If you’re reading this, it probably means that you, or somebody close to you, is…
Jarrod Rogers CPA
3 April 2020
Yes, it’s another update from us on government stimulus. However, every new week is a new tax law, and as businesses owners, we all need to keep up to date.
You would have heard of Job Keeper in the news.
Here is the fact sheet: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employers.pdf
The 30 second summary is:
- It is $1,500 per fortnight
- It is now law, so you can’t apply for it yet, but you have to register your interest here.
- You can apply if your business has dropped by 30% compared to the same month last year (compare March 2020 to March 2019, for example
- Sole traders are eligible (hopefully the sole traders got our separate mailout yesterday)
- Companies / trusts: the amount is taxable to your business, but when you pass it on to your employees, you get a deduction like you usually do for wages.
- Sole traders: the amount is taxable.
If you’re behind on tax or BAS, now is the ideal time to catch up on lodgments. If business is down, you will have time to deal with admin. And the ATO are already saying they’ll be lenient on penalties and payment plans.
PM’s comments today
Scott Morrison made some helpful suggestions in his press conference today.
If you want to keep employees on under Job Keeper, continue to pay them for the month of April. The payments start in May, but will be backdated.
He gave a good tip for businesses who don’t have the cash flow to pay April salaries: you should go to your bank. The banks (usually the bad guys in the economy) seem to be making an effort to support businesses. And the government have:
- Given banks extra cash flow for small business loans; and
- Relaxed some of the lending criteria for loans.
The effect of all that is that you should be able to get a loan (or an additional overdraft) to cover wages for April because the government is reimbursing $1,500 per fortnight in May.
He also encouraged commercial tenants and landlords to negotiate an arrangement, and gave one or two suggestions. If landlords are cutting rent by 50% or waiving rent for six months, for example, the tenant could agree to compensate them with a higher future rent, or a six month extension to the lease.
Basically, look for a win/win commercial arrangement.
I hope this helps.