Article by Simon Byers, Partner at Highview Accounting and Financial.
The weekend saw another round of stimulus announced with the Federal Government beefing up their initial package and the Victoria Government coming to the party also.
Starting from this March BAS, PAYG tax you have withheld from your employees and typically pay to the ATO, you will not need to pay. This is 100% of the PAYG up to $50,000 over the March, April and May period and another $50,000 for the June, July, August and September periods. This is in the form of a credit allocated to your ATO account. If that puts you in a refund situation then you will get cash back. If not it simply reduces the amount you need to pay to the ATO. This is automatic and does not need any type of registration, just lodge your BAS as normal.
See the first fact sheet attached for more information.
For clients with apprentices and less than 20 employees, the government will pay 50% of their wages up to $7,000 per quarter over the next 3 quarters. This is a big help for clients in this space. It does take registration your accountant can look into how this is done and will look to assist you if they can.
Pausing Loan Repayments
Most banks are allowing businesses to request a holt to repayments on their loans. Interest will still be charged and the loan just go for longer. You need to request this from your bank and inside contacts have told me using the online forms is much quicker than calling the help lines, which are of course inundated. Every business should consider this as it is only a temporary thing but does provide cash flow assistance during what will be a tough time for all businesses.
Some banks have also extended this to personal home loans as well.
SME Loan Guarantee Scheme
The government is providing a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital. Loans will be up to 3 years with an initial 6 month repayment holiday. There is no detail as to how you apply for these yet but again your accountant should be able to share the information as soon as they can.
There has been no announcement on this yet but suspect there will be this week. If you need to, speak to your landlord about getting a rent free period or at least reduction during this difficult time. There hands may be forced by the government soon but none the less I suspect most will agree so definitely worth asking the question. State Stimulus
Payroll Tax Refund/Credit
For businesses with less than $3 mill in payroll, all payroll tax paid for the 2019/20 year is to be refunded. If you lodge your payroll tax yourself then keep an eye out for guidance on how to organise the refund.
If you lodge annually then I expect you will still need to lodge but will not have to pay.
Simon Byers | Partner
Phone (03) 9529 1566 | PO Box 197 Prahran Vic 3181 | Highview.com.au
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to your accountant or financial services provider for advice.