Coronavirus stimulus package
Remco Marcelis
Fractional CFO for startups and scale ups | B2B SaaS metrics need | Co-founder Standard Ledger | Angel investor
We've been fielding quite a few queries about the Federal Government's coronavirus stimulus package, so we thought we'd put together a summary to help you understand how it could work for your business.
As always, please reach out if you want help (just book into our calendars using the links below). That includes modelling the potential impact of the coronavirus on your business, what you can do about it and also, what opportunities it might offer.
Take care,
Remco, Mike and the Standard Ledger team
Between $2000 and $25,000 of support
You should receive some financial support if you meet all the criteria:
- Annual turnover under $50 million
- Employ staff between 1 January and 30 June 2020
If you meet the criteria, you don't need to do anything. The benefit will be provided as a credit of up to 50% of your employee PAYG against the next few monthly Instalment Activity Statements (IAS) or quarterly business activity statements (BAS). It will be a minimum of $2000 in support, capped at $25,000.
This will start from the end-of-March lodgements. Despite the way some news reports have made it sound, it won't be a payout coming into your bank account but it will reduce the PAYG you'd otherwise have to pay, freeing up your cash to support your business in other ways at this time. The ATO has provided some good examples in its fact sheet.
Asset write off increase
If you buy an eligible asset (like a work vehicle or computer) worth up to $150,000 before 30 June, it can be an instant tax write off (increased from the previous $30,000 per asset limit).
Beyond 30 June this year, and until 30 June 2021, you can deduct an extra 50% of an asset cost in the year it was bought. See the ATO's fact sheet for more.
As always, we don't recommend buying assets for the sake of it. It's only tax and cost-efficient in the long run if it's something you actually need. You might also need to back up any short-term cash requirements with extra vehicle or asset financing through your bank. And don't forget to check the list of assets that do not qualify for the instant write off.
This is general advice only. Please reach out to us for tax or financial advice specific to your situation.
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