As the Government has introduced new directives regarding COVID-19, we wanted to provide you with an update on Crofts and assure you that we are ever more committed to looking after you during the unfamiliar and challenging times ahead.
As of today, the majority of our staff will be working from home, with the exception of a very small number of key staff to remain in the office. We are confident that disruptions to our services will be minimal.
Our main phone line will be diverted to a single external line. We ask for your patience at this time and if there is a busy signal please call again soon after. We will ensure that the team member you are calling for will call you back promptly. Alternatively, feel free to send one of our team members an email to get in contact with you. If you are unsure of their email address please send the email on to firstname.lastname@example.org
In addition, as per our earlier communications, as of 24 March 2020, the government has legislated a number of measures to assist businesses and others during this period. The following is a broad summary of the key aspects of the Federal Government's stimulus package. We will aim to keep you informed on how these measures will affect you and your business. If you have any queries on your entitlement to these measures and how these measures are to operate practically, or require any more information please don't hesitate to contact us.
MEASURES FOR BUSINESSES
Cash Flow Boost Payments
Businesses that employ staff, have had an ABN from prior to 12 March 2020, and have an aggregated annual turnover of less than $50 million will receive a tax-free payment of up to $100,000. These payments will be staged over a period covering the March 2020 to September 2020 activity statement lodgements and will be calculated based on the PAYG withholding obligations of the business as declared on these activity statements. Provided the business meets all other eligibility criteria and has paid salaries, wages or directors fees (or any other such amounts) on any of the relevant activity statements from March 2020 to June 2020, the business will be entitled to a minimum total payment of $20,000, increasing based upon the PAYGW obligations declared.
It should be noted that eligibility for the above payments is subject to a specific integrity rule that is designed to stamp out artificial or contrived arrangements that are implemented to obtain access to this measure.
Wages Subsidies for Apprentices and Trainees
Employers with less than 20 full-time employees will be entitled to a wage subsidy of 50% of an apprentice or trainee's wage from 1 January to 30 September 2020, capped at $21,000 per apprentice.
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.
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 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. Where a small business entity is using the pooling methods available under the simplified depreciation rules, the entity may deduct an amount equal to 57.5% of the asset cost in the year it is allocated to the pool (rather than 15%).
State Payroll Tax Concessions
For employers who lodge and pay monthly payroll tax and whose total Australian wages will be no more than $10 million for the current financial year, no payment is required for the months of March 2020, April 2020 or May 2020. When lodging their annual reconciliation, employers will still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax that they would have had to pay for the 2020 financial year. Also, the payroll tax threshold will be increased to $1 million from 1 July 2020.
Relief can be applied for to defer due dates for payroll tax payments to 3 August 2020.
For employers whose total Victorian wages are less than $3 million for the 2020 financial year, a full payroll tax refund will be available for the 2020 financial year. Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year. Payment of the payroll tax for the first quarter of the 2021 financial year may also be deferred to January 2021 for employers that meet this wage limit.
Employers paying less than $7.5 million in total Australian wages that are effected by COVID-19 can apply to defer payments for 2020 payroll tax to 21 July 2020. A grant of $17,500 will be automatically paid to employers (only one per group) in July 2020 if annual Australian wages are between $1 million and $4 million. Also, the payroll tax threshold will be increased to $1 million from 1 July 2020.
Employers in the hospitality industry can apply to have their payroll tax liabilities for the months from April 2020 to September 2020 waived. Employers with less than $10 million total Australian wages can also apply to defer their 2020-2021 payroll tax payments to 1 July 2022 interest free.
For employers in the hospitality, tourism and seafood industries, no payment is required for the months of March 2020, April 2020 or May 2020. When lodging their annual reconciliation, employers will receive a waiver of payroll tax for the relevant wages paid in these months and in June 2020. Other employers whose total Australian wages will be no more than $5 million for the current financial year may also apply for this concession if they are effected by COVID-19. There may also be a rebate available for employers paying payroll tax who employ new youth employees from 1 April 2020.
No payroll tax measures have been announced to date.
No payroll tax measures have been announced to date.
MEASURES FOR INDIVIDUALS
Early Release of Super
Individuals that are unemployed, receive certain benefits, or have been made redundant or suffered a large reduction in working hours on or after 1 January 2020 may be entitled to release up to $10,000 of their superannuation before 1 July 2020 and a further $10,000 from 1 July 2020 until 24 September 2020.
Income Supplement and Assistance payments
- A new Coronavirus supplement of $550 per fortnight will be paid for a 6 month period from 27 April 2020 to individuals who are currently eligible for certain income support payments.
- For the period that the Coronavirus supplement is paid, the Government will also expand access to certain income support payments.
- The Government will be providing two separate $750 tax-free payments (referred to as economic support payments) to social security, veteran and other income support recipients and to eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020, however, the second payment will not be made to anyone in receipt of the Coronavirus Supplement noted above.
Temporary Reduction of Minimum Superannuation Drawdown Rates
Minimum pension drawdowns will be reduced by 50% for the 2020 & the 2021 financial years. This measure allows members receiving a pension to remain in a tax free pension environment whilst maintaining a higher balance. Please see the below table for what rate will be applied to your pension member balance on 1 July to calculate the minimum pension drawdown for the 2020 & 2021 financial years. No changes have been made to the maximum pension drawdowns.
|Age at 1 July
|New Minimum Pension %
for 2020FY and 2021FY
|95 or older
The Federal Budget has been delayed from May 2020 to October 2020.
The federal government is guaranteeing 50% of all new eligible loans for businesses with a turnover up to $50 million. These guarantees will be provided for loans that can be up to $250,000 over a three year term with no repayments required in the first six months. Access to this credit will be through the banks and financial institutions and subject to normal credit checks.
Bankruptcy and Director protection
The threshold for creditors pursuing insolvency proceedings has temporarily increased to $20,000 for 6 months. Companies will also have 6 months to respond. Directors will also be temporarily relieved of their duty to prevent a company from incurring any debts while trading insolvent for a period of 6 months.
ATO Lodgement and Payment Assistance
The ATO has announced that a flexible approach will be adopted in the way it handles taxpayers' affairs over the coming months. It's possible to obtain deferrals of your BAS, Income Tax and FBT obligations on application to the ATO. Please contact us to assist with these requests.
Remember, we are here to help and please don't hesitate to contact me or any of our team members if you have any questions or concerns.