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Palfreyman Chartered Accountant, Business Services, Tax, Specialist Services, Quorrobolong NSW 2325

Supporting Your Business Through COVID-19

We understand that times are difficult for small businesses at present. To help you access financial and other support incentives that can help your business move through this time, we have compiled a list below. We will endeavour to keep this page updated as new announcements are made, and strongly encourage you to contact our office on (02) 4990 3775 or by emailing us at enquiries@palfreyman.com.au if you have any questions. Given how quickly these initiatives are changing, we apologise if any information is out of date or if resources have been removed. You might also like to read our blogs on how to manage your employer responsibilities and maintain business continuity during this time .

Government Incentives:

Sole Traders or Businesses with No Employees:

  • The JobKeeper Payment subsidy is paid to eligible businesses of $1,500 per fortnight for eligible employees and some categories of business owners. Eligibility is a complex matter, and we strongly recommend you discuss this with your accountants. Alternatively, our team is only a phone call away if you need assistance. Generally speaking, eligibility is based upon if your business turnover has decreased by more than 30% to the same period last year. If you have had substantial growth prior to COVID-19 but your business turnover has decreased by more than 30% to earlier periods, you may still eligibleRegistrations are open now and you should register as soon as possible if you are eligible. 
  • The Instant Asset Write-off threshold has been increased from $30k to $150k and now includes all businesses with an aggregated annual turnover of less than $500 million (up from $50 million). This increase applies from 12 March 2020 until 30 June 2020 and can be used for new or second-hand assets first used, or installed and ready for use, within this timeframe. Importantly, the IAWO is due to revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.
  • By accelerating depreciation deductions, the Government is committed to backing business investments to improve economic growth from 12 March 2020 until 30 June 2021. This scheme will provide businesses with a turnover of less than $500 million the ability to deduct 50% of the cost of an eligible asset[1] on installation, with existing depreciation rules applying to the balance of the asset cost. 

You can find out more about these business investment support packages here.

Businesses with Employees:

  • The JobKeeper Payment subsidy is paid to eligible businesses of $1,500 per fortnight for eligible employees and some categories of business owners. Eligibility is a complex matter, and we strongly recommend you discuss this with your accountants. Alternatively, our team is only a phone call away if you need assistance. Generally speaking, eligibility is based upon if your business turnover has decreased by more than 30% to the same period last year. If you have had substantial growth prior to COVID-19 but your business turnover has decreased by more than 30% to earlier periods, you may still eligibleRegistrations are open now and you should register as soon as possible if you are eligible. 
  • The NSW Small Business Support Grant is a $10,000 grant for eligible small businesses affected by COVID-19. Your business may be eligible if it:
    • Operates in an industry highly impacted by the Public Health Order 2020 issued 30 March and has suffered a decline in turnover of 75%; 
    • Has between 1 and 19 employees, and an annual payroll below $900,000; 
    • Has an annual turnover of more than $75,000; 
    • Was registered with an ABN at 1 March 2020; 
    • Has an Australian Business Number and employs staff in NSW at 1 March 2020; and 
    • Has unavoidable fixed costs not otherwise the subject of other NSW and Commonwealth Government financial assistance measures.

    Eligible industries would include retail, accommodation, food services, rental, administrative and support services, and arts and recreational services (such as fitness centres). 

    Applications can be made via the Service NSW website from 17 April. 

  • Boosting Cash Flow for Employers: this is a credit or cash payment calculated using your Business Activity Statements. This amount is generally calculated as 100% of PAYG withheld from employees from March 2020 to September 2020, with a minimum credit of $10,000 for the March quarter. Employer registration conditions apply to this credit. If money is owed to the ATO for the current BAS, this support package credit is likely to be used to reduce that ATO debt as a credit, not a cash refund. This only applies to the current BAS and not previous. For example, if you still owe for the December quarter (or earlier), any left over credit will not be withheld against this. This payment will occur when you lodge your activity statements. More information can be found here.
  • If you have apprentices or trainees, you might be eligible for a wage subsidy of 50% of their wage paid from 1 January 2020 to 30 September 2020, up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). Wage subsidy of 50% of wages paid up to a maximum of $21,000 per apprentice for the 9 months from 1 January 2020 to 30 September 2020. Please note that your employee must have a Training Contract that is formally approved by the STA and meet other conditions for this subsidy to apply. If you are receiving JobKeeper payments for this employee, they will not be eligible for this apprenticeship subsidy.
  • For your casual employees who cannot work due to being sick, needing to self isolate, or their income is otherwise affected by COVID-19 and who do not qualify for the JobKeeper Payment, you should advise them of income support payments that might be available for them. You can find out more in the General Support Measures section below.

General Support Measures:

  • You might be able to access some relief for some tax obligations for businesses if you are affected by the outbreak, but this is decided by the ATO on a case-by-case basis. You will need to contact the ATO's Emergency Support Infoline for businesses – 1800 806 218 – to request this help.
  • With businesses closing and many employees losing their jobs, the government has announced a number of supplements to income support payments. If you have lost your job or are a sole trader/business owner unable to access the JobKeeper payments, you may be entitled to a new coronavirus supplement under expanded access to the JobSeeker Payment, formerly known as Newstart. This supplement is to be paid for up to 6 months, with a maximum payment of $550 per fortnight. This payment is in addition to any normal Centrelink entitlement, including the usual JobSeeker Payment. You can phone 180 22 66 or click here for more information.
  • ATO Assistance with Tax Debt: To help you keep your business afloat, the ATO has implemented a series of relief options to assist those impacted by COVID-19. These are not automatically applied, and you (or your accounting team on your behalf) will need to contact the ATO to make any of the following requests for assistance. 
    • Businesses can call the ATO's Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances. 
    • Individuals and businesses can request a deferral of some payments (by up to 4 months) and vary PAYG instalments. 
    • Businesses (under $20 million turnover) can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months. 
    • Quarterly payers can vary their PAYG instalments for the March 2020 quarter, and claim a refund of instalments paid for the September and December 2019 quarters. 

    You can find out more information here.

  • Early Access to Super: The Government has announced that certain individuals can access tax-free payments from their Super Fund from mid-April. Applications will be available via your MyGov account for up to $10,000 prior to 30/06/2020, with a further $10,000 on or after 01/07/2020. These payments will not affect your entitlement to Centrelink or Veterans Affairs payment eligibility. Eligible individuals include those who are:

    • unemployed, or
    • eligible to receive a Job Seeker Payment (previously known as Newstart Allowance), youth allowance for job seekers, parenting payment, special benefit or Farm Household Allowance, or
    • on or after 1 January 2020
      • were made redundant, or
      • had their working hours reduced by 20% or more, or
      • for sole traders, their business was suspended or there was a reduction in their turnover of 20% or more.

You can find out more here.

  • Minimum Super Pension Drawdown Rates: With the stock market falls affecting many super funds, the ATO have announced a 50% deduction in the minimum pensions for 2019-20 and 2020-21 as follows:

Age                        Previous Minimum Pension         New Minimum Pension
Under 65                               4%                                                   2%
65-74                                     5%                                                  2.5%
75-79                                     6%                                                   3%
80-84                                     7%                                                  3.5%
85-89                                     9%                                                  4.5%
90-94                                     11%                                                5.5%
95 or more                             14%                                                 7%

You can find out more here.

  • Reduction in Social Security Deeming Rates: With the reduction in interest rates, the government has now reduced the deeming rates for social security pensions to 0.25% (lower rate) and 2.25% (upper rate). While not a huge reduction, this will help to increase the pensions received by people with investment income. More information can be found here.

Other Incentives:

  • A small business relief package from Australia's banks has been announced, with small businesses being affected by COVID-19 being able to defer loan repayments for six months. You can read more here
  • A number of accounting software have released pricing and support guidelines targeted at supporting businesses through this time. For example, MYOB have addressed your immediate cash flow concerns by immediately suspending any price rises until further notice, reviewing payment terms to provide flexibility to industries hit hardest, implemented a dedicated hardship application support team and helping you access government grant information. We encourage you to investigate what options your software has, and if you reach a point of concern, consider the benefits of completing a financial hardship application.

It takes a lot to lead a business through times like these. While you might be tempted to shut your eyes and just keep on going, we promise you this is not viable long term. Instead, take time out of your day (every day!) to listen to yourself and make sure your mental health is okay. We love this fact sheet, but in general, we personally like to keep a routine that includes exercise (even just going for a quick walk outside or playing with the dogs), embracing your creative flare and giving a friend or family member a call.  
 
In times like these it is really important to talk to a professional when you feel overwhelmed. This might be a counsellor, social worker or another trusted person in your community, but if you are having trouble getting out of the house, LifeLine (13 11 14), BeyondBlue (1300 22 4636) and Kids Help Line (1800 55 1800) are available to you 24/7. Some even have a text line, such as LifeLine Text (0477 13 11 14) available 6pm to Midnight every day. 



[1] Eligible assets are those able to be depreciated under Division 40 of the Income Tax Assessment Act 1997, that were acquired after the announcement of this scheme and first used or installed by 30 June 2021. Importantly, this does not apply to second-hand Division 40 assets, or buildings and other capital works usually depreciated under Division 43.