The outbreak of the Coronavirus (COVID-19) poses a major threat to the health and well-being of the global community and a significant challenge for business. In response, Prime Minister Scott Morrison has announced a suite of measures aimed at stimulating the economy off the back of the World Health Organisation declaring the coronavirus a pandemic.
So, what are these measures and how will they affect you?
$750 cash payment
6.5 million people are expected to receive the payment, including 2.4 million pensioners. This includes people on the Age Pension, Newstart, the Disability Support Pension, Carers’ Allowance, Youth Allowance, Veterans’ Affairs payments, Family Tax Benefit and those holding a Pensioner Concession Card or Commonwealth Senior Health Card.
People who already receive these payments or hold these cards will get the cash automatically.
The instant asset write-off:
The package will see the government inject $700 million to increase the instant asset write-off threshold by five fold, rising from $30,000 to $150,000. Access to the write-off will also be expanded to include businesses with aggregated annual turnover of less than $500 million, up from $50 million.
The expanded measure will only run until 30 June 2020.
SME cash boost:
The government will also roll out a measure that will see businesses with turnover of less than $50 million receive payments of up to $25,000 tax-free, with a minimum payment of $2,000. These payments will be benchmarked to 50 per cent of the amount withheld on employees’ salary and wages, up to a maximum payment of $25,000.
Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax. The measure is expected to cost $6.7 billion and will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
Employers who lodge the BAS on a quarterly basis will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
Monthly BAS lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements, with a 150 per cent calculation in the March activity statement to provide the same treatment as quarterly lodgers.
More stimulus is expected to be announced so we will be sure to keep you updated.