Small Business COVID-19 support: What can you get?

Running a business is a tough job, doesn’t matter whether you are a sole trader or a business owner with many employees. Yes, you might make more money than the average employee however, you spend way more hours thinking; plotting; planning; strategizing; marketing; managing and worrying about your entrepreneurship. You have sacrificed more personal moments than the average employee and you are the engine room of the Australian economy. The government will have to do everything they can to support you. Supporting you is supporting the economy and hence there are various initiatives announced within the last week alone with more to follow. We have noted all of these below. Please note: we can provide a virtual strategy session with one of our accountants to help you decide what you could do now to ensure you qualify.

Small Business COVID-19 support: What can you get?

So, here we go:

• 100% of PAYG withholdings, up to a maximum of $100,000 with minimum payment being $10,000 and first payment starting from the 28^th of April 2020, as an adjustment in your business activity statement.
  • Example: If your employee PAYG withholding was $12,000 for Jan to March Quarter, you shall receive a credit of $12,000 on your Quarter 3 BAS lodgment date which is the 28^th of April 2020. Another payment will follow in the July& Sep quarter equaling the first boost making a total of $24,000 within the 3
  • Also too, if you were to only withhold $5000 as withholding from wages and salaries then you would still be eligible to receive the minimum guaranteed amount of $10,000.
  • Even if you did not have any withholding obligation, you could still qualify for this benefit.
• 50% of wages reimbursed for retaining an eligible apprentice. (rules apply)
• Loans to small businesses will be made much easier and faster. This applies to circumstances where there is an existing relationship with the lender and most of the money should be used for business purposes.
• Accelerated depreciation up to $150K for eligible asset purchases.
• For larger than $150K investments, a 50% deduction on the cost of asset (eligible asset) within a time limited span of 15 months.
• Payroll tax refunds for the first 3 quarters of this financial year (Victorian businesses).
• Commercial tenants in Victoria government tenancies will be able to apply for rent relief.
• Early access to GST refunds.
• PAYG installments can be varied for Jan-March Quarter.
• PAYG Income tax installments already paid can be claimed back for Q1 and Q2.
• Charges & Penalties to varied PAYG installments will be waived for the full FY 2019-20.
• If you are affected with the COVID-19 then you can defer, income tax and PAYG installments.
• Interest and Penalties incurred after 23 January 2020 could be remitted.
• A low interest payment plan can be organized if you are affected by COVID-19.
• Any outstanding and overdue lodgments can be deferred.

Some banks may offer the below support for COVID impacted small businesses:

• Deferring of loan repayments by negotiating with the lender.
• Waiving of terminal fees (some banks only) for Merchant fees.
• Deferring payments on vehicle and equipment financing loans.
• Moving to interest only.
• Reducing the repayment amount.
• Moving to a minimum repayment amount basis.

Change in law regarding liquidations & Bankruptcy:

It is proposed that a creditor would need to wait for 6 months and the debt to be $20,000 before this can be pursued by way of liquidations and bankruptcy via the court system.

If you are paying rent, you could request for your landlord to defer your lease repayments, however the government has not enacted a law or a proposal supporting this, but if the landlords’ commercial lender (if applicable) is willing to pause the repayments on the loan then you may be able to pause your lease repayments. At the end of the day if the only other alternative with you is to go into administration or liquidation, the landlord may consider your circumstances in the wake of the crisis, since they may not find another tenant anytime soon and the costs of doing so are going to be significant too.

(Please note: A One Accountants are not a law practice and cannot provide legal advice and you should seek appropriate legal advice where applicable. Any advice provided is general only, we also do not practice in liquidations and hence any advice provided is general only, you should consult professionals in the area of expertise you seek)

As a business client of A One Accountants, you get free unlimited consult with your client manager. If you may have any questions pertaining the COVID stimulus and associated benefits kindly feel free to contact us.

If you or your business are affected by the coronavirus pandemic, we can run a free phone or skype

consultation to help you achieve the maximum benefit at such a time. If you think your business is affected, you might be eligible for some of the above benefits. However please note, benefits will only be available if you are eligible and you can prove this. We can help you understand the criteria that can help you determine the benefits you would be eligible for and what is it that you would need to provide.