Federal
Govt – Tax Related Business Measures
- Cash flow
boost payments – tax-free
payments up to $100,000 for eligible small and medium sized entities
(SMEs), and not-for-profits (including charities) that employ people, with
a minimum payment of $20,000. The payments will be made in 2 stages: see
2020 WTB 12 [262]. At 23 April 2020, the ATO had paid out $3bn
in cash flow boost payments to 177,000 businesses ahead of the originally
anticipated start date of 28 April: see 2020 WTB 16 [384]. Further cash
flow boost payments will be made by October 2020.
- Instant
asset write-off extended and increased to $150,000 – the Coronavirus Omnibus Act amended the ITAA 1997 to
increase the instant asset write-off threshold from $30,000 to $150,000
for business entities with aggregated annual turnover of less than $500m
(up from $50m) from 12 March 2020 to 30 June 2020:
- Accelerated
rates of depreciation
– businesses with aggregated turnovers of less than $500m in an income
year can deduct capital allowances for depreciating assets at an
accelerated rate. This measure extends over 2 income years, ie 2019-20
(albeit not the full year) and all of 2020-21:
- R&D tax
incentive applications for 2019 deferred – the Government has deferred the lodgment
dates for R&D Tax Incentive applications for the 2018-19 income year
until 30 September 2020:
JOBKEEPER PAYMENT
The JobKeeper Payment scheme is designed to
provide a wage subsidy of $1,500 per fortnight per employee. The payment will
be paid to employers, for up to 6 months, for each eligible employee that was
on their books on 1 March 2020 and is retained or continues to be
engaged by that employer. Where a business has stood down employees since 1
March, the payment is designed to help the employer maintain connection with
their employees.
- JobKeeper
legislation passed – contains
the legislative framework to implement the Government’s $130bn JobKeeper
Payment (with the mechanics to be contained in Statutory Rules):
- At 23 April 2020,
more than 900,000 businesses had registered their interest in
accessing JobKeeper payments, with 275,000 already completing
applications:
- JobKeeper
Statutory Rules (as amended)
– contain the detailed rules and taxpayer requirements to qualify for
the JobKeeper Payment scheme:
- JobKeeper
alternative turnover test
– details of the alternative tests that can be used to determine if the
decline in turnover test is satisfied for the purposes of
the JobKeeper Payment:
- JobKeeper
alternative test for special purpose entities – new rules that set out a separate decline in
turnover test where businesses use a special purpose entity to employ
staff:
- JobKeeper
decline in turnover test
– changes and modification of rules affecting: (i) charities; (ii)
religious practitioners; (iii) the selection of all eligible employees
(one-in, all-in); (iv) students aged 16 and 17; (v) international aid
organisations; (vi) universities:
- Banks able
to confirm employer’s JobKeeper election – ADIs are able to confirm that notices have been
provided by the Commissioner to employers concerning their election to
participate in the JobKeeper Payment program, designed to assist
provision of bridging finance:
- JobKeeper
deadline(s) extension:
the Federal Government announced that employers have until
8 May 2020 to pay staff for the first 2 JobKeeper
fortnights (previously 30 April) and must register by
31 May 2020 (again, previously 30 April):
SUPERANNUATION
Superannuation early release up to $20,000 – individuals affected by COVID-19 can apply
via myGov to release (tax-free) up to $10,000 of their superannuation in the
2019-20 financial year. A second application up to $10,000 can be made in the
2020-21 year until 24 September 2020. To be eligible (reg 6.19B of
the SIS Regs), a person must be unemployed or eligible to receive income
support such as jobseeker or youth allowance. Alternatively, on or after
1 January 2020, the person must have been made redundant, or their
working hours have been reduced by 20% or more (or a reduction in turnover of
20% or more for a sole trader):
- Super
pension drawdowns reduced by 50%
– the minimum annual payment amounts for pensions and annuities have been
temporarily reduced by 50% for 2019-20 and 2020-21. The reduction in the
minimum payment amounts applies to account-based, allocated and
market-linked (term allocated) pensions:
- Temporary
residents early release for COVID-19 – certain temporary residents impacted by
COVID-19 may apply for an early release of up to $10,000 of
their superannuation by 30 June 2020:
- Tax agents
granted AFS licensing relief for early release – a temporary AFS licensing exemption allows
registered tax agents to provide certain financial product advice to their
existing clients about the early release of superannuation under the Coronavirus
condition of release: ASIC has also provided some administrative relief:
- AML/CTF
exemption for early release of super – AUSTRAC has registered legislative rules to provide
a temporary exemption from the customer identification procedures for
super funds making COVID-19 early release of super payments in respect of
the money-laundering and counter-terrorism rules:
SOCIAL
SECURITY
- Fortnightly
$550 Coronavirus supplement
– for job seekers, sole traders, students etc (Coronavirus supplement).
Effectively doubles the current payment for new and existing social
security recipients from 27 April 2020. To be paid for 6 months
to both existing and new recipients of the JobSeeker Payment, Sickness
Allowance, Youth Allowance for jobseekers, Parenting Payment Partnered,
Parenting Payment Single, Partner Allowance, Sickness Allowance and the
Farm Household Allowance:
- $750
stimulus payments for income support recipients – the first $750 cash stimulus payment has now gone
out to 6.8 million eligible pensioners, carers, disability support
pensioners, those on family tax benefits and concession card holders. A
second $750 payment will be made from 13 July 2020 for eligible
income recipients and concession card holders:
- Pension deeming
rates cut – the social
security deeming rate have been reduced (twice) to 0.25% for financial
investments up to $51,800 for single pensioners and $86,200 for pensioner
couples. The upper deeming rate is
2.25% for balances over these amounts:
REGULATION
- Commercial
property tenancies: States to implement mandatory National Code – the Prime Minister confirmed that the States and
Territories will legislate a “Mandatory Code of Conduct for SME
Commercial Leasing Principles during COVID-19”:
- Creditors
statutory demand threshold
– the current minimum threshold for creditors issuing a statutory demand
on a company under the Corporations Act 2001 from $2,000 to $20,000. The
statutory timeframe for a company to respond to a statutory demand has
similarly been extended from 21 days to 6 months:
- Bankruptcy
minimum debt of $20,000
– the threshold for the minimum amount of debt required for a creditor to
initiate bankruptcy proceedings against a debtor will increase from its
current level of $5,000 to $20,000 (ie personal insolvency). The time
debtors have to respond to a bankruptcy notice will be increased from 21
days to 6 months:
- Duty to
prevent insolvent trading
– directors will be (temporarily) relieved of their duty to prevent
insolvent trading with respect to any debts incurred in the ordinary
course of the company’s business:
- Federal wage
subsidy for apprentices
– eligible employers can apply for a wage subsidy of 50% of the
apprentice’s or trainee’s wage paid during the 9 months from
1 January 2020 to 30 September 2020:
- SME loan
guarantee scheme for bank lending
– the “coronavirus SME guarantee scheme” which will provide a
guarantee of 50% to SME lenders for new unsecured loans to be used for
working capital:
- Regional and
sector support – the
Government has set aside an initial $1bn to support those regions,
communities and industries that have been disproportionately affected by
the economic impacts of the Coronavirus, including those heavily reliant
on industries such as tourism, agriculture and education
- Subsidy for child
care providers
– the Government will pay 50% of the sector’s fee revenue up to the
existing hourly rate cap based on a point in time before parents started
withdrawing their children in large numbers, but only so long as services
remain open and do not charge families for care:
