Preserve your Cash
For hints and tips on how to preserve your Small Business Cashflow, check out our Cashflow Series here.
Early Access to Super
The government is allowing individuals affected by COVID-19 to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21. Individuals will not need to pay tax on amounts released and will not need to include it in their income tax return.
To apply for early release, you must satisfy the requirements and you should take care to ensure that it it meets your longer term objectives.
Do you have apprentices?
If you have apprentices, there is a concession called ‘Supporting Apprentices and Trainees’ – for further information on the eligibility for the Federal Government please see below. You will have to apply for this payment. Here are some links for further information on the application process:
Employers can register from the 2nd April 2020.
All claims must be finalised by 31st of December 2020.
Pay payroll tax in Queensland
As at 23rd March 2020 you still need to apply for the relief package to defer paying Payroll Tax
More information to come as this is currently being updated.
Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. This will only apply to businesess with a turnover of up to $50 millions. The Government will provide eligible lenders with a guarantee for a loan with the following terms:
- The maximum loan size will be $250,000 per borrower.
- The loan will be up to three years with an initial six month repayment holiday.
- The loans will be in the form of unsecured finance
The loan is still subject to the bank’s own lending criteria and as such this should not be relied upon as a form of guaranteed funding.
Queensland Government - COVID-19 Jobs Support Loans
Low interest loans of up to $250,000 are available to assist with carry-on expenses such as employee wages, rent and rates and other related expenditure. Eligible business types include sole traders, partnerships, private and public companies and Trusts.
All COVID-19 Jobs Support Loans will be provided for a term of 10 years, with no repayments or interest charged for the first year, followed by two years of interest only payments. Principal and interest repayments will commence after the third year for the remainder of the loan term.
A fixed interest rate of 2.5% per annum applies to loans over their term except for the first year when the loan is repayment free and no interest is charged. The next years are interest only, followed by principal and interest repayments on remaining term of the loan.
Know your obligations as an employer.
The following links are to Government sites explaining your obligations as an employer. Effective the 23rd March 2020 the Federal Government has implemented a forced closure of non-essential businesses – this may trigger a number of stand down clauses in your employment contracts. You should review your employment contracts and the following sites. If you still have any doubt please contact a solicitor specialised in employment law.
- www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws .This site is updated regularly at the moment to add additional FAQ. If you have an urgent enquiry contact them directly on 13 13 94 and select the prompt for the Coronavirus hotline.
Kindly note that FairWork is linking to the Safework Model Rules as far as employer obligations surrounding health matters and working from home.
Recommended Resource - Employsure
The 6 things that you can do right now for your business:
- Update your financial statements – you don’t know when you might need them to apply for government economic incentives or cash flow loans
- Undertake a Risk Management Review of the impacts on your business and estimate the financial impact
- Perform a financial health check
- Re-Do your Budget
- ACT NOW to improve your Cash Flow
- Quickly Adapt your Business to Change
The JobKeeper Payment is a wage subsidy that will be paid through the tax system (i.e., it will be administered by the ATO) to eligible businesses impacted by the Coronavirus.
Under the scheme, eligible businesses will receive a payment of $1,500 per fortnight per eligible employee and/or for one eligible business participant (i.e., an eligible sole trader, partner, company director or shareholder or trust beneficiary).
The subsidy will be paid for a maximum period of six months (i.e., from 30 March 2020 up until 27 September 2020). It will be paid to eligible businesses monthly in arrears, with the first payments to employers commencing from the first week of May 2020.
The JobKeeper Payment will ensure that eligible employees (and, where applicable, eligible business participants) receive a gross payment (i.e., before tax) of at least $1,500 per fortnight for the duration of the scheme.
This was originally released as tax-free payments of up to $25,000 for eligible small and medium businesses (i.e., with a turnover of less than $50 million that employ staff) based on their PAYG withholding obligations. This is not a cash payment, but it is a credit equal to 50% of the PAYG amounts withheld from salary and wages paid to employees.
This has been enhanced with the Federal Government’s release on the 23rd March 2020 now providing up to $100,000 to eligible small and medium businesses and not for profits that employ people, with a minimum payment of $20,000. Employers will now receive a payment equal to 100% of the PAYG Withholding component (up from the original 50%). The timeframe for this payment will also extend through until the September 2020 reporting period (to be lodged in October 2020).
There are some specific qualifications and eligiblility requirements that relate to this payment and as such it is recommended that you review the examples provided by the Government to see how it may apply to your situation. Click here for the Fact Sheet (Examples start on page 3)
Businesses that lodge activity statements on a quarterly basis will be eligible to receive the credit for the quarters ending March 2020, June 2020 and September 2020. Businesses that lodge on a monthly basis will be eligible for the credit for the period commencing March 2020 through to September 2020 lodgements.
Apprentices & Trainees
If you employ an apprentice or trainee you may be eligible for a 50% wage subsidy for wages paid during 1 January 2020 to 30 September 2020. You can register for this from early April 2020. The maximum reimbursement is $7000 per quarter per eligible apprentice or trainee (to a maximum $21,000 over the 3 quarters). The apprentice must have already been in training with the business as at the 1 March 2020.
The links to apply are in the section above (click here) or speak to your provider.
Increasing the Instant Asset Write-Off
If you are a business with turnover of less than $500 million – the instant asset write-off threshold has increased from $30,000 to $150,000. This will apply for any new or second hand assets first used, or installed ready for use, between 12th March 2020 until 30th June 2020.
A further ‘Backing Business Investment’ scheme is a time-limited 15-month investment incentive (through to 30 June 2021) that will operate to accelerate certain depreciation deductions. This measure will also be available to businesses with a turnover of less than $500 million, who will be able to immediately deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. As announced, this measure is proposed to only apply to new depreciating assets first used, or installed ready for use, between 12th March 2020 until 30th June 2021
Latest informatino from the Australian Tax Office regarding the Corona Virus
Most transactions are able to be done via the Centrelink App (using MyGov) The current payment will be delivered via Newstart or Sickness Allowances depending upon your situation. The earlier that you apply for this payment the better.
If you are terminating any employees, you will need to supply your employee with an Employee Separation Certificate.
In case the site goes down here is a PDF copy of the form – Centrelink Separation Certificate (Uploaded 23 March 2020) PDF
Manage Loans & Financing
The major banks and financial institutions have put into place their own series of measures to assist their customers, both SME and individuals.
Please remember to get in front of the issue – don’t wait until you have defaulted or are about to. That just adds to your own pressure. Instead take a proactive approach and talk to your bank. You are not alone.
Effective the 23 March 2020 there are a number of further deferrals that can be applied for on home loans, business loans and equipment loans. For some of these concessions you will need to contact your bank directly for the application process and some are being applied automatically. If you have any questions or concerns, it is strongly recommended you contact your Relationship Manager or the contact phone numbers below (kindly note that these were accurate at time of publishing and will be checked periodically).
Generally, some of the packages include deferred loan obligations, waiving of some fees, merchant fee relief, temporary increases in overdrafts, interest rate reductions and the possibility of working capital assistance.
General information is to speak to your Business Banker or Branch Manager. If you are Bendigo Bank customer you can contact their Mortgage Help Centre on 1300 652 146. If you are Adelaide Bank, you call 1300 650 259.
Telephone 1300 660 115.
There are a range of telephone contact points for BOQ and their customers and if your first port of contact is a Relationship or Branch Manager, then reach out to them. Otherwise, call 1800 079 866 which seems to be the primary contact point for Business, Finance and Specialist.
We will have videos for these on our sixty:forty social Pages in the coming days so keep an eye out, like our page and share.
Is it all getting too much?
If everything is getting too much, there are still a number of options that are available for you. These include entering into a Deed of Company Arrangement (DOCA) or other form of Debt Relief or ultimately, Liquidation.
As part of the Economic Stimulus Packages there have been a number of additional technical measures incorporated – these include an increase in the threshold for the issue of statutory demands and the time that companies have to respond to such demands. There will also be relief for directors from personal liability when the company is trading insolvent.
For more information on these matters or to obtain personalised advice you will need to contact a specialist liquidation firm to manage this process. Below are a few helpful resources.
- Resource #1 – DOCA – What is it and how does it work
- Resource #2 – Worrells on Liquidation https://vimeo.com/225497660
- Resource #3 – Worrells on Bankruptcy https://vimeo.com/178420500
- Resource #4 – Australian Financial Services Authority https://www.afsa.gov.au/
We recommend Worrells – click here to find their closest office.
Most importantly, don’t overlook your wellbeing!
We maybe are entering some unknown and challenging so it is important to also look after your mental health.