The latest package from the government increases the previous Pay As You Go Withholding assistance to small business.

• The assistance will be increased from a $25,000 tax-free cash payment to a maximum payment of $100,000 with the minimum payment being increased from $2,000 to $20,000. These payments will be split with half this financial year and a half in the July to October quarter.
• The minimum payment will apply to businesses even if they are not required to withhold tax.
• The payment is eligible to businesses with a turnover less than $50m and also for not-for-profit charities.
• The tax-free payment is now 100% of the PAYGW reported on the Activity Statement up to a maximum amount of $50,000 and a minimum of $10,000 to the end of June 2020.
• Eligible business will also be entitled to an additional payment of $10,000 up to $50,000 in the October quarter.
• The amount will be paid automatically by the Australian Taxation Office based on the business’s monthly or quarterly business activity statements. This means when lodging your activity statement, the PAYGW amount will not need to be paid if you are below the maximum amount. If the amount places the Activity statement in a refund position the ATO will deliver the refund within 14 days.

Supporting Apprentices and Trainees – no change to advice 20/03/20

Temporary Relief for Financially Distressed Businesses – new advice

The government have announced a package which provides a safety net to lessen the threat of actions which could unnecessarily push businesses into insolvency and force windup of the business.

• The threshold at which creditors can issue a statutory demand has been increased from $2,000 to $20,000 for 6 months as well as the time in which companies have to respond to statutory demands from 21 days to 6 months.
• Temporary increase in threshold for a creditor to initiate bankruptcy proceedings from $5,000 to $20,000 for 6 months and an increase in time period for debtors to respond to bankruptcy notice from 21 days to 6 months.
• Temporary relief for directors from any personal liability for trading while insolvent
• These above measures will apply for 6 months.
• ATO will tailor solutions for owners or directors of a business that are currently struggling due to Coronavirus including temporary reduction of payments or deferrals or withholding enforcement actions including Director Penalty Notices and wind-ups.

Tax Obligations

The ATO have announced a range of support initiatives for taxpayers experiencing difficulties which can include:

• Payment deferrals
• Businesses on a quarterly reporting cycle may elect to change their GST reporting and payment to monthly, to get quicker access to GST refunds.
• Low interest payment plans; and
• Remission of interest and penalties applied to tax liabilities incurred after 23 January 2020
• As many businesses are also experiencing an impact on their business income it may be likely that annual business profit is decreased this financial year. This may warrant a consideration of the need vary PAYG instalments. A taxpayer can vary its instalments if it considers that using the current amount or rate will result in paying too much tax for the year. If the business varies the next quarterly PAYGI to nil they may also request a refund of PAYGI paid in the September 19 & December 19 quarters.
  • Please remain aware if lodging your own BAS’s and choosing to take advantage of this variation that it may leave you with a large tax obligation next year if no instalments have been paid towards the 2019-2020 income tax.

• Don’t bury your head in the sand and hope they’ll just go away – this isn’t a good strategy when dealing with the ATO.
• Keeping your tax returns and Business Activity Statements up to date will mean the ATO is more open to tax debt deferment requests.
• The National Tax and Accountants Association (NTAA) has also put in a request to the ATO for a blanket 3-month extension for tax agent lodged FBT, income tax returns and BASs. We will wait and see if anything comes from that.

Loan Guarantees

The government has announced a ‘coronavirus SME guarantee scheme’ which will support lending to small and medium-sized business available to all business with a turnover of less than $50 million.

• Government will guarantee 50% of an eligible loan through participating banks and non-bank lenders to businesses disrupted by coronavirus
• Loans must be used for working capital purposes and will be unsecured
• This will be for loans granted within 6 months starting 1 April 2020
• Lenders will not be charged a fee for accessing the scheme
• Loans will be repayment free for 6 months
• Maximum that can be borrowed under the scheme will be $250,000 on terms of up to 3 years.

Investment Incentives

To encourage businesses (up to 500 million turnover) to spend, the government has increased the instant asset write off threshold from $30,000 to $150,000. This is in currently only in place until June 30.

Payroll Tax Relief – as at 23/03/2020

VIC

• Thousands of Victorian businesses will have payroll tax payments refunded and waived for the rest of this financial year
• Businesses with payrolls up to $3 million can expect the refunds within days
• Payroll tax for the first quarter of the next financial year will also be deferred as part of a support package

NSW

• Reduction in the 2019/20 payroll tax liability by 25% and the waiver of payroll tax payments for three months for employers with grouped Australian wages of no more than $10 million
• The reduction in the liability will be received when the annual reconciliation for the year is lodged, which is due on 28 July 2020
• Eligible employers will not be required to make payroll tax payments in NSW for the months of March, April and May 2020. It is currently unclear whether the monthly returns will still need to be lodged.
• The NSW Government has also announced the payroll tax free threshold will increase from $900,000 to $1,000,000 with effect from 1 July 2020. This increase is a general increase and will apply to all employers. This replaces the previously scheduled increase in the threshold to $950,000.

QLD

• Qld Government has announced a relief package for businesses affected by the coronavirus allowing them to defer paying payroll tax until 31 July 2020
• As of Tuesday 17 March, all businesses are now eligible

TAS

• Employers in Hospitality, Tourism and Seafood industries will not be required to lodge payroll tax returns for March, April and May 2020.
• For employers with group wages up to $5 million - Approved applicants (who demonstrate that their business is affected by Coronavirus) will not be required to lodge payroll tax returns for March, April and May 2020

WA

• Eligible business can defer lodgment and payment of payroll tax returns if your business has been directly or indirectly impacted by COVID-19
• Eligible businesses who employ a Territorian in the next 12 months won’t be liable for payroll tax on those wages for a two year period.
• Eligible if a non-grouped business with annual Australian taxable wages not exceeding $7.5 million or a grouped business with the group’s annual Australian taxable wages not exceeding $7.5 million.

NT

• Eligiblee businesses who employs a Territorian in the next 12 months won’t be liable for payroll tax on those wages for a two year period.

SA

• No measures released yet

ACT

• No measures released yet