What the $25,000 Coronavirus Rebate Means for Small Business

On March 12th, 2020 the Australian Government announced a stimulus package by way of a Coronavirus rebate, for small business to manage cash flow challenges and help businesses retain their employees

You can access the fact sheet Cash Flow Assistance for Businesses here

Full details of the Economic Response to the Coronavirus can be found here

But what does this actually mean? Facebook has gone crazy with business owners wanting to know what this means to them and when they are getting their $25,000.

Unfortunately, this isn't the case - the government isn't automatically handing out $25,000 to all business owners. Let's break down the Coronavirus rebate a little...

How to know if you are eligible:

1. Turnover must be under $50 million
2. Must have employees (businesses without staff will be excluded)

How it is delivered:

1. The $25,000 Coronavirus rebate is a rebate based on the level of tax on wages reported on your activity statements for March 2020 and June 2020 (or monthly activity statements for March 2020 – June 2020).
2. The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
3. The rebate will be applied as part of the BAS and reduce the overall amount owing.
4. If the rebate puts you into a refund position, the ATO can take up to 14 days (however it could take longer) to refund any amount to you.
5. Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

At this stage, there is no action required by our clients who will be eligible, it will be dealt with automatically upon lodgement of activity statements.

Does the Coronavirus Rebate Support Apprentices and Trainees?

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

How to know if you are eligible:

1. You must be employing less that 20 full-time employees and have an apprentice or trainee.
2. The apprentice or trainee must have been in training with a small business at 1 March 2020.

How it is delivered:

1. Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
2. Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.

Increasing the Instant Asset Write-Off *

The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include all businesses with an aggregated turnover of less than $500 million (previously $50 million).

If you are considering purchasing assets, please consider the cashflow implications of the purchase.  The increase to the instant asset write off DOES NOT mean that you will receive a tax refund, but rather that your taxable position as at 30 Jun 2020 will be reduced due to the expense being 100% recognised this financial year.  

Backing Business Investment *

The Government is introducing a time limited 15 month investment incentive to support business investment and economic growth, by accelerating depreciation deductions.

* This information is of a general nature and should not be considered taxation advice, please contact your accountant to discuss implications further.

Nourish Your Numbers and our continuity strategy

Over the past few years, Nourish Your Numbers has been implementing cloud based systems to service and support our clients, as such the majority of our work is performed remotely with our clients, with reduced face-to-face contact with our clients.

We are currently reviewing our processes for face-to-face meetings and it is possible that in the future this may reduced, but we will work closely with these clients to implement it as easily as possible for them.

We aren't panicking... we aren't rushing out to buy toilet paper (what is with that???) but we are certainly considering our offerings as with the rapid spread of Coronavirus, our focus is the safety of our employees.

Do you have a continuity strategy in place?

If not, it is time to at least start thinking about it. The next few months are going to be difficult for businesses in Australia and all around the world.

You can find more information on how to deal with Coronavirus here:

• FairWork
• Australian Government Treasury
• Department of Health
• Safe Work Australia

And if you're looking to feel empowered about your finances again, then book in a free Getting To Know Your Business call and we can discuss just how we can help you.