To all our valued clients at L Jeffery Accountants,

As you are aware, the Federal Government has released the Stimulus Package Stage 2 as the financial impact of the Coronavirus escalates.  This package is forecasted for at least 6 months.

Our newsletter will outline the PAYG incentive that was introduced in the first stimulus package, in addition to new incentives introduced in the second package, with the intention of increasing immediate cash flow in businesses and households.

 

BOOSTING CASH FLOW FOR EMPLOYERS

This builds on the incentive in the first package, however, the credit given on PAYG withheld by the ATO has now increased from 50% to 100%.  Employers will now receive the full amount reported for PAYG withheld.  To be eligible, businesses must have reported their employee’s wages/salaries in their BAS’ prior to 12 March 2020.  As outlined in the first package the credit will be applied at the time of the BAS lodgement, however, it is not clear on how the ATO will calculate this.  The Government has extended the BAS periods into the new financial year.

 

CORONAVIRUS SUPPLEMENT

This supplement is to support all employees, self-employed and contract workers who have lost employment due to the Coronavirus.  Applications are made through Centrelink and are distributed through the Job Seeker Payment (previously Newstart).  The payments will start on 27 April and will be paid $550/fortnight for 26 weeks. As you may have seen in the media, the number of applicants at Centrelink have been astronomical and this could make the application process very stressful.

 

ACCESS TO SUPERANNUATION

Another way to access short term funds is through your superannuation.  Employees, self-employed and contract workers who have had their income or their amount of hours reduced by at least 20% will be eligible to access one payment of $10,000 prior to 30 June 2020 and another payment of $10,000 prior to 30 September 2020.  Applications can be made online through your MyGov account.  If you do not have a MyGov account, you can apply online.  As superannuation funds vary, the tax attached to these payments could differ however any taxable payments will be submitted through your tax return and any expenses associated with gaining employment are deductible.

 

DEFERRAL OF BUSINESS LOANS

The Reserve Bank of Australia (RBA) and the Big 4 banks have implemented a range of measures to support the economy during the following months.  Depending on your financial provider and the type of business loan you have, you could be eligible for a deferral on your loan on both principal and interest.  This could provide significant relief to businesses during this period.  If you require any interim financials when applying for deferrals, please contact our offices and we will forward these to you via email.

NEW BUSINESS LOANS

In addition to the deferral on existing business loans, the Government will guarantee 50% of any new loan in the event of a default as a result of the downturn from Coronavirus.  The loans are designed to provide additional credit to businesses.  Applicants are subject to the lender’s credit assessment applicable to an ordinary loan.  Again, if you require interim financials for this purpose please contact our offices and we will email these to you.

 

OTHER THINGS TO CONSIDER

The following are some suggestions that our accountants think you may benefit from as you navigate your way through the coming months.

 

SCAMMERS

As expected the scammers are busy as they exploit the vulnerability of people during these uncertain times.  The ACCC has reported that text messages are being circulated with links to access the Coronavirus Supplement.  Phone calls are also being made by scammers who are posing as financial institutions.

 

RECORDING ABNORMAL EXPENSES

Despite the current chaos around the world you can be comforted to know that our accountants are always interested in reducing your tax liability through business deductions.  Please remember to record any abnormal business expenses that you have incurred whilst restructuring your business during this crisis.

 

WA GOVERNMENT

The Western Australian government is developing policies to prevent evictions of commercial tenants, especially for small businesses.  Currently we advise you to discuss a reduction or a rent free period with your landlord while these policies are being put in place.