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Government support for businesses impacted by COVID-19

On 12 March 2020, the government announced that they are going to help Australians experiencing difficulty as a result of the COVID-19 outbreak. Here is what you need to know. 

Enhancing the asset write-off

The instant asset write-off threshold is now increased from $30,000 to $150,000 for new or second-hand assets first used, or installed ready for use in the below timeframe. 

Eligibility: Businesses with aggregated annual turnover of less than $500 million (up from $50 million). 

Applies from: 12 March 2020 until 30 June 2020.

Backing business incentive

The government is introducing a 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions. A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost.

Eligibility: Businesses with aggregated turnover below $500 million and new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is, plant, equipment and specified intangible assets, such as patents). Does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Applies to: Assets acquired after announcement and first used or installed by 30 June 2021.

Boosting cash flow for employers

This measure will provide from $2,000 up to $25,000 back for eligible businesses, to provide temporary cash flow. This payment will be tax free and will be delivered by the ATO as a credit in the activity statement system from 28 April 2020.

Eligibility: Small and medium business entities with aggregated annual turnover under $50 million (generally based on prior year turnover) and that employ workers.

Applies from: March 2020 and June 2020 for quarterly lodgers, and March 2020, April 2020, May 2020 and June 2020 for monthly lodgers. 

For more information, please read the full announcement post here.

If you’d like to talk to a business specialist to see how best it applies to your circumstances, contact us today.