As part of the government’s coronavirus response package, it has provided for the ATO to give administrative relief for some tax obligations for people affected by the coronavirus outbreak, on a case-by-case basis (see more here).
Business operatives affected by the coronavirus should contact the ATO to discuss relief options. Options include:
- deferring by up to four months the payment date of amounts due through BAS (including PAYG instalments), income tax and FBT assessments and excise
- allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
- allowing businesses to vary PAYG instalment amounts to zero for the April 2020 quarter; businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and
- working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
Employers will still need to meet their ongoing SG obligations for their employees.
The government announced the following two temporary measures to support business investment.
- Increasing the instant asset write-off: the instant asset write-off threshold will be increased from $30,000 to $150,000 and access will be expanded to include businesses with an aggregated annual turnover of less than $500 million (up from $50 million). The measure applies from 12 March 2020 to 30 June 2020 to new or second-hand assets first used, or installed to be ready for use in this timeframe.
- A 15-month boost to depreciation deductions: businesses with an aggregated turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation or capital allowance rules applying to the balance. This applies from 12 March 2020 to 30 June 2021 to new assets that can be depreciated under Division 40 (that is, plant, equipment and specified intangible assets, such as patents). It does not apply to second-hand assets, or buildings and other capital works depreciable under Division 43.
Cash flow assistance
The coronavirus package is to provide employers with an aggregated annual turnover of less than $50 million a tax-free payment equal to 50% of pay-as-you-go (PAYG) amounts withheld, with a minimum payment of $2,000 and a cap of $25,000 to be delivered as a credit upon lodgment of the employer’s activity statements with the ATO from 28 April 2020. More here.
Eligible businesses that pay salary and wages will receive a $2,000 minimum payment even if they are not required to withhold tax. The ATO will repay funds if this measure places the business in a refund position. Readmore