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  • Small Business Stewardship Group special briefing 26 March 2020

    Welcome

    Members were welcomed and thanked for attending at short notice.

    Australian Government COVID-19 stimulus package

    Legislation to enact the tax and superannuation measures described below has passed through the Parliament and received Royal Assent.

    Members noted:

    • ATO assistance and Government package would help many businesses, with many small businesses experiencing significant cash flow problems, struggling to pay bills, and keep staff with lower incomes
    • businesses with high turnover (>$500 million) do not qualify for the measures
    • the high volume of information available is challenging to keep on top of and find quickly
    • Government websites need to use plain English and avoid technical language. Practical information about how and when the assistance measures will be made available is needed

    The ATO noted that international experience in crisis situations suggests that some taxpayers may seek to fraudulently qualify for assistance. We will closely monitor fraud risks and seek to ensure our risk models do not delay the payment of cash boost amounts.

    The new australia.gov.auExternal Link website includes links to all federal government agency pages and all states and territories pages on COVID-19.

    The Australian Small Business and Family Enterprise Ombudsman websiteExternal Link provides COVID-19 information for small businesses.

    The government business helpline 13 28 46 is open seven days a week from 7.00am–11.00pm.

    Boosting Cash Flow for Employers

    Small and medium sized business entities with aggregated annual turnover under $50 million that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

    We will deliver the payment as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

    Eligible employers that withhold tax from their employees’ salary and wages will receive a credit based on the amount withheld, with a minimum credit of $10,000 up to a maximum credit of $100,000.

    Businesses need to lodge their activity statement to obtain the cash flow boost.

    To qualify for the cash flow boosts, the entity must continue to be active.

    The cash flow boosts will be made from the Government’s announced date of 28 April 2020.

    Refer to Boosting cash flow for employers for additional detail.

    Members noted lack of understanding of how the Boosting Cash Flow measure will work and how the value of the Boost is calculated. Communications need to be clear about the mechanism and calculation.

    Increasing the Instant asset write-off

    The Instant asset write-off has been extended so that from 12 March 2020 until 30 June 2020:

    • the threshold amount is $150,000 - up from $30,000
    • eligibility has been expanded to businesses with an aggregated turnover of less than $500 million - up from $50 million.

    Refer to Instant asset write-off for eligible businesses for additional detail.

    Backing business investment measure

    Businesses with aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years can deduct the cost of depreciating assets at an accelerated rate.

    A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost.

    Refer to Backing business investment - accelerated depreciation for additional detail.

    Early Access to Superannuation (super) measure

    Eligible individuals, including sole traders, will be able to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21.

    From mid-April 2020, eligible individuals will be able to apply online through myGov to access up to $20,000 of their superannuation across two financial years. One application for up to $10,000 can be made between 20 April 2020 and 30 June 2020 and a further application for up to $10,000 can be made from 1 July 2020 to 24 September 2020.

    The eligibility for this measure is based on the individual’s circumstances and not that of dependents or family members.

    Applicants will need to certify that they meet the eligibility criteria. They will need to sign a declaration that they understand the implications of withdrawing their superannuation early.

    Refer to Early access to your super for additional detail.

    ATO COVID-19 administrative assistance

    The administrative assistance available to businesses experiencing financial difficulty as a result of COVID-19 include:

    • deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
    • allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
    • allowing businesses to vary pay as you go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
    • remitting any interest and penalties incurred on or after 23 January 2020 that have been applied to tax liabilities.

    The assistance measures for those impacted by COVID-19 will not be automatically implemented. Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on our Emergency Support Infoline 1800 806 218.

    The ATO has established a one-stop shop web page for Dealing with disasters and COVID-19.

    Close

    Members were thanked for their time and encouraged to contact the ATO at any time with questions.

      Last modified: 29 Apr 2020QC 62396