will be $10,000, while the maximum payment is $50,000. This means those employers who have withheld under $10,000 will receive the full mimimum $10,000 credit against their March BAS. Those that have withheld over $10,000 in PAYG tax on wages, will be credited 100% of the amount they have withheld up to the maximum of $50,000.

This is not a direct payment to your business bank account. It can result in a refund against your BAS, but this will be based on individual circumstances. So we suggest getting the BAS for March lodged ASAP after the end of March.  

Depending on whether you lodge monthly or quarterly, the balance up to $50,000 may be offset against lodgements up to and including June to help ease cashflow.

Following this first credit payment, a bonus payment against your BAS lodgements may be available for the September quarter and will be based on the amount credited up to June. So if you recived a credit of $50,000 against the March BAS, you would receive another credit of $50,000 in the July-September reporting period. This would bring the total package available up to $100,000 as announced by the government. 

 

Superannuation

The government has annoucned a scheme to allow eligible individuals the ability to access $10,000 from their super fund this year and another $10,000 next year. This is a hardship measure and you will be required to meet one or more of the following criteria: 

  • Be unemployed
  • Eligible to receive certain government allowances or payments
  • On or after 1st Jan 2020 - you were made redundant; or had reduced working hours by 20% or more; or you are a sole trader and your business was suspended or there was a reduction in your turnover of 20% or more 

 

PAYG Tax Instalments

Company and individual tax instalments can be varied down to zero for sole traders, individuals and companies for the remainder of this financial year - i.e. for the March and June quarter lodgements. A credit can also be claimed for any PAYG instalments paid so far this financial year. 

Any tax payable on the annual profit for 2019-2020 will still be payable on lodgement of the tax return as normal. If you lodge through AFYF, you should then receive the extended due date on lodgement of the 2019-2020 tax return in March or May 2021. This does not remove your obligation to lodge on time.

 

ATO Payment Deferrals

Deferrals and payment plans can be applied for with the ATO for any current amounts owing on your income tax or BAS accounts. This may provide up to a 6 month window to ease pressure on your cash flow now, and allow you more time to get back on your feet. 

 

Payroll Tax for NSW 

For small businesses in NSW with payrolls of up to $10 million per year, payroll tax will be waived for 3 months covering March, April & May 2020. With the year end reconciliation of payroll tax, a 25% discount will be applied to the total reported. 

 

Loan interest delay

Many banks and lenders are granting payment holidays or deferrals on loan interest. 

Some equipment and motor vehicle finance lenders are also allowing for payment delays or repayment holds for a certain period.  

Speak to your lender about the possibility of having your interest repayments delayed on loans, mortgages and finance arrangements. 

 

Increased Allowances via Centrelink


Over the next 6 months the government is temporarily expanding eligibility criteria to income support payments via Centrelink.  In particular, the Job Seeker (previously called Newstart) allowance has been increased by $550 per fortnight. This could mean payments up to $1,100 per fortnight to existing and new recipients of some allowances and family payments.

More information can be found in these government fact sheets here and here.   

While we cannot apply for Centrelink assistance for our clients, please contact us if you need any details regarding income, tax file numbers, etc.

 

 

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