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food delivery and covid 19

COVID-19: Support for Small to Medium Business

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There are a variety of supports currently in place, and more to be announced, to help support businesses through the Coronavirus pandemic:

  • JobKeeper payment
  • Boosting Cash Flow for Employers Package
  • Wage Subsidies for Apprentices and Trainees
  • ATO Tax Payment Deferrals
  • Payroll Tax in Victoria
  • Increasing the Instant Asset Write-off
  • Accelerated Depreciation for New Assets
  • Government-backed Loans
  • R & D Tax Incentive Extension
  • Loans, chattel mortgages and other financing repayments

JobKeeper payment

Jobkeeper payments are available to businesses that have been significantly impacted by Coronavirus. The payment will act as a wage subsidy to help keep your employees employed.

Generally, employers will be eligible if your turnover is less than $1 billion and your turnover will be reduced by more than 30% compared to a similar period a year ago (just one-month comparison is fine).

If eligible, you will receive a payment of $1,500 per fortnight before tax for each eligible employee. Eligible employees are employees who are:

  • Currently employed or were employed as at 1 March 2020 (this includes employees who were stood down but are then rehired as a result of this subsidy);
  • A full-time employee, a part-time employee, or a casual employee working on a regular basis for longer than 12 months (as at 1st March 2020);
  • at least 16 years of aged;
  • an Australia citizen or a holder of certain visas; and
  • not in receipt of a JobKeeper Payment from another employer (must nominate one employer to receive the payment from, if you have multiple jobs).
  • If the employee was receiving less than this per fortnight, you must top up their wage to $1,500 per fortnight.

Payments start from the first week of May 2020, will be backdated to 30 March 2020 and last for a maximum of six months.        

You must register your interest here to be updated with information over the next couple of weeks.

Refer to this fact sheet for more information.

Boosting Cash Flow for Employers Package

Businesses with turnovers of less than $50m (and not-for-profit entities) who employ people may be eligible to receive total payments of $20,000 to $100,000 in the form of a refundable credit against their activity statement. The credits will come in two stages:

Stage 1

Employers receive a credit of 100% of the PAYG Withheld from wages for the January- June 2020 period. The payment will be a minimum of $10,000 and will cap at $50,000 for the period. This means that:

  • Quarterly lodgers will be eligible to receive the payment for the quarters ending March and June 2020; and
  • Monthly lodgers will be eligible to receive the payment for the months ending March, April, May and June 2020. The March monthly activity statement amount will be multiplied by 3 to account for the January and February amounts that have already been lodged.

Stage 2

For employers that continue to remain active, an additional tax-free payment will be available in respect of the June to September 2020 period. The payment will be a minimum of $10,000 and will also cap at $50,000 for the period. This means that:

  • Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June and September 2020. Both payments will be equal to 50% of the initial Stage 1 payment up to the cap amount; and
  • Monthly lodgers will be eligible to receive the additional payment for the months ending June, July, August, and September 2020. All four payments will be equal to 25% of the initial Stage 1 payment up to the cap amount.

Example

A business lodges monthly activity statements with the March PAYG withholding amount totalling $4,000. Assuming the business’ PAYG withholding amount is $4,000 each for the months of April, May and June 2020, the business will receive a stage 1 payment as follows:

  • March 2020 – $12,000
  • April 2020 – $4,000
  • May 2020 – $4,000
  • June 2020 – $4,000

The ATO will credit these amounts to the business’ ATO client account and will make the following credits as part of stage 2:

  • June 2020 – $6,000
  • July 2020 – $6,000
  • August 2020 – $6,000
  • September 2020 – $6,000

Refer to this fact sheet for more information.

Wage Subsidies for Apprentices and Trainees

Employers with less than 20 full-time employees can apply for a wage subsidy of 50% of the apprentice or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020 up to a maximum of $21,000 per eligible apprentice ($7,000 per quarter). Apprentices must have been employed as at 1 March 2020.

Refer to this fact sheet for more information.

ATO Tax Payment Deferrals

The ATO has implemented a number of measures to help businesses:

  • Ability to vary March 2020 PAYG instalments to nil and claim a refund for any other instalments made during the 2020 financial year. Penalties or interest will not be applied to varied instalments for the 2020 financial year.
  • Interest and penalties incurred on or after 23 January 2020 can be remitted.
  • Assistance to businesses to pay ATO debts by setting up low to no interest payment plans, deferring payments or extending terms.
  • Quarterly lodgers can opt-in for monthly lodgement to access refunds quicker from activity statements.

Payroll Tax and Business Support Fund in Victoria

Payroll Tax

Businesses with taxable wages of less than $3 Million will receive a refund of all payroll tax paid in the 2020 financial year. These businesses will also be able to defer any payroll tax payments for the first 3 months of the 2020-21 financial year until January 2021.

The SRO will be contacting businesses directly if they qualify for a refund.

Refer here for more information.

Business Support Fund

Businesses in the state of Victoria can apply for a one-off grant of $10,000 per business.

Applications are open from 30 March 2020 to 1 June 2020.

Businesses can apply for the grant if they:

  • Employ staff;
  • Have been subject to closure or are highly impacted by Non-Essential Activity Directions
  • Have a turnover of more than $75,000
  • Have payroll of less than $650,000
  • Hold an Australian Business Number (ABN) and have held that ABN at 16 March 2020
  • Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16 March 2020.

Refer here for more information.

Increasing the Instant Asset Write-off

The instant asset write-off threshold has been increased from $30,000 to $150,000 for businesses with an aggregated turnover of less than $500 million from 30 June 2020.

The new write-off applies to both new and second-hand assets that are first used or installed ready for use from 12 March 2020 to 30 June 2020.

Refer here for more information.

Accelerated Depreciation for New Assets

Businesses with an aggregated turnover of less than $500 million can increase their depreciation deductions to certain new depreciable assets and applies to the 2020 and 2021 financial years.

An eligible entity can deduct:

  • 50% of the cost (or adjustable value where applicable) of the asset; plus
  • The deduction for usual depreciation that would have otherwise applied calculated on the remaining cost of the asset.

Refer here for more information.

Government-backed Loans

The Government will provide a guarantee of 50 per cent to SME lenders for new unsecured loans to be used for working capital through a new Coronavirus SME Guarantee Scheme. The scheme will be available to small to medium-sized businesses with a turnover of up to $50 million.

The terms will include unsecured finance with a maximum amount of $250,000 per borrower and up to three-year terms with an initial six month repayment holiday.

The scheme will commence by early April 2020 and will be available up until 30 September 2020.

Refer here for more information.

R & D Tax Incentive Extension

R & D tax incentive claims for the 2019-20 financial year will be eligible to be lodged up until 30 September 2020 without having to request an extension.

If a further extension is required beyond this date, an extension will be able to be lodged as per the usual process.

Refer here for more information.

Loans, Chattel Mortgages and other Financing Repayments

Most banks are offering repayment holidays for up to 6 months as well as other options that include payment extensions and additional finance.

Below is a summary of current bank offers as at 27 March 2020.

Refer to your bank to see what they are offering.

Major Banks

ANZ: Request a deferral of home loan repayments for up to six months, with a review at three-months & interest capitalised, meaning it is added to the customer’s outstanding loan balance to be paid over the remaining loan term.

Bank Australia: Deferral of scheduled home loan repayments for up to 3 months, with a further 3-month extension possible following a review.

Bank of Melbourne: Customers who have lost their job or suffered a loss of income as a result of COVID-19 can contact BoM for three months deferral on their home loan mortgage repayments with extension for a further three months available after review.

Bankwest: To provide additional support to home loan customers who may need assistance at this time, Bankwest is offering an option to defer home loan repayments for six months. Customers will be able to apply for a deferral of home loan repayments through an online registration process, which is currently under development and will be made available as soon as possible.

Bendigo and Adelaide Bank: Extending its existing COVID-19 assistance package for home loan customers, so affected customers can now apply for six months relief on loans.

Commonwealth Bank: All home loan and small business customers are now eligible to defer loan repayments by up to 6 months.

NAB: Pause home loan repayments for up to six months, including a three-month checkpoint.

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