Whilst the below message is giving you reassurance for business as usual from our end, we have not forgotten the human aspect of the current circumstances and the different level of emotional impact it is having on everyone. To that end, we are all in this together and if you need to talk to myself or anyone at Crofts, we are only a phone call away.
Crofts Chartered Accountants wishes to inform our clients about its readiness to continue to provide services in light of the evolving situation around COVID-19. Internal processes are now in place, as we are committed to providing a safe and healthy working environment for all our employees and are proactively working with our clients to identify potential risks of any nature and how to best mitigate them.
We are continually communicating with our staff and will continue to update them on changes as issued by the Australian Government Department of Health over the coming weeks. We appreciate that our staff are exercising appropriate and proactive caution around hygiene practices and limiting their domestic and international travel.
In the event of our office being required to close, we have a contingency plan in place. Rather than hosting physical meetings, we are replacing them with other digital modes of communications, such as video and phone calls, in order to prevent any possible COVID-19 transmissions. All our staff have been issued with laptops for remote working to ensure your complete business continuity. Since last week some of our staff have already put this into practice, where they have proactively stayed home and worked from home when they are experiencing any symptoms of a cold or a flu. Currently we believe disruptions to our services will be minimal.
Careful consideration has gone into the decisions we have made to date and detailed risk assessments are in place. If required, we have further measures to update and support current working employees, however, we are monitoring the situation daily and following government advice on the matter.
We will keep you will informed, and will notify you of any changes in our daily operations should they arise, as per Government and Health Department recommendations. It is crucial we work together during this unusual time, so thank you for your ongoing support.
Coronavirus Stimulus Package
The government's economic response to the coronavirus (COVID-19) outbreak contains temporary tax measures to support business investment, including increasing and extending the instant asset write-off and accelerating depreciation deductions, as well as the ATO providing administrative relief.
The measures form part of the government's economic response totalling $17.6b (or 0.9% of annual GDP) to address four key areas including:
Cash flow assistance
Tax measures to support business investment
- cash flow assistance for employers, including:
- boosting cash flow for employers: providing employers with an aggregated annual turnover below $50m a tax-free payment equal to 50% of Pay As You Go (PAYG) amounts withheld, with a minimum payment of $2,000 and a cap of $25,000 to be delivered as a credit upon lodgment of the employer's activity statements with the ATO from 28 April 2020. Eligible businesses that pay salary and wages will receive a $2,000 minimum payment even if they are not required to withhold tax. The ATO will refund monies if this measure places the business in a refund position, and
- apprentice and trainee wage subsidy: providing eligible small businesses a wage subsidy of 50% of an apprentice or trainee's wage from 1 January to 30 September 2020, capped at $21,000
- a one-off stimulus payment of $750 to social security, veteran and other income support recipients and eligible concession card holders, and
- assistance for severely affected regions and communities (including ATO administrative relief discussed below).
The government announced the following two temporary measures to support business investment.
The Government will move quickly to implement this package. To that end, a package of Bills will be introduced into Parliament in the final Autumn sitting week in March 2020 for Parliament's urgent consideration and passage.
- Increasing the instant asset write-off: the instant asset write-off threshold is increased from $30,000 to $150,000 and access is expanded to include businesses with an aggregated annual turnover below $500m (up from $50m). This measure applies from 12 March 2020 to 30 June 2020 to new or second-hand assets first used, or installed to be ready for use in this timeframe.
- A 15-month investment incentive to accelerate depreciation deductions : businesses with an aggregated turnover below $500m will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation (or capital allowance) rules applying to the balance of the asset's cost. The measure applies from 12 March 2020 to 30 June 2021 to new assets that can be depreciated under Div 40 of ITAA 1997 (ie plant, equipment and specified intangible assets, such as patents). It does not apply to second-hand Div 40 assets, or buildings and other capital works depreciable under Div 43 of ITAA 1997.
Following passage of the Bills through Parliament, the Government will then move to immediately make, and register, any supporting instruments.
ATO administrative relief
The ATO will provide administrative relief for some tax obligations for people affected by the coronavirus outbreak, on a case-by-case basis.
Businesses impacted by the coronavirus should contact the ATO to discuss relief options. Options include:
- deferring by up to four months the payment date of amounts due through the business activity statements (BAS, including PAYG instalments), income tax assessments, FBT assessments and excise
- allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
- allowing businesses to vary PAYG instalment amounts to zero for the Mar 2020 quarter; businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and
- working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
Employers will still need to meet their ongoing super guarantee obligations for their employees.
Sources: Australian government's Economic Response to the Coronavirus , Prime Minister and Treasurer's joint media release, ATO media release and website, 12 March 2020.
In addition the NSW government has announced that it will waive payroll tax for businesses with payrolls up to $10 million for three months. The next round of payroll tax cuts has also been brought forward to raise the threshold limit to $1 million for the 2020-21 financial year.
We will keep you well informed and will notify you of any changes. Keep well and remember, we are only a phone call away.