Given the latest updates, here are some Coronavirus tips to help your business cope during this difficult time.
As a business owner, there may be some challenging times ahead including:
- Team members being absent from your workplace
- Product supply issues
- Demand for your services or products reducing over the short term
- A reduction in cash flow
During this time, there are 3 urgent things you need to be aware of:
- The new Government Stimulus Package (We’ll explore this in depth when you organise a Tax Planning Meeting with us)
- Get your Will and EPOA updated / set up NOW
- Business Continuity Planning
To Prepare You in Advance…
There may be some concepts and sentences in this email that go straight over your head.
That’s ok. Don’t stress!
Some of these coronavirus tips went straight over my head too (I’m a marketer, not a tax expert).
But, that’s why we have our amazing team of accountants here at Knox Tax.
Not only do they understand these complicated policies and tax changes, but they are able to explain them to us in ways we can understand. This is how we ensure that you’re looked after and in good hands.
1. Government Stimulus Package
The Australian Government recently released a $17.6 billion economic stimulus package.
If you have not heard of this, it’s simply a package that the government has created to support and protect the economy by maintaining confidence, supporting investment and keeping people in their jobs.
Here are the key things you need to know:
i) Business Investment
- From Thursday 12 March 2020, the instant asset write-off threshold will be 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) 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.
ii) Cash flow Assistance
- Tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations.
- This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
- 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. This will commence from 1 January 2020 to 30 September 2020.
- The maximum subsidy for each apprentice/trainee is $21,000.
Key notes relating to Cash flow Assistance:
- 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.
- If a business pays salary and wages to employees but is not required to withhold any tax, then a minimum payment of $2,000 will still be made. The minimum $2,000 payment will be applied to the first activity statement lodgement.
iii) 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 commence to be automatically made from 31 March 2020.
2. Business Continuity Planning
As a business owner, now is the time to plan.
These coronavirus tips can help your business to survive and cope during this difficult time.
As we mentioned above, you may start to experience employees being away from your workplace, shortages of supply, reduction in sales or even the possibility of your workplace being closed.
Over the next few weeks, we are offering business owners the chance to call us to chat about:
- Employees working from home, and workplace obligations
- How to pay your bills in the short term if your sales start to dry up
- The best ways to communicate in a reassuring way with your clients and customers
- How to keep things moving with your business
We’re not suggesting in any way that we have all the answers BUT it is important for us to work with you.
We can help you plan for what will happen in the weeks and months ahead, and share more coronavirus tips to help you.
We’ll be sending you more detail on our Upcoming Business Continuity Planning Meetings soon!
3. Get Your EPOA Updated / Set Up
As mentioned in our previous email, ensure you get your Enduring Power of Attorney (EPOA) and Will set up / updated if you have not already done so.
This will allow a dedicated person to make important business and financial decisions on your behalf, in the case of needing to self-quarantine or being admitted to hospital .
If you have fallen behind and need some help getting things up to date, we can recommend some great business associates.
They will help you to get the documents you need up to date quickly, easily and professionally.
Continue reading about our Business Continuity Planning Meetings here: Business Continuity Meetings
Remember, if you need any assistance or have any questions during this time, get in contact with us on (03) 9762 7344.
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