Government Stimulus Packages for Business Owners

Author: techadmin | November 22, 2021

So far we have had two federal government stimulus packages announced and other state government based initiatives. It is important in these uncertain times for us all to take stock of the level of income our businesses and personal lives are going to be receiving. Some will see this as free money to grab, others more importantly will be in desperate need of a cash injection to either keep business going, help cover bills or protect your future livelihood. Regardless this is a game changer for every business owner. We have listed a brief outline of each measure announced below with fact sheets directly from the government so you are getting the raw facts.

Keep in mind, many of these packages generally require you to have spent your own money. Ensure any decision you make is commercially viable and have considered all the facts.

Boosting cash flow for employers

In short, there is potentially up to $100,000 of benefits available to offset Pay As You Go Withholding from wages paid, which will be automatically be applied to your business activity statement account with the ATO. It will be treated as a tax-free income payment. Generally this will not result in extra cash in your bank account.

With the announcement of the ‘enhanced’ package over the weekend, the payment has been proposed to be increased to equal 100% of tax withheld from employees with a minimum payment of $10,000 and maximum of $50,000. So even if you are not required to withhold tax from employees you potentially may receive $10,000.

Further, they have proposed they will do a further payment matching the above between July and October 2020 taking the minimum payment to $20,000 and maximum to $100,000.

To be eligible:

  • Be withholding tax to the ATO on their employees salary and wages
  • Turnover under $50M
  • Active employer established prior to 12 March 2020

For further details on the above information, you can access the full fact sheet by clicking on the link below:

Supporting apprentices and trainees

The Government wants you to keep your apprentices and trainees employed. Eligible employers will be able to apply for a Government subsidy to help keep their apprentices and trainees employed. The Government will reimburse the employer 50% of the apprentices or trainees wage up to $21,000 per employee (up to $7,000 per quarter) for wages paid from early April until the 30th of September 2020.

The main eligibility criteria:

  • You must be a small business employing less than 20 full-time employees with at least 1 apprentice or trainee
  • The apprentice or trainee must have been employed as such as at 1 March 2020

For further details on the above information, you can access the full fact sheet by clicking on the link below:

Increasing the instant asset write off

We have had instant asset write off benefits almost as far back as the 2009 Global Financial Crisis. This has always been to encourage business owners to go out and invest in plant & equipment. The goal is to have cash flowing through businesses as they invest which keeps people employed.

You can now invest in plant & equipment with a value up to $150,000. Plant & equipment include tractor, truck, construction equipment, CNC manufacturing equipment. The benefit to you is an upfront tax deduction in the relevant year, rather than depreciating over an average 8 year period.  So for a small company with a 27.5% tax bracket, you potentially save up to $41K in tax; that is if you were due to pay tax. If you are running at a loss, this will not help you this year or in the short term. Great for any business expecting to generate a profit this year or next, has strong prospects for growth or was considering these investments.

Your accountant can help you consider whether this is a worthwhile investment.

For more information on instant asset write offs, you can access the full fact sheet by clicking on the link below:

Backing business investment

There is a special incentive for the bigger businesses in town with sales under $500K that invest in Plant & Equipment. Now they will be entitled to a 50% upfront deduction. The balance of the asset value will depreciate as per normal capital allowance rules.

Understand this more than likely doesn’t directly help any of our small business clients, however the whole economy needs help. Larger businesses do keep small businesses engaged and internal employees employed by completing larger purchases.

For more information on backing business investments, follow the link below:

State payroll tax waivers

Any business in Victoria with a payroll of less than $3 million will be eligible to receive a full refund of all payroll tax paid in this financial year.

For more information payroll tax waivers, follow the link below:
Tax relief for eligible businesses

State waiver on liquor licencing

In Victoria, businesses such as cafes, restaurants, bars, pubs and clubs that have paid their full liquor licencing renewal for 2020 are eligible for a full refund and if you have not yet paid the renewal, this fee will be waived in response to the closures of licensed venues across Australia today.

For more information on liquor licensing fee waivers, follow the link below:
Tax relief for eligible businesses

Temporary relief for financially distressed businesses

This one does not involve a cash stimulus however it is important for any business that may be impacted to a point that cash stimulus isn’t going to warrant the continuation of business.

This measure is directed to protect businesses that have been directly impacted by the current Covid-19 pandemic by creating higher temporary thresholds and more time to respond to creditors that may send you a statutory demand. Under these temporary rules you now have 6 months to respond before a presumption of insolvency can be relied on.

There are other extensions to current rules that will further protect directors from personal liability during this time.

If you have received a Statutory Demand, please call us immediately to discuss.

For further information on this point, follow link below for the full fact sheet:

For more information on this package and what you may be entitled to, please contact our office to book an information session for your business or follow the link to our booking website.

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