Source: Tax Accountant Melbourne
This
assistance will assist businesses to manage cashflow challenges and help
businesses retain their
employees. These two measures are designed to support employing small and
medium sized businesses and to improve business
confidence. The Boosting
Cash Flow for Employers measure also supports the
activities of not-for-profits (including charities) at a time where they
are facing increased demand for services.
The wage subsidy for
apprentices and trainees will help to ensure the continued development of the
skilled workforce.
Summary
The Government
is providing up to $100,000 to eligible small and medium sized businesses, and
not-for- profits (including charities) that employ people, with a minimum
payment of $20,000. These payments will help businesses’ and not-for-profits’
cash flow so they can keep operating, pay their rent, electricity and other
bills and retain staff.
On 12 March
2020, the Government announced the Boosting
Cash Flow for Employers measure. The measure initially provided up to
$25,000 to business, with a minimum payment of $2,000 for eligible businesses.
Small and medium sized business entities with aggregated annual turnover under
$50 million and that employ workers are eligible.
The Government has enhanced this measure as part of
the second economic response package.
Not-for-profit
entities (NFPs), including charities, with aggregated annual turnover under $50
million and that employ workers will now also be eligible. This will support
employment activities at a time where NFPs are facing increasing demand for
services.
Under the
enhanced scheme, employers will receive a payment equal to 100 per cent of
their salary and wages withheld (up from 50 per cent), with the maximum payment
being increased from $25,000 to
$50,000. In
addition, the minimum payment is being increased from $2,000 to $10,000.
An additional
payment is also being introduced in the July – October 2020 period. Eligible
entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments
they have received. This means that eligible entities will receive at least
$20,000 up to a total of $100,000 under both payments. This additional payment
continues cash flow support over a longer period, increasing confidence,
helping employers to retain staff and helping entities to keep operating.
The cash
flow boost provides a tax free payment to employers and is automatically
calculated by the Australian Taxation Office (ATO). There are no new forms
required.
Small and medium
sized business entities and NFPs with aggregated annual turnover under $50
million and that employ workers will be eligible. Eligibility will generally be
based on prior year turnover.
•
The payment will be delivered
by the ATO as an automatic credit in the activity statement system from 28
April 2020 upon employers lodging eligible upcoming activity statements.
•
Eligible employers that withhold
tax to the ATO on their employees’ salary and wages will receive
a payment equal to 100 per cent of the amount withheld, up to a maximum
payment of $50,000.
•
Eligible employers that pay
salary and wages will receive a minimum payment of $10,000, even if they are
not required to withhold tax.
•
The payments will only be
available to active eligible employers established prior to 12 March 2020.
However, charities which are registered with the Australian Charities and
Not-for-profits Commission will be eligible regardless of when they were
registered, subject to meeting other eligibility requirements. This recognises
that new charities may be established in response to the Coronavirus pandemic.
Eligibility - Additional payment
To qualify for
the additional payment, the entity must continue to be active.
For monthly
activity statement lodgers, the additional payments will be delivered as an
automatic credit in the activity statement system. This will be equal to a
quarter of their total initial Boosting
Cash Flow for Employers payment following the lodgment of their June 2020,
July 2020, August 2020 and September 2020 activity statements (up to a total of
$50,000).
For quarterly activity statement lodgers the additional payments
will be delivered as an automatic credit in the activity statement system. This
will be equal to half of their total initial Boosting Cash Flow for Employers payment following the lodgment of
their June 2020 and September 2020 activity statements (up to a total of
$50,000).
Timing - Boosting Cash Flow for Employers payments
The Boosting Cash Flow for Employers payment
will be applied to a limited number of activity statement lodgments. The ATO
will deliver the payment as a credit to the entity upon lodgment of their
activity statements. Where this places the entity in a refund position, the ATO
will deliver the refund within
14 days.
Eligible period
|
Lodgment due date
|
|
Quarterly
|
Quarter 3 (January, February and March 2020)
Quarter 4 (April, May and June 2020)
|
28 April 2020
28 July 2020
|
Monthly
|
March
2020
April 2020
May 2020
June 2020
|
21 April 2020
21 May 2020
22 June 2020
21 July 2020
|
Quarterly
lodgers will be eligible to receive the payment for the quarters ending March
2020 and June 2020.
Monthly lodgers will be eligible to receive the
payment for the March 2020, April 2020, May 2020 and
June 2020
lodgments. To provide a similar treatment to quarterly lodgers, the payment for
monthly lodgers will be calculated at three times the rate (300 per cent) in
the March 2020 activity statement.
The minimum
payment will be applied to the entities’ first lodgment.
Timing - Additional payment
The additional
payment will be applied to a limited number of activity statement lodgments.
The ATO will deliver the payment as a credit to the entity upon lodgment of
their activity statements. Where this places the entity in a refund position,
the ATO will deliver the refund within 14 days.
Quarterly
|
Quarter 4 (April, May and June 2020)
Quarter 1 (July, August
and September 2020)
|
28 July
2020
28
October 2020
|
Monthly
|
June 2020
July 2020
August 2020
September 2020
|
21 July
2020
21 August 2020
21 September 2020
21 October 2020
|
Quarterly lodgers will be eligible to receive the additional payment
for the quarters ending June 2020 and September 2020. Each additional payment
will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).
Monthly
lodgers will be eligible to receive the additional payment for the June 2020,
July 2020,
August 2020 and September 2020 lodgments. Each
additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment
(up to a total of $50,000).
Budget
impact
This measure is estimated to cost $31.9 billion over the forward
estimates period.
Sarah’s Construction Business
Sarah owns and
runs a building business in South Australia and employs 8 construction workers
on average full-time weekly earnings, who each earn $89,730 per year. Sarah
reports withholding of
$15,008 for her
employees on each of her monthly Business Activity Statements (BAS).
Under the
Government’s changes, Sarah will be eligible to receive the payment on lodgment
of her BAS. Sarah’s business receives:
•
A credit of $45,024 for the
March period, equal to 300 per cent of her total withholding.
•
A credit of $4,976 for the
April period, before she reaches the $50,000
cap.
•
No payment for the May period,
as she has now reached the $50,000 cap.
•
An additional payment of
$12,500 for the June period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the July period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the August period, equal to 25 per cent of her total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the September period, equal to 25 per cent of her total
Boosting Cash Flow for Employers payments.
Under the
previously announced Boosting Cash Flow
for Employers measure, Sarah’s business would have received a maximum
payment of $25,000.
Under the
Government’s enhanced Boosting Cash Flow
for Employers measure, Sarah’s business will receive $100,000. This is an
additional $75,000 to support her business and help her retain her staff.
Sean’s
Hairdresser Salon
Sean owns a
hairdresser’s salon on the Gold Coast. He employs 12 hairdressers, with average
salary of
$50,000 per
year. Sean reports withholding of $8,788 for his employees in each of his
monthly BAS.
Under the Government’s
changes, Sean will be eligible to receive the payments on lodgment of his
relevant BAS.
Sean’s business
will receive:
•
A credit of $26,364 for the
March period, equal to 300 per cent of his total withholding.
•
A credit of $8,788 for the
April period.
•
A credit of $8,788 for the May period.
•
A credit of $6,060 for the June
period, before he reaches the $50,000 cap. Sean will also receive an additional
payment of $12,500 for the June period, equal to 25 per cent of his total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the July period, equal to 25 per cent of his total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the August period, equal to 25 per cent of his total Boosting Cash Flow for Employers payments.
•
An additional payment of
$12,500 for the September period, equal to 25 per cent of his total
Boosting Cash Flow for Employers payments.
Under the
previously announced Boosting Cash Flow
for Employers measure, Sean’s business would have received a total payment
of $25,000.
Under the
Government’s enhanced Boosting Cash Flow
for Employers measure, Sean’s business will receive $100,000. This is an
additional $75,000 to support his business.
Tim’s
Courier Run
Tim owns and
runs a small paper delivery business in Melbourne, and employs two casual
employees who each earn $10,000 per year. In his quarterly BAS, Tim reports
withholding of $0 for his employees as they are under the tax-free threshold.
Under the Government’s changes, Tim will be eligible to receive the
payment on lodgment of his BAS. Tim’s business will receive:
•
A credit of $10,000 for the
March quarter, as he pays salary and wages but is not required to withhold tax.
•
An additional payment of $5,000
for the June quarter, equal to 50 per cent of his total Boosting Cash Flow for Employers payments.
•
An additional payment of $5,000
for the September quarter, equal to 50 per cent of his total
Boosting Cash Flow for Employers payments.
If Tim begins
with holding tax for the June quarter, he would need to withhold more than
$10,000 before he receives any additional payment.
Under the
previously announced Boosting Cash Flow
for Employers measure, Tim’s business would have received a total payment
of $2,000.
Under the
Government’s enhanced Boosting Cash Flow
for Employers measure, Tim’s business will receive $20,000. This is an
additional $18,000 to support his business.
Help for the Homeless Op-Shop
Help for the
Homeless, a registered charity, runs an op-shop to support its programs and
employs
5 part-time
workers with average income of $30,000 per year. It reports total withholding
of $3,510 for its employees for each quarterly BAS.
Under the
Government’s changes, Help for the Homeless will be eligible to receive the
payment on lodgment of its BAS as it is a charity. Help for the Homeless
receives:
SUPPORTING APPRENTICES AND TRAINEES
Summary
The Government
is supporting small business to retain their apprentices and trainees. Eligible
employers can apply for a wage subsidy of 50 per cent of the apprentice’s or
trainee’s wage paid during the 9 months from 1 January 2020 to 30 September
2020. Where a small business is not able to retain an apprentice, the subsidy
will be available to a new employer.
Employers will be reimbursed up to a maximum of $21,000 per eligible
apprentice or trainee ($7,000 per quarter).
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.
Eligibility
The subsidy will be available to small businesses employing fewer
than 20 full-time employees who retain an apprentice or trainee. The apprentice
or trainee must have been in training with a small business as at 1 March 2020.
Employers of any size and Group Training Organisations that
re-engage an eligible out-of-trade apprentice or trainee will be eligible for
the subsidy.
Employers will be able to access the subsidy after an eligibility
assessment is undertaken by an Australian Apprenticeship Support Network (AASN)
provider.
This measure
will support up to 70,000 small businesses, employing around 117,000
apprentices.
Timing
Employers can
register for the subsidy from early April 2020. Final claims for payment must
be lodged by 31 December 2020.
Further information is available at:
•
The Department of Education,
Skills and Employment website at: www.dese.gov.au
•
Australian Apprenticeships
website at: www.australianapprenticeships.gov.au
For further
information on how to apply for the subsidy, including information on
eligibility, contact an Australian Apprenticeship Support Network (AASN)
provider.
FOR MORE INFORMATION
For more information on the Australian Government’s Economic
Response to the Coronavirus visit treasury.gov.au/coronavirus.
Businesses can
visit business.gov.au to find out more about how
the Economic Response complements the range of support available to small and
medium businesses.
Source: Accountants Melbourne
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