$17.6 Billion Economic Stimulus Package – What’s in it for your business

The government has announced a $17.6 billion stimulus package and the measures announced will apply to most of our business clients.

These measures have been announced to start immediately however do need to pass through legislation. Its expected that the legislation will be passed in the next two weeks.

An explanation of the business measures announced are below:

Instant Asset Write Off
The instant assets write off threshold will increase from $30,000 to $150,000 for businesses with turnover of less than $500m. This means an immediate tax deduction for business assets purchased. This proposal will apply from 12 March 2020 to 30 June 2020 for new or second hand assets first used or installed and ready for use within this period. Business plant and machinery, office equipment, vehicles and any other business assets will qualify for the write off. Keep in mind that the depreciable cost limit rules still apply to vehicle purchases. The threshold also applies on a per asset basis.

Business Investment Scheme
Business with a turnover of less than $500m will be able to deduct 50% of any asset purchases in the year of purchase. This will apply from 12 March 2020 to 30 June 2021. There is also no limit on the value of the asset purchase.

Cash Flow Boost ($2,000 – $25,000 payments)
Will be available for those business that have less than $50m in turnover and employ staff between 1 January 2020 and 30 June 2020. We are yet to receive all the information on this measure however is expected to be available through the Business Activity Statements and Instalment Activity Statements between March and June 2020. Eligible businesses will receive a credit equal to 50% of their PAYG tax withheld for the period 1 January 2020 to 30 June 2020. For those businesses that do not have any PAYG withholding however employ staff, they will receive a minimum of $2,000 It is expected that the ATO will deliver refunds within 14 days.

Apprentice and trainees subsidy
Employers with less than 20 full time employees will be able to apply for a wage subsidy of 50% of the apprentices or trainee’s wage for up to 9 months (from 1 January 2020 to 30 September 2020.

As always, every business is different and circumstances vary in the way that these measures will apply for each business. If you have any questions as to how the measures will apply in your particular circumstances or business, please contact our office.

Dendra Accounting Group – Melbourne Business Accountants
1-3 Ruby St, Burwood East VIC 3151
Ph: (03) 8877 2500