1 April 2020

The government announced at the end of March a further massive subsidy for businesses to help them retain employees so they are ready to get back to business when the current coronavirus issues subside.  The new subsidy is called a JobKeeper payment.

The key things to note about this are:

1. The payment will be made to eligible employers for eligible employees. The payment will be  $1,500 per fortnight per employee for a period of six months.  It will be paid in respect of full time and part time employees who were employed as at 1 March 2020. Also, casual employees will be eligible if they have been with their employer on a regular basis for at least the pervious 12 months as at 1 March 2020.
2. The employees must continue to be engaged by the business. If an employee has been stood down or has had their employment terminated, they can still be eligible.  If an employee’s employment has been terminated, the employee must be re-engaged by the business.
3. Not all employers are eligible for the payment. A business will be eligible:
   1. If the business has a turnover of less than $1 billion and its turnover will be reduced by more than 30% relative to a comparable period a year ago, of at least one month; or
   2. If the business has a turnover of $1 billion or more and its turnover will be reduced by more than 50% relative to a comparable period a year ago, of at least one month; and
   3. If the business is not subject to the Major Bank Levy.
4. Employers must elect to receive the JobKeeper payment and provide supporting information. This can be done through the ATO website.
5. Employers must report the number of eligible employees employed by the business on a monthly basis.
6. Where an employee is accessing support through Services Australia because they have been stood down or had their hours reduced and the employer is eligible for the JobKeeper payment, the employee will need to advise Services Australia of their new income. An individual cannot receive both the JobKeeper and JobSeeker payments.
7. If an employee has more than one employer, only one JobKeeper payment will be made to one employer. The employer claiming the JobKeeper payment will usually be the one from whom the employee claims the tax-free threshold.

8. Superannuation Guarantee contributions (9.5%) need not be made on the JobKeeper payments. However, to the extent an employee is paid their normal salary or wages, the 9.5% contributions still need to be paid as normal.
9. If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
10. If an employee has been stood down, their employer must pay the employee, at a minimum, $1,500 per fortnight, before tax.
11. If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight.
12. With regard to the timing of payments, the payments will be made to an employer monthly in arrears by the ATO. The Prime Minister has pointed out that this should not delay employers from making payments to employees.  This is because the employer can make payments to their employees in the knowledge that the employer will receive the JobKeeper payment.  Of course, this assumes that the employer has the cashflow to make the payment in the first place!
13. The JobKeeper entitlement will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
14. For most businesses, the ATO will use the Single Touch Payroll system data to pre-populate the employee details for the business.
15. Employers must notify all eligible employees that they are receiving the JobKeeper payment.
16. The JobKeeper payment will be available for not-for-profit organisations.
17. The JobKeeper payment will also be available for the self-employed where they expect to suffer a 30% decline in turnover relative to a comparable prior period

1 April 2020

A legislative package has been pushed through Parliament which contains a number of bills that implement the government’s economic response to the spread of the coronavirus.

The relief package of legislation consisted of eight separate bills, which were all introduced to Parliament at the same time. The legislation has now passed both houses, with most applying from mid-March.

Instant asset write-off

The income tax law was amended to increase the cost threshold below which certain business entities can access an immediate deduction for the full cost of depreciating assets from $30,000 to $150,000. This change to the rules is only available from 12 March 2020 to 30 June 2020.  For an asset to be eligible for the instant asset write-off it must be first used for a taxable purpose in the period 12 March 2020 to 30 June 2020.  Alternatively, the asset must be installed and ready for use in that period.

In the Federal Budget announced on 2 April 2019, the Federal Government extended the instant asset write-off to businesses that have a turnover of between $10 million and $50 million.  This was in addition to small businesses that have a turnover of less than $10 million.

The instant asset write-off will now also apply to businesses that have an aggregated turnover of less than $500 million.  However, it will only apply to these businesses for the period 12 March 2020 to 30 June 2020.

This means that there will be two periods that you will need to consider in relation to purchases of assets in the year ending 30 June 2020.  The first period is from 1 July 2019 to 11 March 2020.  Eligible assets costing less than $30,000 can be written off completely in this period by businesses that have an aggregated turnover of less than $50 million.  From 12 March 2020 to 30 June 2020, eligible assets costing less than $150,000 (GST exclusive), can be written off by businesses that have an aggregated turnover of less than $500 million.

It should be noted that from 1 July 2020, the instant asset write-off threshold will revert to its original level of $1,000 and will only be applicable for businesses with an aggregated turnover of less than $10 million.  Accordingly, the coronavirus measures offer a strong incentive for most businesses to obtain a significant tax deduction that will no longer exist in the new financial year.

Accelerated depreciation

 This provides an incentive for businesses with aggregated turnovers of less than $500 million a year to invest in plant and equipment and other depreciating assets.

Specifically, the bill amends the income tax law to temporarily allow businesses with aggregated turnovers of less than $500 million in an income year to deduct capital allowances for depreciating assets at an accelerated rate of 50% of the cost of an asset.  This will be in addition to the normal depreciation that is claimed on the cost of the asset after deducting the 50% amount.

Generally, to be eligible to apply the accelerated rate of deduction, the depreciating asset must satisfy a number of conditions, including that the asset:

• is new and has not previously been held by another entity (other than as trading stock or for testing and trialling purposes);
• is an asset for which an entity has not claimed depreciation deductions, including under the instant asset write-off rules; and
• is first held, and first used or installed ready for use, for a taxable purpose between 12 March 2020 and 30 June 2021 (inclusive).

Boosting cash flow for employers

The cash flow boost provides for payments to support employers by boosting their cash flow. Another intention with this measure is to encourage the retention of employees through any follow-on downturn.

Undoubtedly, this part of the stimulus package is the most confusing.  Unfortunately, it also has the potential to be rorted by unscrupulous people.  That is why the measures contain an anti-avoidance provision.

Before explaining the detail, here are a number of statements about this part of the package that will assist with explaining certain aspects of what is known as the “cash flow boost”.

1. There are two rounds of cash flow boost.
2. The second cash flow boost is determined from the amount of the first cash flow boost.
3. The amount of the first cash flow boost is determined by the amount of withholdings from (broadly) wages or the minimum cash flow boost payment ($10,000), whichever is larger.
4. The maximum first cash flow boost amount is $50,000.
5. If eligible, the minimum “payment” to an entity will be $20,000 and the maximum will be $100,000 from the two cash flow boost payments.
6. The “payments” are actually credits given to the entity through the lodgement of activity statements. If the credits exceed the amount owing, a refund will be paid by the ATO to the entity within 14 days of the due date for lodgement of the activity statement.
7. The payments will operate in a different manner for monthly and quarterly lodgers of activity statements. The examples below will explain this.

Entities with an aggregated turnover under $50 million are generally eligible to receive the first cash flow boost for a period if:

• the entity makes a payment that is subject to withholding obligations (broadly, a payment of wages or salary or similar remuneration), whether or not any amount is actually withheld, in the period; and
• the period is one of the following:
  • the quarters ending in March 2020 or June 2020 for quarterly payers; and
  • the months of March 2020, April 2020, May 2020 or June 2020 for monthly payers; and
• if the entity:
• held an ABN on 12 March 2020; and
• either derived assessable income from carrying on a business in the 2018-19 income year or made one or more supplies for consideration in the course of an enterprise it carried on within Australia in tax periods commencing after 1 July 2018 and ending before 12 March 2020 and notice of the income or supplies was held by the Commissioner on or before 12 March 2020 or within such further time as the Commissioner allows (this notice appears to be either activity statements or an income tax return); and
• the entity (or an associate or agent of an entity) has not engaged in a scheme for the sole or dominant purpose of seeking to make the entity entitled to the first cash flow boost or increase the entitlement of the entity to the first cash flow boost.

There are some other conditions that we can help work through if you are an eligible business.

The timing of the cash flow boost needs to be noted as well. Quarterly lodgers will be eligible to receive the payment for the quarter ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.  To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300%) in the March 2020 activity statement.

The minimum payment [$10,000] will be applied to the entities’ first lodgement.

The additional payment [the second cash flow boost] will be applied to a limited number of activity statements.  Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020.  Each additional payment will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgements.  Each additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

The anti-avoidance provision

Be aware that the cash boost legislation contains an anti-avoidance provision.  This states: “Neither the entity nor any associate or agent of the entity has entered into or carried out a scheme or part of a scheme for the sole or dominant purpose of achieving any of the following:

1. making the entity entitled to the cash flow boost for the period;
2. increasing the amount of the cash flow boost to which the entity is entitled (disregarding this paragraph) for the period.

Many taxpayers however may wonder about those owners of businesses (through trusts or otherwise) that don’t pay themselves a wage.  Instead they take trust distributions, receive dividends or simply draw on the profits of the business. As legislated, the cash flow boost is only available in respect of (broadly) employment related withholdings.  There may be a strong risk of falling foul of the anti-avoidance provision if someone who has not been paid salary or wages for a long period is now put on wages.

The ATO is very aware that there are schemes being entered into to take advantage of this handout, and we will let clients know if an announcement is subsequently made in this regard.

Superannuation contributions

Employers should note that there are no changes to the requirement to make superannuation contributions in accordance with the Superannuation Guarantee law.

Superannuation Guarantee Charge Amnesty

The SGC amnesty period started on 6 March 2020 and will conclude at midnight on 7 September.  No change has been made to this period.  It should be remembered that payments after 7 September 2020 in relation to the SGC amnesty will not be tax deductible.

Stimulus payments to households

Also provided for is the payment of the first economic support payment of $750 to Social Security and Veterans’ income support recipients, Farm Household Allowance recipients, Family Tax Benefit recipients and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card.

There will also be a second economic support payment of $750 to the above people who receive a qualifying payment or hold a qualifying concession card on 10 July 2020. This second payment will not be paid to a person who receives, on 10 July 2020, the new Coronavirus supplement detailed below.

Additional supplement for income support recipients

The stimulus package also amends the Social Security legislation to provide financial assistance to people who are affected by the COVID-19 crisis. Australians can claim Jobseeker payment or Youth Allowance (other) if they are an Australian resident (or exempt from the residence requirements). If qualified, a person receives the current rate of Jobseeker payment or Youth Allowance (other) along with a fortnightly supplement of $550 or such other amount determined by legislation.

The supplement is also available to existing recipients of Jobseeker payment, Youth Allowance (other), Parenting Payment, Special Benefit, and the Farm Household Allowance. The Minister for Families and Social Services may extend the supplement to other social security payments by legislative instrument should a need arise.

The supplement is available for an initial six month period, although this may be extended depending on how the current crisis unfolds.

Recipients of Jobseeker payment or Youth Allowance (other) (which includes new and existing recipients) and Parenting Payment are also exempt from the assets test, liquid assets waiting period, ordinary waiting period, newly arrived resident’s waiting period and seasonal worker preclusion periods. The exemption from the newly arrived resident’s waiting period also applies to special benefit. The supplement and exemptions also apply to recipients of the Farm Household Allowance.

Note that the date of affect for these measures is 27 April.

Early release of superannuation

The stimulus legislation allows individuals affected by coronavirus to have up to $10,000 released from their superannuation or retirement savings account on compassionate grounds. Each person is permitted to have up to two releases – one for an application made during the 2019-20 financial year and another for an application made during the 2020-21 financial year. The amounts that are released are not subject to tax.

From mid-April eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 until 24 September 2020.

The legislation states that to apply for the determination for such early releases, the person must satisfy any one of the following requirements about their employment or business status.

At the time the person applies for the determination, they are:

• unemployed;
• eligible to receive a Jobseeker payment, Youth Allowance, Parenting Payment (which includes the single and partnered payments) or special benefit under the Social Security Act; or
• eligible to receive the Farm Household Allowance; or

On or after 1 January 2020 the person:

• was made redundant;
• their working hours were reduced by 20% or more; or
• if the person is a sole trader – their business was suspended or there was a reduction in their turnover of 20% or more.

Superannuation drawdowns

The bill amends the regulations to give effect to the Government’s announced measure to reduce the minimum payment amounts for account-based pensions (and for the equivalent annuity products) by half for the 2019-20 and 2020-21 financial years.

31 March 2020

The Federal Government has announced a further $130 billion to support the economy with the announcement of the JobKeeper Payment.

The JobKeeper Payment is to be paid to employers so they can pay their employees whether they have been stood down or continue to be engaged in the business.

Support Provided

• Employers can claim a fortnightly payment of $1,500 per employee which must be paid to the employee:

  • If the employee is paid less than $1,500 per fortnight the employer must top up the employee payment to $1,500 per fortnight

  • If the employee is paid greater than $1,500 per fortnight the employer will only be reimbursed $1,500 per fortnight

• The first payment is to be made through the ATO on 1 May 2020

• The payment will be back paid to cover employees’ wages from 30 March 2020

Eligibility

Employers

You will be able to show that your turnover will be reduced by more than 30 percent relative to a comparable period a year ago (of at least a month)

• The employee must have been employed as at 1 March 2020

Eligible Employees

• Must be a current employee – including those stood down or re-hired

• Were employed at 1 March 2020

• Are full-time, part-time, or a casual employee employed on a regular basis for longer than 12 months as at 1 March 2020

• Employees will not be required to go through Centrelink to continue to get support

Actions Required

• Register
  your interest in applying for the JobKeeper payment via https://www.ato.gov.au/Job-keeper-payment/

• Review
  and monitor turnover to ascertain if your turnover has decreased by 30% for a period

• Decide
  which of your employees including those already stood down are eligible for the JobKeeper Payment as they must receive a minimum $1,500 per fortnight before tax and payment must restart if they have been stood down.

• Assess
  the impact on cash flow as the wages will need to be paid in April before the first reimbursements will be paid from 1 May 2020

Businesses without employees

Businesses without employees (Self Employed) will also be able to claim the JobKeeper payment and they should also register their interest via ato.gov.au.

The information is provided on the basis of the information available at the time of writing and we will continue to review and advise on eligibility when the legislation is passed. Should you wish to discuss your eligibility for the support and the impact on your business please do not hesitate to contact us.

A link to the Government Fact Sheet providing more detail and examples is:
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_supporting_businesses_1.pdf

26 March 2020

As you would be aware, things have changed significantly around Australia with the recent announcements of enforced closing of some businesses and other restrictions imposed by the Government to stop the spread of COVID-19. These restrictions could be extended to a total lockdown at any time so we must all be prepared and take action as soon as possible.

It is going to be a very tough time for all of us business owners over the next 6 to 12 months and some of us will be affected more than others, but we want to reassure you that the team at i2 Advisory are
here and will be working overtime to ensure we are supporting all of our clients.

The key Government website that you need to be aware of is https://treasury.gov.au/coronavirus

It contains very useful Fact Sheets and information for business owners and individuals (perfect for your employees).

Below are 5 urgent things you need to be aware of:

1. Updated Government Stimulus Package – Our tax planning meeting with you this year will be VITAL!
2. Helping your employees that you have to stand down – Fact Sheets for you to use
3. Business continuity planning – immediate MUST DO actions
4. Get your Will and EPOA updated / set up NOW
5. Our ongoing support for you as your accountants and advisors

1. UPDATED GOVERNMENT STIMULUS PACKAGE – OUR TAX PLANNING MEETING WITH YOU THIS YEAR WILL BE VITAL!

The Australian Government has just updated its economic stimulus package,which now totals $189 billion. The package has been marketed as a measure to provide timely support to affected workers, businesses and the broader community.

The updated key tax and stimulus measures include:

Cashflow Assistance for Businesses

• Tax-free payments of up to $100,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) and not for profit organisations based on their PAYG withholding obligations. This is not a cash payment, but it is a credit in the activity statement system equal to 100% of the PAYG amounts withheld from salary and wages paid to employees.
• These payments will only be available to active eligible employers established prior to 12 March 2020, and you simply need to have employees for whom you withhold tax on wage payments.
• First payment of up to $50,000 – Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020 and June 2020. Businesses that lodge on a monthly basis will be eligible for the credit for the March 2020, April 2020, May 2020 and June 2020 lodgements.
• Second payment of up to $50,000 – To qualify for this additional payment, the business must continue to be active. Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the
  quarters ending June 2020 and September 2020. Businesses that lodge on a monthly basis will be eligible for the credit for the June 2020, July 2020, August 2020 and September 2020 lodgements.
• If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $10,000 will be made upon lodgement of the March 2020 activity statement. A second minimum payment of $10,000 will be made, split between the June 2020 and September 2020 quarters.
• Wage subsidies to support the retention of apprentices and trainees – employers with less than 20 full-time employees may be entitled to apply for Government funded wage subsidies amounting to 50% of an apprentice’s or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. The maximum subsidy for each apprentice/trainee is $21,000.

Business Investment

• From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000 (for businesses with an aggregated turnover of less than $500 million) until 30 June 2020.
• A time-limited 15-month investment incentive (through to 30 June 2021)
  has also been introduced, which will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, which will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed
  ready for use, by 30 June 2021.

Temporary Relief for Financially Distressed Businesses

• These measures are designed to give a safety net for businesses to ensure that when this crisis has passed, they can resume normal business operations. It includes lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of
  the business. They include:
  • A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
  • A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition.
  • Temporary relief for directors from any personal liability for trading while insolvent.

Business Lending Guarantee

• The Government will provide a guarantee of 50% to Small and Medium Enterprise lenders for new unsecured 3 year loans of up to $250,000 per borrower to be used for working capital. These loans will be up to three years, with an initial 6 month repayment holiday.
• The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
• Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.
• The scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

Individual Assistance

• Tax-free payments of $750 to social security, veteran and other income support recipients and eligible concession card holders. It is estimated that around half of those who will benefit will be pensioners. These payments will automatically be made from 31 March 2020.

We can help

We are trying to contact all clients to assist you with opportunities to restructure how you pay yourself so that you can receive the maximum cashflow assistance amounts from the Government.

Contact us TODAY if you would like to discuss the options available to ensure you receive your maximum Cashflow assistance from the Government.

2. HELPING YOUR EMPLOYEES THAT YOU HAVE TO STAND DOWN

With the recent requirements that many businesses are to be temporarily closed, you may have to stand down many of your employees from their employment.

The good news is that the Government is providing support for individuals to assist them in the next 6 months.

The Government has expanded the access to the Jobseeker Payment and the Youth Allowance Payment so that the following people affected by the Coronavirus can receive them, commencing 27 April 2020:

• permanent employees who are stood down or lose their employment
• sole traders
• self employed
• casual workers

Please refer to the fact sheets below for an excellent summary of what individuals are entitled to. We recommend providing these to your employees.

Income support for Individuals –

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf

Payments to support households –

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

Temporary early release of Superannuation –

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

3. BUSINESS CONTINUITY PLANNING – IMMEDIATE MUST DO ACTIONS

You need to quickly decide whether your business can continue to trade or if it needs to temporarily close or reduce its operations.

During this period cash is king therefore you should be forecasting future cash flows and at the same time look at how you can preserve cash resources:

• Delay tax payments to the ATO – it is vital that you keep lodging your Business Activity Statements (BAS’s) by the due dates and negotiate with the ATO. The ATO is implementing a series of relief options to assist those businesses impacted by COVID-19, this relief will not be automatic so the ATO will need to be contacted.
• Contact your landlord and request an immediate reduction in your rent
• Reduce costs where possible
• Contact your bank asap to:
  • Arrange for additional bank funding/ lines of credit that can be approved now for future use
  • Request deferrals of loan and lease repayments
  • Apply for the new government guaranteed small business loans of up to $250,000
• Review your staffing requirements, everyone is suffering and needs to tighten up in the short term, so we all have to work together:
  • Do you have to reduce working hours of some employees
  • Decide if you should offer unpaid leave on a roster basis
  • Look at the option of a stand down of their employment for the short term

4. GET YOUR WILL AND EPOA UPDATED / SET UP NOW

If you have to self-quarantine or are admitted to hospital, if you don’t have an Enduring Power of Attorney (EPOA) then no-one else can make important business or financial decisions on your behalf.

As a business owner, it is 100% essential that you have an up to date EPOA and Will, and that your family know where these are stored.

5. OUR ONGOING SUPPORT

We are currently operating split shifts with the majority of our team working from their homes.

We want to reassure you that we have 100% capacity to continue helping you and your business.

Please continue to phone our office number 08 8132 6400 or the mobile number of your Accountant you’ve been working with for assistance. Also, you can always email us for instant support at admin@nulli2advisory.com.au

Our team at i2 Advisory is here to help you. Please do not hesitate to contact us should you require any assistance!

17 March 2020

Introduction

“Most people aim at nothing – and they hit it with alarming accuracy.”

The i2 Advisory team are here during these difficult times to support and provide positivity to you and your business!

As a business owner, there’s one key thing you need to totally focus on now – keeping your business alive during these difficult times. It’s not all doom and gloom either – withstanding the tough times sets a business up to be a fast turning cash flow business when everything bounces back in a positive way in the future.

Remember that while cash flow is under control then so is your business. Downturns can be scary in the moment, usually because there is no plan in place for your business and the world around you appears to be panicking.

If you take actionable appropriate steps to create a Continuity Plan, then in reality a downturn is just a stop gap to the next upturn, where your business will be cash flow fit and ready to take full advantage.

You will need to build a cash “war chest” which will let you keep trading through the coming difficult months.

There are 7 key areas you need to consider immediately:

1. Cash – Preserve cash at all costs. You must immediately start building a cash “war chest” for your business to survive.
2. Protection – Update and upgrade your Asset Protection IMMEDIATELY. It’s very important to review strategies to protect the equity in your family home and other assets in personal names. It’s also vital for you to have an up to date
Enduring Power of Attorney (EPOA) and Will, and
to know where the original signed copies of these are located.
3. Banks and Funding – You should contact your bank immediately to arrange additional lines of credit if possible. Alternative funding sources should also be immediately considered. The time to act is NOW, not in 2 weeks’ time when the banks will be overwhelmed by other bank loan applications and requests.
4. Management Team – Work through the COVID19 Continuity Plan with your Management Team, then quickly communicate appropriate decisions to your entire team.
5. Employees – You need to openly discuss reduced working hours with your employees to save cash (if this does save cash) and working from home arrangements. Employees will be scared, so they need to be reassured by you and they need to be given an understanding of your plan to keep the business alive.
6. Customers & Suppliers – Great communication is needed to so that customers have peace of mind that it’s “business as usual” where possible, and so that you can rely on your suppliers.
7. Mental Health – This could be one of the most stressful times ever for you and your employees. We can provide links to assistance for you to help you and your team through this crisis.

To assist you, included in this Plan are the following checklists for meetings and emails for you to use in your business.

We recommend that you use them in the following order:

1. Business Owner Decisions – Discussions with Accountant / Adviser team
2. COVID-19 Continuity Plan
3. E-mail to Employees
4. Agenda for Team Meeting with all Employees

BUSINESS OWNER DECISIONS

Discussions with your Accountant /Adviser Team

To maintain your cash “war chest”, you may need to consider options that you haven’t consider before. Right now, above all else, you need to do anything that is needed to keep your business alive.

COVID-19 CONTINUITY PLAN

Your Cash Flow

You and your Management Team will need to remain calm as you lead your employees through this crisis. This will allow for decisive and clear decisions to be made without any undue disruptions. If you are calm, you will have a competitive advantage over most businesses.

Remaining positive and being seen to be positive is the best way through any crisis.

Your Team

Your Customers / Clients

Your Suppliers

TEAM MEETING AGENDA

All Employees

13 March 2020 

The Federal Government has announced a stimulus package of $17.6 billion to support the economy. The package is designed to boost the economy with a combination of cash payments to individuals who qualify for government benefits and benefits to business.

These measures were announced yesterday and therefore they have no supporting legislation which means the below could be subject to change and clarification.  However the Opposition have announced
they will support these measures.

From the current information available we advise the following:

Business incentives

Cash payments to small and medium business

• Employers with turnover less than $50 million that employ staff will receive a tax-free, cash incentive of between $2,000 and $25,000

• The cash payment is based upon 50% of the tax withheld on their employees’ salary and wages between 1 January 2020 and 30 June 2020 up to a maximum of $25,000.

• Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax

• The payments will be based on Business Activity Statements or Instalment Activity Statements lodged from 28 April with the refunds paid within 14 days with no action required on employers behalf

Instant asset write off

• Threshold for assets which can be written off immediately has been raised from $30,000 to $150,000

• Eligibility for the write off has increased from businesses with turnover up to $50 million to businesses with turnover up to $500 million

• This will be available for assets purchased from 12 March 2020 until 30 June 2020

• These assets must be installed ready for use before 30 June 2020 so you will need to act quickly especially where assets have a delivery lead time

Investment incentive – accelerated depreciation

• Businesses will have access to a 15 month investment incentive through accelerated depreciation deductions

• Businesses with turnover less than $500 million will be able to deduct an additional 50% of the cost of the asset in the year it’s purchased excluding those assets eligible for the instant asset write off

• This will be available until 30 June 2021

Payments for apprentices

• Eligible businesses will receive a wage subsidy of up to $7,000 per quarter to retain existing apprentices and trainees for 9 months (from 1 January 2020 – 30 September 2020)

• Businesses will be eligible where they have fewer than 20 full time workers

• Businesses can register from 2 April 2020 for this scheme

Tax payment relief for businesses affected by COVID-19

Businesses impacted by COVID-19 will be supported by the ATO on a case by case basis with options including:

• Deferral of Business Activity Statement payments by up to four months

• Allow businesses to lodge BAS’s on a monthly cycle to gain access to GST credits

• Remission of interest and penalties incurred after 23 January 2020

• Working with affected businesses to help them pay tax liabilities by allowing them to enter into low interest payment plans

Individual incentives

• $750 cash payments to those who qualify for government benefits including Family Tax Benefits, the Aged Pension, Newstart Allowance and the Carer’s Allowance

• Payments should start from 31 March 2020

The Government is hoping that the above incentives will be enough to keep the Australian economy going through this difficult time.

Should you have any questions in relation to the above please do not hesitate to contact us.