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LIV Guide to COVID-19 Government Stimulus & Support packages

The majority of government COVID support packages have now ceased.  This guidance provides an update on packages operational as at 30 March 2021.

Contents:

Commonwealth Support for Business

JobKeeper Payments

The JobKeeper scheme finished on 28 March 2021.  Monthly declarations for JobKeeper fortnights in March need to be completed by 14 April 2021 to receive final JobKeeper Payments.

Resources:

  • https://www.ato.gov.au/General/JobKeeper-Payment/

Accelerated depreciation for Small Business Entities

Accelerated depreciation is a depreciation method whereby an asset loses book value at a faster rate than the traditional straight-line method. Generally, this method allows greater deductions in the earlier years of an asset and is used to minimize taxable income.

Measures introduced in March 2020 provide an incentive to businesses with aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years, to deduct the cost of depreciating assets at an accelerated rate.

For each new asset, the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose. The usual depreciating asset arrangements apply in the subsequent income years that the asset is held.

Eligibility

To be eligible to apply the accelerated rate of deduction, the depreciating asset must:

  • be new and not previously held by another entity (other than as trading stock)
  • not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules
  • be first held on or after 12 March 2020
  • first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021.

Under the measures, different rules apply depending on whether or not an entity is using the simplified rules for capital allowances for small businesses.

If you are a small business with an aggregated turnover of less than $10 million, and you use the simplified depreciation rules, those assets over the instant asset threshold which are eligible for the accelerated depreciation are added to the general small business pool. You can deduct an amount equal to 57.5% (rather than 15%) of the business portion of a new depreciating asset in the year you add it to the pool. In later years the asset will be depreciated as part of the general small business pool rules.

Resources:

Simplified Debt restructuring

The Government has made changes to Australia’s insolvency framework to better serve small businesses, their creditors and their employees. As part of these changes, the Government has introduced a new, simplified debt restructuring process for eligible small businesses from 1 January 2021.

The process allows financially distressed small businesses to access a single, streamlined process to restructure their debts, while allowing the owners to remain in control of their business. This will support more small businesses to survive, meaning better outcomes for businesses, creditors, employees and the economy.

Further information for small businesses on how the new streamlined restructuring process will work and how to access it can be found in the factsheet.

Resources:

Victorian Government Response

Payroll tax refunds and deferrals

Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived.

Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year.

The State Revenue Office (SRO) will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.

These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year.

The Victorian Government announced on 10 July 2020 that the program will be extended and expanded. Eligible businesses with payrolls up to $10 million can defer their liabilities for the first half of the 2020/21 financial year.  Details of these announcement are still pending.

More information about the administration of these relief measures will be sent directly to eligible businesses by the SRO.

If you require further assistance, please call 13 22 15 or email: info@business.vic.gov.au