Information on Coronavirus (COVID-19) Stimulus Package for Small Business Owners

OUR CLOUD SYSTEMS MEAN YOU CAN ALWAYS CONTACT US IF YOU NEED US

In light of the recent developments around the Coronavirus (or COVID-19) and the uncertainty we are all facing day to day, we want to assure you that we expect no major interruptions to the services that we provide to you.

We have invested heavily in the latest technology in recent years, and this means we can keep assisting you no matter what may happen.

All members of our team are able to work remotely and have access to all the technology systems and tools required.

GOOD ADVICE IS NEEDED NOW MORE THAN EVER

If you have any general queries, requests for booking appointments or requests for documents, please feel free to contact us on 03 51749111.

Our office is currently closed. The phone will be unattended, however messages will still be checked on a regular basis. Please leave a message and it will be sent to the appropriate person. Alternatively, you can book phone or video appointments at a time convenient for you with the accountant you wish to speak to.

BUSINESS CONTINUITY

Some key things to be aware of to help your business survive in these difficult times include:

Maximise Cash Receipts from the Updated Government Stimulus Package

Review the Australian Government stimulus package for business cash flow. Work with your Accountant to identify which key parts your business is eligible for and get the process started to obtain these cash flow bonuses.

  • Boosting Cash Flow – Up to $100,000 credit or cash payment against activity statements equal to 100% of PAYG withheld from employees from March 2020 to September 2020
  • Boosting Cash Flow – Minimum payment of up to $20,000 even if employers aren’t required to withhold tax from employees
  • JobKeeper Payment – Subsidy paid to you by the Government of $1,500 per fortnight per eligible employee from 30 March 2020 for a maximum of 6 months. This will help you to keep staff and will help you restart when the crisis is over.
  • Supporting Apprentices + Trainees – Wage subsidy of 50% of wages paid up to a maximum of $21,000 per apprentice for the 9 months from 1 January 2020 to 30 September 2020
  • Instant Asset Write-off – Up to $150,000 per asset can be instantly written off for assets purchased by 30 June 2020. Applies to businesses with turnover up to $500 million.
  • Accelerated Depreciation Deductions – Deduction of up to 50% of the cost of an asset in addition to existing depreciation rules.
Cashflow Assistance

Meet with your Accountant to create or update your business cash flow plan over the coming months. You need to your daily and weekly planned cash position to make informed decisions, like when you may need additional bank funding.

Prepare the Cash Flow Forecast with these scenarios:

  • Income reduced by 50%
  • Income reduced by 75%
  • Expenses cut to minimum, including
    • Reduced Wages
    • Rent reduced by 50%?
    • No payments to ATO
    • Include Superannuation payments when due

How long can your business survive with the above assumptions?

Consider Delaying Tax Payments to the ATO

Keeping your business alive means paying your employees, your key suppliers, your rent and your Accountant (so we can keep helping you during this crisis) each week! Nothings else matters over the short term.

You may need to delay making payments of GST, PAYG Withholding Tax and Employee PAYG Tax to the ATO. You should set up a second bank account (separate from your main trading account) and each week transfer cash for these payments across into it. If needed, you can then dip into this cash reserve to keep your business alive.

See the section below about ATO Tax Relief Options.

Important: It’s vital that you keep lodging your Business Activity Statements (BAS’s) and Instalment Activity Statements (IAS’s) by their due dates and negotiate a delayed payment with the ATO, otherwise the ATO may view the PAYG withholding portion as non-compliant and you will then lose you tax deduction for these amounts.

Consider Alternative Funding Arrangements

Consider using alternative funders such as Moula or Prospa to set up a short term line of credit now to pay for inventory and operating costs. These funders lend based on the cash flow of your business and don’t need property security. You should consider doing this as a backup now to any other bank lending arrangements you may have.

Enduring Power of Attorney (EPOA) + Will – Create or Update these NOW

If you have to self-quarantine or are admitted to hospital, if you don’t have an EPOA then no-one else can make important business or financial decisions on your behalf. As a business owner, it is 100% essential that you have an up to date EPOA and Will, and that your family know where these are stored.

We’ve teamed up with Littleton Hackford Solicitors to offer you a fast, easy and professional way to get these documents prepared quickly. Simply email or phone their office on 03 51761345 and they can make appropriate arrangement with you.

Review ATO Tax Relief Options

The Australia Taxation Office (ATO) is implementing a series of relief options to assist those impacted by the coronavirus. The relief will not be automatically applied.

You or your Accountant will need to contact the ATO to make any of the following requests for assistance.

  • Businesses can call the ATO’s Emergency Support Infoline (1800 806 218) to discuss relief options based on their needs and circumstances.
  • Individuals and businesses can request deferral of some payments (by up to 4 months) and vary instalments.
  • Businesses (under $20 million turnover) can elect to report and pay their GST monthly instead of quarterly to accelerate access to GST refunds, but only from 1 April 2020, and must remain monthly for 12 months.
  • Quarterly payers can vary their PAYG instalments for the March 2020 quarter, and claim a refund of instalments paid for the Sep and Dec 2019 quarters.
  • Businesses can request remittance of interest and penalties applied to tax liabilities incurred after 23 January 2020.
  • Businesses can request a low interest payment plan.
  • Employers still need to meet their SG obligations. The ATO has no discretion under the SGC rules to vary the due date or waive the SGC where contributions are late/unpaid.

When we have our 2020 Tax Planning meeting with you over the next few weeks, we will assist you with opportunities to restructure how you pay yourself so that you can receive the maximum cashflow assistance amounts from the Government.

Contact us TODAY if you would like to book a phone or video appointment to ensure you receive your maximum cashflow assistance from the Government.