Tax information for businesses during COVID-19

QSuper has been there for you in the good times and the tough ones – for over 100 years. We’ve put together some important tax information for businesses and employers regarding the coronavirus (COVID-19).

Temporary relief options

The Australian Taxation Office (ATO) are offering a number of temporary relief options to help financially stressed businesses and may tailor solutions for eligible owners or directors of businesses that are currently struggling due to COVID-19.

Some of these options include the ability to defer or vary payments such as income tax, activity statements, pay as you go (PAYG) instalments, fringe benefits tax, and excise payments, for due dates up to 12 September 2020.

The Australian Government has also introduced temporary relief options such as the JobKeeper payment, the instant asset write-off threshold, and temporary cash flow boost support, which we have outlined below.

Cash flow boost

The Australian Government is also providing tax-free cash flow boosts of between $20,000 and $100,000 to eligible small to medium businesses that employ staff and have been affected by the coronavirus.

These cash flow boosts are delivered through credits in the activity statement system, and should equal the amount withheld from wages paid to employees from March to June 2020.

In order to receive the cash flow boost, eligible businesses must lodge their activity statements up to the month or quarter of September 2020. If you have deferred your lodgement, you will need to contact the ATO and provide further information to confirm your eligibility.

More information about the cash flow boost, including eligibility requirements, how to access, and case studies.

Instant asset write-off

The instant asset write-off is a government scheme where eligible businesses can claim an immediate deduction for the cost of a business asset in the year it is first used or installed. An example of this would be purchasing a company car.

Due to the coronavirus, the instant asset write-off threshold has increased from $30,000 to $150,000 for each asset, and access to this benefit has been extended to include businesses with an annual turnover of less than $500 million (up from $50 million).

These new thresholds are only available from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed in this timeframe.

Find out more about eligibility requirements, exclusions, limits, and case studies explaining the instant asset write-off.

JobKeeper Payment

The JobKeeper Payment program is one of a number of initiatives by the Australian Government to support businesses in keeping their employees and provide temporary relief during the coronavirus pandemic. It allows eligible employers, sole traders, and other entities, to pay their employees' a salary of at least $1,500 per fortnight.

The JobKeeper scheme was originally scheduled to run until 27 September 2020 however the Government has extended it to 28 March 2021, although payments will be reduced from 28 September 2020.¹

The Government has also adjusted the reference date for determining employee eligibility and to make it easier for organisations to qualify for the JobKeeper payment extension.

From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper payment will be required to reassess their eligibility with reference to their actual turnover. The JobKeeper extension will be available to qualifying businesses and not-for-profits until 28 March 2021.

For more information visit the ATO website.

Beware of scams

COVID-19 has brought an enormous amount of financial strain on hardworking businesses and there have been a number of reported scams offering relief options and asking for your personal information. The ATO advises that if you receive a phone call, text message, or email and you are unsure if it is real, contact your tax agent or the ATO directly.

Learn how to protect yourself from scams.

For more information

The ATO are currently offering a free webinar for small businesses to find out about the help and support available to them during COVID-19. It further explains many of the topics QSuper has outlined for you above.

The ATO also have a support page for individuals and employees.

Of course, if you need more information on how COVID-19 could affect you and your staff, we’re always here to help – just contact your Relationship Manager.

1 Media release 21 July 2020, https://www.pm.gov.au/media/jobkeeper-payment-and-income-support-extended