Government today has announced the raft of measures to form the backbone of their economic response to the Coronavirus, now declared a pandemic by the World Health organisation.
While details of the package remain thin, there are a number of key announcements for business which may help to soften the blow of turbulent economic times ahead.
Asset Write-off and Investment
The Instant Asset write-off, recently broadened to apply to companies under $50m turnover who purchase an asset under $30,000, is being temporarily super-sized. Until 30 June 2020, any business with aggregated turnover under $500m will be able to instantly write-off an asset under $150,000 instead of depreciating them.
A separate measure also allows the same companies access to a 50% instant write-off for assets above the $150,000 threshold. This instant-write-off is a form of accelerated depreciation – The remaining 50% is depreciated as normal (including any standard depreciation in the same year as the accelerated depreciation). This measure extends through to 30 June 2021.
PAYG Withholding Discount
Eligible business with aggregated annual turnover under $50m which employ will receive a credit based on the PAYG Withholding for each period until 30 June 2020. This credit will be 50% of the amount withheld, with a minimum of $2,000 (even if they did not withhold during the period) to a maximum of $25,000.
This is delivered as a credit on the Activity Statement and will therefore reduce payables but not result in cash refunds of PAYG Withholding (Although it may result in larger GST refunds, if applicable). The Maximum amount of $25,000 is a cap across the entire period until 30 June, and so businesses with significant withholding are likely to hit this cap quickly and will not receive further benefit.
Apprentices and Trainee Retention
Small business employing fewer than 20 full-time employees who retain an apprentice or trainee will be eligible for a reimbursement of $7,000 per quarter for the three quarters to 30 September 2020. To be eligible, the apprentice or trainee must have been in training as at 1 March 2020, and employers must claim the payment via an Australian Apprenticeship Support Network Provider.
Additionally, a business of any size which re-engages an eligible out-of-trade apprentice or trainee will also be eligible for the reimbursement.
For further information, please contact Noé Vicca at firstname.lastname@example.org
Date of Issue: 13 March 2020 Author: Noé Vicca
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