Coronavirus tax and economic stimulus: what you can get
Business and personal stimulus measures
The coronavirus has been biting into global financial markets and economies. In an effort to combat the economic effects of the global coronavirus pandemic on the Australian economy, the government has released a stimulus package worth $17.6bn targeted at businesses, pensioners, and those in impacted sectors, regions and communities.
It is expected the package will provide direct support for up to 6.5m individuals and 3.5m businesses.
The coronavirus tax and economic stimulus package includes business investment initiatives, cash flow assistance payments to SMEs, household stimulus payments, and support for impacted sectors, regions and communities.
In addition, tax administrative relief will also be provided by the ATO including deferring tax payments for up to four months, which is similar to the relief provided following the 2019-20 bush fires. For more details on the tax relief available see Coronavirus tax relief.
Business investment initiatives
The instant asset write-off threshold will be increased from $30,000 to $150,000 and expanded to include access for businesses with aggregated annual turnover of less than $500m (up from $50m) until 30 June 2020.
The new threshold will apply from 12 March 2020 and is expected to support over 99% of businesses.
A time-limited 15-month investment incentive (through to 30 June 2021) will also be provided to support business investment by accelerating depreciation deductions. Businesses with a turnover of less than $500m will be able to deduct an additional 50% of the cost of business assets in the year of purchase.
Cash flow assistance payments for SMEs
Eligible small businesses will receive a Boost Cash Flow for Employers of up to $25,000 (with a minimum payment of $2,000). The payment will provide cash flow support to businesses with a turnover of less than $50m that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8m people.
Businesses will receive payments of 50% of their BAS or IAS from 28 April 2020 with refunds to be paid within 14 days.
Small businesses will also receive a total of $1.3bn to support the jobs of 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.
Household stimulus for pensioners
A one-off $750 stimulus payment will be made to pensioners, social security, veteran and other income support recipients and eligible concession card holders.
Payments will be made from 31 March 2020 on a progressive basis, with over 90% of payments expected to be made by mid-April 2020.
The payment will be tax free and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran Allowance payments.
There will be one payment per eligible recipient. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
Support for impacted sectors, regions and communities
Support of $1bn will be provided for sectors, regions and communities that have been disproportionately impacted by the economic impacts of the coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
This measure will include waiving fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains.
In addition to the targeted economic stimulus measures, tax administrative relief will be provided for certain tax obligations, including deferring tax payments for up to four months.
Need more information?
If you would like more information on whether your business would qualify for cash flow assistance under the coronavirus tax and economic stimulus measures, contact us today.
We can also help you determine whether assets you’re planning to purchase could potentially qualify for the extended and increased instant asset write-off.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.