You will have seen many emails from us over the past weeks following each round of stimulus announced, at both the Federal and State level. While we applaud the government’s response to tackling COVID-19 in terms of its impact on SMEs, navigating the various packages has indeed been difficult and remains somewhat a moving target.
So now that the main rounds of stimulus are behind us, we have summarised all of the available relief in one easy checklist – to ensure you are aware of all stimulus available to get through this unprecedented time. As always, please consult with your professional adviser in respect of the below to assess eligibility and be guided through the process.
CharterNet Stimulus Checklist
|⬜||Lodge BAS and IAS on time to ensure the cash boost is applied to PAYG Withholding|
|⬜||Take advantage of the increased instant asset write off of $150,000|
|⬜||Defer ATO payments for GST/Tax and cash out income tax instalments previously paid|
|⬜||Defer bank loan repayments via mortgage relief|
|⬜||Consider and apply for a low-cost, government-backed loan|
|⬜||Defer payroll tax payments to October and secure 25% reduction (if applicable)|
|⬜||Assess eligibility and register for JobKeeper|
|⬜||Apply for a NSW Small Business Grant|
|⬜||Seek rental relief (waivers/deferrals) from your landlord (lessees)|
|⬜||Seek assistance in being able to provide rental waivers/deferrals (landlords)|
Further detail on each is as follows:
|RELIEF OPTIONS||QUICK RECAP||NEXT ACTION STEPS|
|Receive a boost to your cashflow||Employers will automatically receive a tax-free boost in cash flow between $20,000 and $100,000 from the ATO.
The ATO payment will be equal to 100% of tax withheld on salary and wages in the March to June 2020 period, between $10,000 and $50,000 with a further payment of the same amount in the July-October period (total of between $20,000 and $100,000).
|From 28 April 2020, the ATO will begin delivering credits through the activity statement system, when eligible businesses lodge their activity statements.
⬜ Lodge your activity statement promptly to receive the cash boosts.
⬜ If you are set up for quarterly reporting, you can apply to change to monthly reporting via the ATO.
|Take advantage of the increased instant-asset write-off threshold||The instant asset write-off threshold has been increased 5-fold from $30,000 to $150,000, on a per asset basis.
An immediate deduction can be claimed on any depreciable asset purchased either new or second-hand for your business, including plant & machinery, computers, laptops, tablets, office furniture and equipment and motor vehicles.
|⬜ Purchase asset & install it ready for use by 30 June 2020.
⬜ Include asset in your 2019/20 Tax Return and retain all purchase documentation and evidence of installation ready.
⬜ To confirm your eligibility requirements, read our blog here.
|ATO admin assistance
||Tailored support from the ATO on a case-by-case basis, including:
|Bank mortgage relief
||Defer repayments on eligible bank loans for up to six months.
Note this is a deferral (not a waiver) and unpaid interest is capitalised (added to the loan).
Eligible loans can include home loans, business loans, asset finance and investment loans.
|⬜ Visit your Bank’s coronavirus support page for business customers to confirm your loan is covered.
⬜ Apply for the 6-month extension by following the prompts or contacting your relationship manager.
⬜ Ask your bank when you are expected to pay these deferred repayments, the new timing of these payments will depend on the type of loan you have.
|Apply for a low-cost, government-guaranteed loan||You can apply for an unsecured loan of up to $250,000 with no repayments for the first six months.
The loans will have a term of three years and a reduced variable rate of approximately 4.5% p.a.
|To apply for one of these loans, contact your primary bank and apply directly.
⬜ Visit your preferred Bank’s coronavirus support page, navigate to New Loans and choose the $250,000 unsecured loan.
⬜ Prepare your application, including all documentation requested regarding impact as a result of coronavirus
⬜ Lodge Application
|Payroll tax deferral for all businesses + 25% reduction for businesses with < $10m wages||In NSW, payroll tax payers have the option of deferring their payroll tax payments until October 2020.
Any outstanding liability for the 2019/2020 financial year and the monthly payments for July, August and September periods will be deferred until October 2020.
Taxpayers will have the option of paying their outstanding liability in full or entering an instalment plan after October 2020.
Eligible businesses will also receive a 25-percent reduction in the amount of payroll tax the business would have had to pay for the year ended 30 June 2020.
|⬜ Ensure your payroll tax is lodged on time to ensure any waivers are applied.
⬜ Disclose all wages paid in your annual reconciliation for the year ended 30 June 2020. A 25-percent reduction in the amount of tax payable will then be applied.
|Relief to help you retain your employees||JobKeeper
If your revenue has declined by 30% or more compared to the same month or quarter in 2019 due to coronavirus, you may be eligible to apply for the JobKeeper Payment under the Basic Test, which would see the Government pay $1,500 per fortnight for each of your full time, part-time or long-term casual employees for up to 6 months.
Employers will need to pay eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment.
This will be paid to the employer in arrears each month. The first payments to eligible employers will commence in the first week of May 2020.
JobKeeper payments will be made for the fortnight commencing 30 March 2020 and continue until 27 September 2020 (13 fortnights). The payments will pertain to all employees on the books at 1 March 2020.
If employers do not continue to pay their employees the minimum $1500 per JobKeeper fortnight, they will cease to qualify for the JobKeeper payment.
For businesses not fitting the mould under the basic test of a 30% reduction in revenue, the JobKeeper Alternative Test is designed to support cases where there may not be an appropriate relevant comparison period and makes reference to seven specific circumstances.
These seven scenarios are intended to cover the common situations businesses might find themselves in. These are:
Detailed guidance is provided for how a comparison period is identified and comparison revenue calculated.
Once the revised comparison period is calculated, then the decline in turnover test (30%+) is applied as normal to the turnover test period i.e. March 2020, April 2020 or any future month/quarter from which JobKeeper claims can commence.
⬜ Register for JobKeeper and ensure STP enrolment completed as soon as possible (for April payments).
|NSW Small Business Grant||If your business or not-for-profit organisation has been impacted financially (75% or more) as a result of COVID-19, you may be eligible for the NSW small business support grant of up to $10,000.
The grant may only be used for unavoidable business expenses that are not supported by other government funding. These expenses include, but are not limited to utilities, council rates, telecommunication charges, professional advice, insurance payments, wages for employees not eligible for JobKeeper payments and other similar expenses.
|⬜ Apply online for the small business COVID-19 grant via the NSW Service website.|
|Seek rent relief as a tenant||Relief is available to SME commercial tenancies (including retail, office and industrial) where the tenant is eligible for the JobKeeper program.
The Government’s Code of Conduct (the Code) requires landlords to apply the following as soon as practicable and without delay:
|⬜ Commence discussions with your landlords as soon as possible in accordance with the Code
⬜ Agree a reduction or deferral of rent payable under the tenancy agreements during the COVID-19 pandemic and a subsequent recovery period.
⬜ Avoid discussion of an intention to stop paying rent as this does not fall under the guiding principles of the Code.
⬜ Formally draft and send letters to your landlord requesting a variation to the lease with respect to the rent relief arrangements discussed.
⬜ For further reading regarding the implications for Tenants & Landlords, read our blog here.
|Seek assistance in providing rent relief as a landlord||The Code, in its current form, is very tenant-friendly.
If you are a landlord with an SME tenancy, you are encouraged to seek bank mortgage relief such that loan repayments can be deferred for up to six months. You may also be able to access further relief on land tax and rates also made available via Revenue NSW.
It is important that you seek legal and accounting advice early on to assist you in negotiating with your tenants.
|Landlords are advised to carefully consider the practical issues that are likely to arise in the coming months.
Negotiating with Tenants
⬜ Request tenants to provide relevant information and evidence to demonstrate that the tenants are eligible for relief under the Code.
⬜ Verify information provided with the tenant’s accountant and bank and pay attention to non-tenancy related source of income, such as online sales.
⬜ Proactively engage legal advice to begin preparation of a lease variation which protects your interests while complying with the Code
Seeking relief from your bank
⬜ Contact your bank to request landlord relief from your financial covenants and payment obligations
⬜ For further reading, read our blog here.