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Coronavirus Stimulus Package – New Jobkeeper Payment

The Federal Government has announced (as part of its Coronavirus Stimulus Package) the introduction of a new JobKeeper Payment to assist eligible employers (and self-employed individuals) who have been impacted by the Coronavirus pandemic to continue to pay their workers.

An overview of the package is as follows;

Ø Eligible Employers will be paid a subsidy of $1,500 per fortnight for each employee as part of a “job keeper payment” .⁣ ⁣

Ø Eligible Employers will need to register via the ATO website to receive the payments starting in the first week of May and will cover the next six months and backdated to March.

Ø Where an employer receives the JobKeeper Payment for an eligible employee who has been receiving income support through Centrelink (or Services Australia) as a result of having been stood down or their hours being reduced, the employee will need to report the JobKeeper Payment

as income, as this could affect their entitlement to such Centrelink support.

Ø If your workers have already been stood down they will be eligible for the allowance if they were on your books on March 1.⁣

Ø The payment will apply to part-time and full-time workers, sole traders and casuals providing they have been with you for 12 months or more.⁣

Ø Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. ⁣

Ø Eligible employers that apply for the JobKeeper Payment (i.e., via an online application) will need to provide supporting information demonstrating a downturn in their business, and must report the number of eligible employees employed by the business on a monthly basis.

Ø Businesses without employees (e.g., self-employed individuals) will need to provide an ABN for the business, nominate an individual to receive the JobKeeper payment and provide that individual’s Tax File Number, as well as provide a declaration on the recent business activity (presumably, to demonstrate the downturn in the business).

Initially, businesses can start to register their interest in applying for the JobKeeper payment from 30 March 2020, on the ATO’s website at www.ato.gov.au.

Eligible Employers

Ø for a business with a turnover of less than $1 billion – its turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month); or

Ø for a business with a turnover greater than $1 billion – its turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month); and

Ø the business is not subject to the Major Bank Levy.

Self-employed individuals (i.e., businesses without employees) and not-for-profit entities (including charities) that satisfy the above requirements will be eligible to apply for the JobKeeper Payment.

Eligible Employees

Ø The employee is currently employed by the employer (which includes an employee who has been stood down or re-hired after they had already lost their job).

Ø The employee was employed by the employer as at 1 March 2020.

Ø The employee is a full-time or part-time employee, or a long-term casual employee who has been employed by the employer on a regular basis for longer than 12 months at 1 March 2020.

The Proposed Jobkeeper Payment

Ø The employee is at least 16 years of age.

Ø The employee is an Australian citizen, or the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.

Ø The employee is not in receipt of a JobKeeper Payment from another employer.

To discuss how you and your business may benefit from the package as outline above please ring your point of contact at GM Tax.

FACTSHEETS COVID 19

A great concern for all individuals and households at the moment is the impact the Coronavirus will have on you and your household.

The Australian government is working through this difficult time to introduce various tax relief packages for Individuals and households affect by the Coronavirus.

Please refer to factsheets for further guidance. Coronavirus stimulus package - NTAA Update

Should you wish to discuss how these reliefs may affect you please speak with your contact at GM Tax.

Coronavirus – Small Business Tax Relief

A great concern for all small businesses at the moment is the impact the Coronavirus will have on your business and business around you.  The Australian government is working through this difficult time to introduce various tax relief packages for small businesses and those affect by the Coronavirus.

Small Business Stimulus Package

A summary below of the measures introduced so far.

  1. Instant Asset Write-off
  • A business with a turnover of less than $500 million per annum will receive an immediate tax deduction for any business related asset purchased up to $150 000 until 30 June 2020. The threshold will revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020, however businesses not entitled to the instant asset write off from 1 July 2020 may be entitled to the 50% investment incentive as below.
  • There is no limit to the number of assets you can purchase.
  • This applies to all assets bought between 12 March 2020 and 30 June 2020.
  • The benefit will be claimed when your 2020 tax return is lodged.

2. Investment Incentive

  • A business with a turnover of less than $500 million per annum will receive a tax deduction of 50% of the cost of the asset.
  • There is no threshold to the value of the asset that may be purchased.
  • There is no limit to the number of assets you can purchase.
  • This applies to all assets bought between 12 March 2020 and 30 June 2021.
  • The balance of the assets cost would be depreciated under the existing rules.

3. Tax-Free Payments for Employers

·         The Government is providing up to $100,000 to eligible small and medium sized businesses, and not-for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.

  • An eligible business has a turnover of less than $50 million per annum AND employs staff.
  • Eligible employers will initially receive 100% of the PAYG withholding tax for employees up to a maximum of $50,000 for the period 1 January 2020 to 30 June 2020.
  • A business that does not need to withhold PAYG tax because the salaries are too low will still receive $10,000 applied against the their account.
  • This money will not be included in taxable income of the business.

·         The payments will be available to active eligible employers established prior to 12 March 2020.

·         The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

  • An additional payment ‘is also being made in the July – October 2020 period. Eligible entities willreceive an additional payment equal to the total of all of the Boosting Cash Flow for Employers paymentsthey have received (again a maximum of $50,000).
  • This means that eligible entities will receive at least $20,000 up to a total of $100,000under both payments.

4. Apprentices and Trainees Support 

  • A business who employs apprentices and trainees AND employs fewer than 20 full-time employees.
  • A wage subsidy of 50% of the apprentices wage is paid up to a maximum per apprentice of $21 000.
  • This applies to wages paid from 1 January 2020 to 30 September 2020.
  • Employers will have to register for this claim from 1st April 2020.
  • An eligibility assessment will be conducted by an Australian Apprenticeship Support Network provider.
  • The benefit will be paid on a successful assessment.

5. ATO Administrative Relief

There are various tax payment allowances which can be applied which are specific to each business as follows;

  • Defer up to 6 months amounts owing from BAS returns.
  • Remit interest and penalties incurred after 23rd January 2020.
  • Vary PAYG amounts to zero.

The overall intention is to assist businesses with making payments to the ATO and we at GM Tax are here to assist you in anyway possible through this difficult time.

Should you wish to discuss any of the above issues further please call me.

Filing Deadline

The Australian filing deadline is fast approaching which am sure is the last thing you may be thinking about due to current crisis we are all facing.

We and the ATO urge you not to delay submission of your tax returns due to your inability to pay any tax liabilities that may arise as a result. Assistance is available from the ATO to defer payments and to vary installments that you may have due.

We at GM Tax are dedicated to assist you manage your filing and tax obligations through this difficult time.

Stay safe & well and together we shall work through this.

Working Safe During Coronavirus

We at GM Tax have a work from home policy. We have plans in place for our employees can work from home as the need arises.

Our offices remain open and we shall ensure that there will be no disruption to our service offering to you.

We are committed to providing a high level of service and continue to support you by phone and email through these challenging times.

Wishing you all health and continued prosperity.