How COVID-19 assistance packages can help the boating industry
Instant tax write-off and small business cash boost among measures to benefit businessOn March 12, Prime Minister Scott Morrison announced a $17.6 billion plan to keep the Australian economy and businesses afloat in the face of unprecedented challenges posed by the spread of coronavirus.
Big winners from the package include vulnerable members of the community as well as small businesses.
On March 22, the Federal Government injected a further $66.1 billion into the economy as businesses faced months of shutdowns.
What do these packages mean for you and your business and how will you benefit from it? We break it down for you.
Instant asset tax write-off
The instant asset write-off threshold has increased from $30,000 to $150,000.
Access to the tax write-off has also expanded to include businesses with an annual turnover of less than $500 million, up from $50 million, until June 30, 2020.
This means businesses can immediately write off assets of larger value.
As well, eligible businesses can deduct an extra 50 per cent of the asset cost in the year of purchase.
Cashflow boost
Small- to medium-size businesses with a turnover of less than $50 million, as well as not-for-profit organisations that employ staff between January 1, 2020 and June 30, 2020 will be eligible for a minimum payment of $20,000, or up to $100,000.
The payment is tax-free and issued automatically based on business activity statements or instalment activity statements from April 28. Employers will receive 100 per cent of their salary and wages withheld as an incentive to hold on to their workers.
From July 28, eligible businesses and organisations will also receive an extra payment equal to the total of all of the cash flow boost received in the previous period (up from 50 percent), with the minimum payment lifted from $2000 to $10,000, and the maximum payment from $25,000 to $50,000.
Business guarantee scheme
Under the scheme, the government will guarantee 50 per cent of new loans issued by eligible lenders to small and medium businesses.
The move complements announcements made by Australian banks to support small businesses with their existing loans.
JobKeeper payments
Businesses that are severely affected by the coronavirus slowdown can claim a fortnightly payment of $1500 for every eligible employee from March 30, 2020, for a maximum of six months.
The JobKeeper payments are meant to help businesses keep staff and restart after the pandemic threat has eased.
Apprentice wage subsidy
If you currently employ apprentices or trainees in your operation, this measure will be of great help.
Eligible small businesses can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to nine months from January 1 to September 30, 2020.
In the case a small business is not able to retain an apprentice, the subsidy will be available to any business that re-employs that apprentice.
Industry-specific assistance
The Morrison Government has also announced $1 billion to assist specific sectors that will be more heavily affected than others in the current climate, such as tourism, agriculture and education.
Relief for financially distressed businesses
In recognition that some businesses may fall into short-term financial difficulty, the Federal Government has temporarily increased the threshold at which creditors can demand payments, and also increased the time allowed for a company to respond to a demand to pay.
The assistance package will also allow directors to let a company trade while insolvent if the cause is due to the impact of coronavirus.
The Australian Tax Office says it is available to advise companies to work out the best solution.
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