Running a small business or being self-employed can be challenging. Add to that the hit of a world-wide coronavirus pandemic which is impacting the way consumers are spending and our economy and no doubt business-as-usual will be disrupted.
Fortunately, the government is working to support self-employed individuals and small-to-medium business owners through this difficult time. This means you might be eligible for financial and business support to help you survive the different world we’re living in.
What support is available for small business owners and self-employed professionals?
This is where there is good news. The Australian Government has introduced a multi-billion-dollar stimulus package.
Geared towards a series of tax breaks to help boost investment and feed funds circulating, the 17.6 billion-dollar package is aimed at lessening the financial burden many will face with COVID-19.
This will ensure small-to-medium businesses and self-employed workers can continue to focus on their career goals and objectives, whilst keeping the cash flowing.
Whilst discussions are still being had about new initiatives to support the local economy, businesses and workers, the package is a great starting point to help ease the financial burden of the coronavirus pandemic.
What are the benefits of the package?
According to the Australian Government, the current economic stimulus package has been designed to reinstate confidence in business owners and those they employ.
This is being reviewed every day as new information is turned over to the Government. So, more benefits are still to come, with Scott Morrison revealing talks with the Reserve bank are underway.
However, some of the inclusions available now offer an array of benefits to businesses, with the main one being the increase of the existing instant asset write-off threshold.
The instant asset write-off threshold has been increased from $30,000 to $150,000, and access to the write-off has been expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until June 30, 2020.
With the help of the package, businesses can continue to buy large items of capital equipment needed for their business, whilst also obtaining an immediate tax deduction.
Provided the items you’re wishing to acquire is less than $150,000, you can receive a write off for it.
This means items such as cars, utes, computer equipment, office furniture, equipment and more can be acquired for your business with an immediate tax deduction.
Through the package, the government has offered a deferral of GST, income and other tax payments for four months on a case-by-case basis. Which, in effect is an interest-free loan.
The government is also making tax-free payments of up to $25,000 to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses.
The payment is intended to provide cashflow support to businesses with annual turnover of less than $50 million but is only available to those businesses that employ staff.
Whilst the exact details are not yet available, it appears these payments will be administered and monitored closely by the Australian Taxation Office.
Wage assistance will also be provided to help small businesses to keep their apprentices and trainees, with the aim that you can continue to operate and support local employment.
A comprehensive list of information on inclusions for each section of the package can be accessed via the Australian Government economic response document.
Are you eligible for these assets?
Through this package, more businesses and self-employed professionals will be able to benefit from asset incentives.
As for eligibility, this will depend on the asset benefit you’re trying to access.
Accessing instant asset write offs (IAWO)
Expanding the IAWO threshold will allow for an additional 5,300 business around Australia to access IAWO for the first time.
Eligibility is open to businesses with an aggregated annual turnover of less than $500 million (up from $50 million).
Cash-flow assistance for businesses
Small and medium businesses with an aggregated annual turnover under $50 million that employ workers will be eligible to cash flow assistance. This will generally be based on prior year turnover.
Apprentice and traineeship subsidiaries
The subsidy for apprentices and trainees will be available to small businesses employing fewer than 20 full‑time employees who retain an apprentice or trainee.
Employers of any size and Group Training Organisations that re‑engage an eligible out‑of‑trade apprentice or trainee will be eligible for the subsidy. The apprentice or trainee must have been in training with a small business as of 1 March 2020.
All areas of the package and eligibility will be closely monitored by the Australian Taxation Office and other governing bodies.
Duration of access
This proposal applies from 12 March 2020 until 30 June 2020, however some incentives have been extended beyond this period.
We advise that if you’re wishing to access any of these proposed benefits, that you discuss this with our team first.
Our team is equipped with the knowledge to help you understand what you’re eligible to receive and can provide guidance for the best outcome on your application.
We can then help you access these benefits and start safeguarding your finances amid the COVID-19 situation.
Call our team today to talk about your options.