Wondering how to get financial support for business? You’re not alone. Here’s what’s available.

The coronavirus outbreak is creating a challenging environment for businesses. Workers are staying home, many businesses have been forced to close or modify how they do business and business travel is completely off the table. No one knows when things will return to business as usual.

The Australian government is taking a strong approach to bolster businesses and shore up an economy that is struggling under the  COVID-19 pandemic. On 12 March and 22 March
2020 the government announced two separate economic stimulus packages designed to give Australia a $189 billion economic injection. Some of this is slated for businesses just like yours. Yes, even if you’re a sole trader.

The government is offering these measures because it wants businesses to keep spending – buying things like cars and industrial equipment – and continue to have cash flow to run their businesses and pay their workers. All of this will help boost consumption and stave off recession. So, here is how to get financial support for your business during COVID-19.

How to Get Financial Support for Business

Instant Asset Write Off (IAWO)

If you buy an asset for your business (such as a new
computer or a fleet car), the IAWO lets you immediately write off that amount
and claim it as a tax deduction. This hasn’t changed. But what has changed is
the amount of that write off.

Where IAWO used to be capped at $30,000 and only permitted for businesses that have an annual turnover of less than $50 million, those numbers have been vastly expanded. Now, until 30 June 2020, if your business has an annual turnover of up to $500 million, you can write off up to $150,000 (so now you might be able to grab that row crop tractor). This measure alone is expected to support more than 3.5 million businesses.

Backing Business Incentive

From now until June 2021 is a great time to consider a business investment. The government is currently offering incentives to business owners to encourage investment by accelerating the tax write offs you get through depreciation. Where you may have only been able to claim 15% depreciation in the first year previously, you can now deduct more than 50% of the value of new assets in the first year.

Boosting Cash Flow for Employers

The government is also giving up to $50,000 to eligible businesses in the form of credits on activity statements. This is designed to help small and medium businesses with cash flow. To be eligible you have to have an annual turnover of less than $50 million and have employees.

The full $50,000 is only available to businesses who withhold tax from the wages they pay. But even if you aren’t required to withhold tax, you may still be eligible to receive a $10,000 payment as a credit or a refund (if you’re entitled to one). This relief is only available until June 2020.

The government has also introduced an additional payment that will cover the period from July through October 2020. Under this payment, eligible businesses can receive an additional payment equal to the total of all the Boosting Cash Flow payments they received previously. In essence, if eligible, you could receive anywhere from $20,000 to $100,000 in payments.

These payments are automatically calculated by the ATO. You don’t need to do anything to receive them.

Temporary Relief for Financially Distressed Businesses

Businesses who are impacted by financial downturn brought on by coronavirus have a safety net in the form of protection from creditors. The government has increased the threshold at which creditors can issue a statutory demand on a company and provided relief for directors from any personal liability for trading while insolvent.

Supporting Apprentices and Trainees

If you have apprentices or trainees in your business, you may be eligible for a wage subsidy of 50% of the apprentice’s or trainee’s wages (up to $21,000 per worker). This measure will be available for nine months, from 1 January 2020 to 30 September 2020.

If a business isn’t able to retain their apprentices or trainees, but a new business takes them on, that subsidy will be available to the new employer as well.

Employers can register for the subsidy from 2 April 2020 but all registrations must be lodged by 31 December 2020. If this is something that you’d like to pursue, you can find more information and how to register at the Australian Apprenticeships website.

Sole Traders and Casuals

Sole traders and casual employees will also be able to access support in the form of a ‘coronavirus supplement’. This is a $550 maximum payment per fortnight. If you currently make less than $1,075 a fortnight you’ll be eligible for the full amount.

Also, if you’re a sole trader or casual worker and you’ve had your income or hours reduced by 20% or more you’ll also be able to access up to $10,000 of your superannuation tax free.

Other Reponses

The government is also offering other economic support to business owners during this time. For example, you can organise to defer some payments or vary instalments that are otherwise due. You can also elect to change your GST reporting and payment to a monthly schedule which will give you quicker access to GST refunds. You can vary your PAYG instalments or claim a refund for previous instalments paid. The ATO will also consider remitting interest and penalties that you may have incurred after 23 January 2020.

And remember to consider your tax-deductible donations. At times of crisis, we’re all reaching out and helping each other.

Ask For What You Need

The most important support that the ATO is offering is to work with business owners. If you are struggling with your cash flow, getting behind with your tax or super obligations or just feeling overwhelmed, call the ATO at 13 28 66 or contact the Coronavirus Business Liaison Unit who can work with you to find a solution. Don’t wait, wondering how to get financial support for your business. Taking advantage of all these options as soon as possible will help you weather these difficult times.

If you have any questions about relief you’re eligible for or how to access it, get in touch. Our specialists are here to help.