The Coronavirus will cause huge pain for business, with possible closures enforced by the government for many and a significant drops in sales for others. Many businesses may not survive, shattering lives and creating large ripple effects across the community. To help navigate the confusion we have put together a seven-step survival guide for businesses affected by Coronavirus.
Contact banks, key suppliers & landlords
The support of key suppliers, landlords and banks will be critical for many businesses.
- If you are now not going to be able to meet rent obligations, it’s important that you engage with your landlord or agent as soon as possible to negotiate a rent reduction or a rent-free period.
- Banks are also coming to the party with deferred loan repayments for up to 6 months on both residential and commercial loans.
- Suppliers are likely in the same boat, so communication is paramount to ensure relationships are maintained. Create a mini cashflow forecasts so you have a clear idea of what time and assistance you need.
Contact the ATO
The ATO have publicly announced they are here to help. Here’s what’s available:
- Deferring payments on any existing ATO payment plans for up to 6 months
- Revising PAYG instalments to nil and claim back any paid PAYG instalments from the September and December quarters.
- Converting Quarterly GST BAS lodgement to monthly BAS lodgements to get early access to entitled GST refunds.
- Remission of any ATO Interest and penalties applied from 23th January 2020.
- Deferment of BAS, PAYGI, Income Tax Assessments, FBT & Excise payments up to 4 months from payment due date
Maximise PAYG Withholdings (Stimulus)
The ATO is crediting PAYG Withholding for the January to June period up to $50,000, with a minimum $10,000 payment. They are then providing bonus payments up to $100,000, with a minimum $20,000 from June to September.
The stimulus is designed to help employers keep their employees in jobs. Business owners wages and salaries also help to boost PAYG withholdings to maximise available assistance and keep them afloat over the coming months.
I note, businesses must have been registered for PAYG withholdings prior to the 12th March 2020 to be eligible.
We are here to help to call us if you need some assistance with calculating PAYG withholdings
Early Access to Superannuation (Stimulus)
Individuals affected by the coronavirus can access up to $10,000 of their superannuation this financial year and another $10,000 in July – tax free.
You will be able to apply for early release of your superannuation from mid-April through the myGov website, however you must satisfy any one or more of the following requirements to be eligible:
- you’re unemployed
- you’re eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
- on or after 1 January 2020;
- you were made redundant
- your working hours were reduced by 20 per cent or more
- if you’re a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more.
People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Apply for a refund of Payroll Tax paid (Stimulus)
Whilst there may be some variation between states, the concept is the same.
In Queensland, simply log on to OSR, find your submitted returns, apply for the refund by selecting edit and select COVID-19 as the reason.
Apply for subsidies to retain Apprentices & Trainees (stimulus)
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.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020. Further information is available from Australian Apprenticeship Support Network (AASN) providers.
Details of AASN providers in each region is available at the Australian Apprenticeships website.
Call the team ABA Tax
If you’re not sure of your PAYG withholding status, need assistance with a cashflow forecast or simply have questions regarding any of the above. Call us. We are here to help.