NEW TAX MEASURES FOR AFFECTED BUSINESS IN AUSTRALIA: COVID-19 UPDATE
Due to a pandemic, the world has struggled with turmoil since the beginning of the year. With millions of cases around the world and hundreds of thousands of deaths, the deadly virus has devastated almost all countries and brought all activities to these territories to a halt.
Because of the imposed lockdowns, many countries are currently suffering from multiple economic consequences. The stock market is in a pinch, entrepreneurs are striving to keep their business afloat, massive unemployment, etc. This virus has really affected every human life in the world, from access to basic necessities to creating livelihood.
Everything in the market has been put on hold from products manufacturing to sales. The current economic situation has become somewhat similar to the 2007 to 2008 recession. Fortunately, apart from bookkeeping companies are doing their best to find methods to help businesses strive in these tough times, the Australian government also came forward to offer more benefits to help businesses in Melbourne and other parts of the country.
According to the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), compared to other countries, Australia is in an advantageous position due to its stable and strong economy and its government can even provide monetary assistance to businesses without the putting a dent on its debt instrument.
Here are the updated tax measures offered by Australian government to businesses affected by COVID-19:
- PAYMENTS FOR JOBKEEPERS
A reliable bookkeeper in Melbourne can help entrepreneurs get an understanding about the plan of the Australian government to pay employers who have been affected by the recent pandemic. For starters, from March 30, 2020, affected businesses will be able to claim compensation of about 1500 AUD for each eligible employee every two weeks.
Businesses who retain their talented or skillful workforce will be able to claim this wage subsidy for up to 6 months. Nevertheless, in order claim this compensation, businessowners are required by the government to submit proof of a thirty percent drop in their profit. Sole traders and charity workers in Melbourne may also claim this compensation even if they do not have staffs or employees.
Having an experienced bookkeeper by your side will make registering for the wage subsidy easier. These professionals will even help you send the required information to the Australian Taxation Office monthly. The businessowner may be included to compensate the qualified employees in full amount. On top of it, the eligible employees also need to be informed about the payment.
- BUSINESSES AND NFPS CASHFLOW IMPROVEMENT
The government will also provide and non-profit entities and small businesses in Melbourne with a temporary cashflow support. The government of Australia aims to help small and medium-sized businesses to keep their employees.
The amount of the tax-free cashflow will be between 20 to 100 thousand AUD. This will be paid promptly upon the submission of the business activity statements will be credited to the system of activities.
A reliable bookkeeper will be the best person to help you examine the criterion for eligibility so that you can have the tax-free cash flow credited into the business’ account right after the 28th of April 2020. Starting June 2020 to Sept 2020, eligible businesses will also receive additional cashflow boost.
- INSTANT ASSET WRITE-OFF INCREASE
Another measure offered by the Australian government is increasing the limit for instant asset write-off to about $150,000. Until 30th June 2020, businesses in Melbourne with less than $500 (five hundred) million annual revenue will now be able to claim the instant asset write-off.
This Australian government grant can be applied to both brand-new and second-hand assets installed from 12th Mar 2020 to 30th Jun 2020. From the 1st of July 2020, the threshold of about $1000 will be applied to small entities, which does not have more than $10 (ten) million annual turnover.
- BUSINESS INVESTMENT SUPPORT
The cost of depreciating assets has been deducted at fast-tracked rate as an incentive to entities that have less than $500 (five hundred) million annual revenue for the 2019-2020 and 2020-2021 fiscal year.
Get a better understanding of the advantages of the accelerated depreciation of the specific depreciating assets in Melbourne procured with the help of an experience bookkeeper. This will be applied only to qualified assets purchased and installed or utilised for the first time amid 12th Mar 2020 and 30th Jun 2021.
- OFFERING APPRENTICES AND TRAINEES SUPPORT
Eligible businesses will also be apply for wage subsidy of around fifty percent of the salaries paid to apprentices and/or trainees retained from the 1st of January 2020 to 30th September 2020. The purpose of this is to help small businesses retain young employees during the assessment period. A maximum of $21,000 per eligible trainee or apprentice for the subsidy, will be reimbursed to the qualified businesses.
In the event that a business is unable to keep the trainee or apprentice, the new employer in Melbourne can claim the wage subsidy. This aims to develop the skills of young employees in different industries.
- MODIFY YOUR PAYG INSTALMENTS
A bookkeeper in Melbourne can help you alter your Pay As You Go or PAYG instalment so as to help your business strive during these trying times. Businesses can also apply for refund for instalments paid during the 2019-2020 fiscal year. In addition, business that changes their PAYG instalments will not be penalised by the Australian Taxation Office or ATO.
In order to avoid the hassle of resubmitting your PAYG instalments alterations, it is best to get the help of your bookkeeper in Melbourne. This will ensure that all the alterations are correct and accurate. This will also help you get full control of your company’s finances since you are aware of how to better use these funds.
- GST REPORTING CYCLE ALTERATION
Businesses in Melbourne can also alter the cycle of their Goods and Services Tax reporting for the meantime. For example, an entrepreneur can quickly get their GST refunds, if they adjust their filing cycle to monthly reporting.
With the help of knowledgeable bookkeeper in Melbourne, an entrepreneur can make the changes at the start of the quarter, without having the need to modify the cycle of their PAYG withholding report. A bookkeeper will even help the businessowner report monthly for 12 months and change the cycle back to its original period after it is complete.
Take note thought that if you are planning to change to monthly GST reporting, then you are required to claim the credits for the fuel tax on a monthly basis.
- PAYMENT DELAYS
With the severe effects of COVID-19 in Melbourne businesses, affected entities can get in touch with the Australian Taxation Office to let them know about the company’s condition due to the pandemic. Aside from finding out about the challenges you are facing, the ATO will also offer assistance by allowing you to defer your lodgment of your excise payments, FBT and income tax deadlines to 12th of September 2020.
The ATO will also stop the accumulation of interest on tax liabilities and entering a payment scheme with low interests. The government agency may also decide on reducing penalties and interest imposed after 23rd January 2020. Nevertheless, entrepreneurs are required to meet their obligations to their workforce’s super guarantee.
The condition of the global economy has not been very good since the pandemic ravaged every country in the world. Nevertheless, each countries’ governments, especially the Australian Government are providing various means to help small businesses and make sure that they will be able to get through this pandemic. If you are an owner of a small business, be sure to take advantage of all the benefits mentioned above, with the help of a bookkeeping company in Melbourne, so that your business can thrive through the COVID-19 emergency.