COVID-19 RESPONSE - A guide to support for Small Business

The Federal and State Governments as well as banks have come together to assist small businesses.

This is a guide that details the various stimulus package inclusions and other measures in place to help small business owners.

This document will be regularly updated and will track everything available to small businesses as a part of the COVID-19 response.

Last update: 23/04/2020 10:25am

FEDERAL GOVERNMENT COVID-19 RESPONSE PACKAGE

The Australian Government has thus far announced 3 Economic Stimulus packages to the sum of $325 billion.

1. JOBKEEPER PAYMENTS - FOR EMPLOYEES AND SOLE TRADERS

JUST ANNOUNCED - COVID-19 JOBKEEPER PAYMENTS.
The Federal Government has just announced COVID-19 JobKeeper payments to help businesses keep their employees connected to their business, so businesses are in a better position to bounce back when things return to normality.

$1500 per fortnight available to full time, part-time and casuals employed for 12 months or more. This payment is also available to Sole Traders.
These funds will be administered by the ATO to Employers to then distribute to their employees
Payments will apply to employees who were on payroll as of 1st March
Payments will flow from May 1 but will be backdated and back paid from today
If an employee was terminated or stood down after March 1 they will still be eligible, they will need to be rehired to be eligible for payment.
Business turnover needs to be reduced by 30% or more to be eligible for this scheme and based on comparing a current period of at least a month to the same period last year.
Where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus.
Will be linked to STP lodgements for employees and employers
The ATO will make payments to the employers monthly in arrears.
Employers will be required to report the number of eligible employees employed by the business to the ATO on a monthly basis
Please note legislation is yet to be passed on this but it is expected that it will be approved sometime next week

💡 How to apply?

Register your Interest here

Enrol from April 20th onwards here

The Australian Commissioner of Taxation has extended the time to enrol for the initial JobKeeper periods, from 30 April until 31 May 2020.

Find out if you’re an eligible Employer here

Applying the Turnover Test

Details on the Alternative Decline in Turnover Test

Find out if your employees are eligible here

Paying your eligible employees

JobKeeper Payment - Information for Employers

JobKeeper Payment - Information for Employees

JobKeeper Payment - Information for Sole Traders and other entities

Supporting businesses to retain jobs

Protecting integrity

Changes to the Fair Work Act

The Fair Work Act has been amended to support the implementation and operation of the JobKeeper wage subsidy scheme in Australian workplaces. The changes are temporary and will end on 28 September 2020.

JobKeeper Payment - Frequently Asked Questions

JobKeeper Payment - Employee Test Requirements

JobKeeper Payment - Employee Nomination Notice

JobKeeper Payment - Employee Nomination Notice form

Creating your own employee Jobkeeper Nomination Notice

JobKeeper Payment Rules

JobKeeper Payment Rules Explanatory Statement

JobKeeper changes to the Fair Work Act

Practical Compliance Guideline - JobKeeper Payment

Contact the team at BizWhiz Business Solutions TODAY so we can assist you with the registration process, application process and the calculations. We look forward to hearing from you soon.

2. RELIEF FOR COMMERCIAL TENANTS

The Government has announced a range of new measures to help renters.

Hold on evictions for renters

Evictions will be put on hold over the next 6 months for commercial and residential tenancies in financial distress, who are unable to meet their commitments due to the impact of the coronavirus.

Code of conduct for commercial tenancies

A mandatory code of conduct has been established to outline a set of good faith leasing principles for commercial tenancies.

Find out more here

3. BOOSTING CASH FLOW FOR EMPLOYERS SCHEME - 100% CASHBACK ON PAYGW

Legislation has been enacted to provide temporary cash flow support to small and medium businesses and not-for-profit organisations that employ staff during the economic downturn associated with COVID-19 (novel coronavirus). This will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees.

Small and medium-sized employers as well as Non for Profits that were active eligible employers as at 12 March 2020 will be provided a 100% tax-free ‘cash back’ of up to $50,000 (and a minimum of $10,000) on your PAYG Withholding on wages between 1 January 2020 and 30 June 2020.
For Quarterly BAS this means all of the PAYG is credited on your BAS lodgements and for monthly IAS this means 300% of the March BAS will be credited on your BAS lodgement
The minimum credit will be $10,000, even if the amount required to be withheld is zero. However you will not be eligible to receive any more cash flow boosts until your PAYG withholding exceeds $10,000 over the relevant periods
A second additional payment of up to $50,000 (and a minimum of $10,000) on your PAYG Withholding on wages will also be paid for the period 30 June 2020 - September 2020.
This second payment is equal to the first payment, split evenly over the June-20 to September-20 BAS/IAS lodgement period.
The additional payment makes the total package at least $20K and up to $100K
It's important to recognise that the 'Boosting Cash Flow for Employers' scheme doesn't represent cash in hand (unless you were due a refund on your activity statement) but rather a reduction in your liability owing to the ATO sitting on your balance sheet.

💡 How to apply?

Check your eligibility and find out more information here

Boosting Cash Flow for Employers Fact Sheet

This credit will automatically be processed upon lodgement for your BAS and IAS. Your accountant and/or bookkeeper will process it for you.
Use this worksheet to calculate your incentive ('make a copy' that you can edit)
Watch this video for a tutorial on how to use the worksheet

NB: The above worksheets and video have been provided by SBO Financial and we have their permission to share these.

4. SUPPORT FOR APPRENTICES AND TRAINEES - UP TO $21,000 PER EMPLOYEE

The Government is supporting small businesses to retain their apprentices and trainees. Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia

If you employ an apprentice or trainee you may be eligible for a wage subsidy of 50% of their wage paid from Jan 1 2020 to Sep 30 2020
They must have been in training as at March 1st 2020
There must be less than 20 employees in the business
Registration from April 2020 with claims lodged by Dec 31 2020

💡 How to apply?

Eligibility and applications to be done via the Australian Apprenticeship Support Network
Find out more information here

Supporting Apprentices and Trainees Fact Sheet

5. CASH FLOW LOANS FOR SME’S - 50% GOVERNMENT GUARANTEE

Across the economy, many otherwise viable small and medium sized businesses are facing significant challenges due to disrupted cash flow. At the same time, businesses retain fixed obligations including rent, utilities, and employee expenses. The Coronavirus SME Guarantee Scheme will provide support for these businesses.

SMEs with a turnover of up to $50 million will be eligible to receive these loans. The Government will provide eligible lenders with a guarantee for loans with the following terms:

Maximum total size of loans of $250,000 per borrower
Loans up to 3 years, with an initial six month repayment holiday
The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.
The Government will encourage lenders to provide draw down style facilities meaning interest is only paid on what you use
The Scheme will commence by early April

💡 How to apply?

Read more about the Government's Scheme to support the flow of credit
Contact your bank/lending institution on the links under Banks Hardship Assistance about this package and refer to the ‘Coronavirus SME Guarantee Scheme’.

6. ATO HARDSHIP RELIEF

THE ATO is providing businesses a number of relief measures at this point in time in responses to the economic impact of the COVID-19:

Offering to remit interest and penalties incurred after Jan 23 2020
Deferring payments by up to 6 months through Business Activity Statements, income tax assessments, fringe benefits tax assessments and excise.
Allowing businesses to reduce their PAYGI instalments amounts to zero in March
Allowing refunds on PAYGI instalments paid so far in this financial year
Offering low interest payments plans
NB: These measures aren't automatically applied

💡 How to apply?

Call the ATO Emergency Support Line on 1800 806 218 to discuss your situation
Contact your accountant
Read more here ATO’s dealing with disaster

7. TAX INCENTIVES FOR SMALL BUSINESSES

If you were planning on buying assets for the business, now might be the ideal time with the asset threshold for immediate deduction being lifted as well as accelerated depreciation deductions which will reduce your businesses taxable income.

The immediate deduction threshold has been increased from $30,000 to $150,000
This applies for assets purchased from Mar 12 2020 to Jun 30 2020 and can be for new or second-hand assets first used or installed for use between those dates
The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets
Available to businesses with annual turnover under $500 million
Assets over $150,000 will attract an additional 50 percent depreciation rate of the asset cost in the year of purchase for assets purchased between 12 March 2020 and 30 June 2021
These are tax incentives, so you need to spend money and pay income tax in order to benefit and you won’t see this benefit until you lodge your 2020 and 2021 returns.

💡 How to apply?

Your accountant will process these deductions for you
Read more information about this here
Delivering support for business investment

8. TEMPORARY RELIEF FOR BUSINESSES TRADING INSOLVENT

The economic impacts of the Coronavirus and health measures to prevent its spread could see many otherwise profitable and viable businesses temporarily face financial distress.

It is expected that businesses will be significantly impacted financially during this period and certainly until we can return to normal business operations. Therefore the likelihood of receiving statutory demand letters by creditors may also increase. The Government has therefore implemented a safety net to lessen the threat of actions that could force businesses to wind up. They have done this by:

Increasing the minimum amount for which creditors can issues a statutory demand from $2,000 to $20,000
increased the time given to you to reply to a statutory demand from 21 days to 6 months
Increased the threshold for a creditor to initiate bankruptcy proceedings, the time to respond, and the period of protection
Relief for directors from personal liability when trading insolvent

9. NOT-FOR PROFIT ORGANISATIONS

The Government is providing vital support for Not-for-Profits (NFPs) to withstand the economic impacts of the Coronavirus.

Support for Not-for-Profit Organisations

QUEENSLAND STATE GOVERNMENT COVID-19 RESPONSE

1. INTEREST FREE LOANS

Applications are now open for the Queensland Government’s $500 million COVID-19 Jobs Support Loan scheme. This scheme is for Queensland businesses and non-profit organisations financially affected by COVID-19 to retain employees and maintain their operations.

$500 million loan scheme
Maximum loan up to $250,000
No repayments or interest charged for the first year
Plus two years interest only
2.5% fixed interest rate
10-year term of loan
Open until 25 September 2020 or until funding is fully committed.

💡 How to apply?

Apply Online here

VICTORIAN STATE GOVERNMENT COVID-19 RESPONSE

1. PAYROLL TAX CONCESSIONS

Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived.
Eligible businesses must continue to lodge returns but do not need to make further payments for the 2020 financial year.
The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.

💡 How to apply?

The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.
Expect an email from them!

2. BUSINESS SUPPORT FUND

The Victorian Government has launched a $500 million Business Support Fund to help small businesses survive the impacts of the coronavirus (COVID-19) pandemic and to keep perope in work.
The fund is part of the Victorian Government's 1.7 billion Economic Survival Package. Eligibility and application guidelines apply.
Funding of $10,000 per business is available and will be allocated through a grant process.
Small businesses in Victoria are eligible if they:
- employ staff
- have been subject to a closure or are highly impacted by Victoria's shutdown restrictions announced to-date
- have a turn-over of more than $75,000
- have payroll of less than $650,000
- hold an Australian Business Number (ABN) and held that ABN at 16 March 2020 (when the State of Emergency was declared)

💡 How to apply?

Examples of what the grant funding could be used for include:
- Meeting business costs, including utilities, salaries, rent
- Seeking financial, legal or other advice to support business continuity planning
- Developing the business through marketing and communications activities
- Other supporting activities related to the operation of the business
Applicants are required to provide a copy of their most recent Business Activity Statement (BAS).

3. SUPPORTING TENANTS AND LANDLORDS THROUGH CORONAVIRUS

The Victorian Government has launched a $500 million package and is reforming commercial tenancy laws to support tenants and landlords through the coronavirus pandemic.
These include: