We hope you and your families are well and navigating this difficult time as best as you can. We’ve been asked a lot of questions over the past few days so I thought I’d share these with you and provide some help on the things you can action straight away, or at least start to consider utilising shortly.
One of the questions we have been asked constantly this week is as an employer how do I access the $100,000 assistance the Government is willing to pay for my Employees PAYG withholding tax over the next 8 months.
This has also been referred to as ‘Boosting cash flow for employers’ and the ‘Employer PAYG rebate’
It’s referring to your own and your employee’s tax withheld from their salaries reportable on BASs covering the March 2020 to October 2020 periods. This will mean that if you are a small business employer you do not have to pay this to the ATO up to $100,000 across those 8 months of the PAYG. For monthly BAS lodgers, it’s slightly different but equally generous rules apply.
This $100,000 is described by the ATO as ‘a payment’ however the amount will only be credited against your lodged BAS on the normal due date, to offset the unpaid liability, it will not physically be paid to you. If you withhold less than $10,000 of PAYG during the period 1 March to 30 June 2020, then you will still receive a credit of $10,000.
At this stage, there has been no mention of any change in lodgement dates for your usual periodic activity statements and returns. Payment of any liabilities in respect of those lodgements is covered elsewhere in this list.
The next question we have been asked is how do I take advantage of the 100% asset write off.
The types of assets that can be considered for the 100% asset write off would ordinarily be plant and equipment, and the $150,000 limit is per item or set of items for small businesses. These assets must be ordered and installed by 30 June 2020 based on the current stimulus.
The benefit you receive may not occur until you lodge your trading entities FY2020 tax return unless you believe that the impact of the claim will enable you to reduce your PAYG instalments.
Another question is can I defer any tax liability
As a business owner, you are able to apply to defer any tax liability that became due after 23 January 2020, but liabilities before that date may still be chased and have interest and penalties charged. We can assist in having those charges remitted in due course.
If you are a small business employer liable for payroll tax, you do not need to make payments for March 2020 through June 2020. The liability for FY2020 will still be calculated as normal, and once fully calculated after 30 June 2020, the liability for the whole year will be reduced by 25%, with any remaining liability becoming due upon lodgement of the annual reconciliation. No guidance has yet been issued in respect of ongoing lodgement requirements.
The media has stated that payroll tax is abolished, this is not true. If you make payroll tax payments contact us for help
Are you concerned about trading whilst your company is potentially insolvent? Or are you considering liquidation?
We’ve been asked as an individual, employee and PAYG tax payer is there any help
If you pay PAYG instalments and your income for the whole of FY2020 is going to mean you have overpaid instalments, you may be able to obtain a refund of those instalments already paid.
If you are an employee who remains employed on reduced hours, you may be able to apply to reduce the amount of tax your employer deducts from your pay.
If you owe land tax, there have been no announcements to date affecting those liabilities or payment dates etc.
Another question we’re asked is as a business is there cashflow relief for me
If you are an employer considering making staff redundant, reducing their hours or otherwise conspiring to reduce the payroll in some manner, we may be able to assist in guiding you through the minefield. Please contact us asap in this regard.
The government is providing a 50% guarantee to the banking industry (and non-banks) on some new short term unsecured lending to SMEs to assist with the current crisis, of up to $250,000, and encouraging the institutions to make funds available.
A lot of questions have focused on helping with apprentices and trainees
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020, and this subsidy will be available to a new employer where the business is unable to retain an apprentice.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee (i.e. $7,000 per quarter)
Eligible small businesses are those employing fewer than 20 full-time employees who retain an apprentice or trainee (with the apprentice or trainee being in training with a small business as at 1 March 2020)
We’ve had a number of questions about rent abatement
You may wish to consider applying for a rent abatement sooner rather than later. We can assist with draft letters and guidance, in advance of you contacting your landlord. This may be commercial or residential, although the guidance from the government so far specifically encourages commercial landlords to look favourably. We can also assist in negotiating with your landlord for you.
Another question is can I access help with mortgages, superannuation, council rates and sickness allowance
You are able to defer commercial mortgages and loans for up to 6 months by request.
You may also be able to defer home mortgages for up to 6 months.
You may be able to release up to $10,000 of your personal Superannuation for the FY2020 and FY2021 years without tax consequence.
There appear to be no current announcements in respect of Council Rates abatements.
Waiting times for a government sickness allowance will be waived for casual workers forced into self-isolation.
Take care everyone and please call me if you would like help with this!
0405 510 380