To ensure the Coronavirus has minimal effect on the Australian economy, the Government has announced a $17.6 billion stimulus package to help support business investment and keep Australians in jobs.

Corona virus mask

Some of these initiatives will require careful and proactive planning to ensure you and your business maximise the incentives on offer during this short window. At Lucent, we can guide you through these key considerations.

Planning before June 30 is crucial to ensure you take advantage of every opportunity to legally minimise your tax liabilities each year

Everyone’s circumstances are different and Government incentives such as this one change regularly – which is why, at Lucent, we conduct a personal annual tax planning review for all of our tax clients as a standard inclusion

We normally begin this review in April anyway, however, in light of this latest stimulus package, we will start this now, to ensure all of our clients have sufficient notice to prepare and act where required, to maximise their benefit

Some of the key areas to consider are:

1. Instant Asset Write-Off increased from $30,000 to $150,000, until 30 June 2020

This provides an opportunity for any business that needs to purchase significant assets in their business, to consider bringing this forward in order to gain a tax deduction this financial year

The turnover threshold has also increased, expanding this opportunity to businesses who turnover up to $500 million per annum

Note, this will only benefit you if your taxable income is high enough to offset this deduction – hence, we recommend you seek our advice on this prior to making any significant asset purchases

2. Boosting Cash Flow for Employers

Eligible businesses that withhold tax to the ATO on their employees’  salary and wages will receive a payment equal to 50% of the amount withheld up to a maximum of $25,000

This payment will be tax-free and is for businesses with a turnover up to $50 million (based on prior year) who employ staff between January 1 and June 30, 2020

It’s important to note, this will be provided as a credit in the activity statements lodged from April 2020 to July 2020 and businesses will only receive a cash payment where the credit places the business in a refund position

We are awaiting further information on how this grant will be calculated and paid, however, once again, careful planning and advice around this will ensure businesses maximise their benefit

3. Supporting Apprentices and Trainees

Employers of apprentices and trainees will receive a 50% subsidy on all apprentice and trainee wages paid between January 1 and September 30, 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 and the apprentice or trainee must have been in training with the business as at 1 March 2020

4. Assistance from the ATO

Deferrals for up to 4-months on certain tax payments

Quicker access to GST refunds

Income tax instalment variations (to reduce the instalment amount payable)

Interest and penalty remissions and low interest payment plans on tax debts

For any of our clients that are experiencing cash flow difficulty, please do not hesitate to reach out to us, we are here to assist.

Speak to Rachael Turner about how to maximise the Coronavirus Stimulus incentives, or any other financial matters relating to your business:

Email:  rachael.turner@lucentadvisory.com.au
Phone: 08 8471 7007