In a bid to minimise the potential impact of the Coronavirus to the Australian economy, the Government has today announced a $17.6 Billion targeted stimulus package.*
We will keep you updated as soon as more information becomes available, but this is what we know so far:
Instant Asset Write-Off Concessions have been extended
- Access to this concession for business with aggregated annual turnover up to $500 Million.
- Immediate outright tax deduction for Assets including Plant and Equipment and Motor Vehicles costing up to $150,000.
- Can be new or second-hand assets.
- Applies for purchases made from 12 March 2020 up until 30 June 2020.
15 Month Investment Incentive – Assets over $150,000
- For assets over $150,000, businesses will be able to claim 50% of the cost of the asset in the first year, on top of the normal depreciation rates.
- New assets only.
- Starting today 12 March 2020, this incentive is available for 15 months up to 30 June 2021.
- Please note – The government has now clarified that this will not be paid as an investment allowance (ie 150% tax deduction) and will instead work to speed up businesses access to writing off the assets over $150,000 (still only able to claim 100% of cost base over the ownership timeframe).
What does this mean for me?
For example, Bob The Builder Pty Ltd is a profitable house building business with a turnover of $10 million.
Bob (the director of the business) plans to purchase 2 new trucks at some stage over the next two years. The trucks will cost approx. $120,000 each.
If the truck purchase was brought forward (even if these were financed under a chattel mortgage), there would be an immediate tax deduction of $240,000 and a tax saving of $66,000.
Boost Cash Flow for Employers
- Access to this incentive includes businesses with turnover less than $50 Million, who employ staff.
- Refunds of up to $25,000 for eligible business based on the amount of PAYG withholding obligations.
- This is based on 50% of a business’s PAYG Withholding being refunded for the period 1st January 2020 to 30th June 2020, for Activity Statements due to be lodged from 28th April 2020 onwards (March quarterly BAS, April and May Activity Statement).
- Minimum payment of $2,000 for businesses, as long as they employ.
- The payment will be tax free.
- Beginning from 28 April.
Apprentices & Trainees
- Employers with less than 20 full time employees can apply for this subsidy.
- 50% of the apprentice’s or trainee’s wage (a maximum rebate of $7,000 per quarter).
- Subsidy available for up to 9 months (from January 2020 until 30 September 2020).
- If apprentice or trainee moves to another employer, this subsidy will move with them.
- Registration for this subsidy should be available early April 2020.
Industries heavily reliant on tourism, agriculture and education
- Waiver of fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park and Commonwealth National Parks.
- Additional assistance to help businesses identify alternative export markets or supply chains.
- Targeted measures to promote domestic tourism.
*This information is based on a government announcement that is not yet legislated. If you plan on taking action based upon the government’s announcement, it is best to check with your accountant as to the passage of the legislation.