Today, the federal Government released details of the second round of stimulus payments for small business. The second round of stimulus payments include the following measures:
Most small business who are employing people will receive between $20,000 to $100,000 tax-free over the next six months. The payments are likely to be made as rebates against the activity statements lodged over the next few months. Sadly, the earliest these rebates will be applied or paid is 28 April 2020.
As a result, we expect many clients will want to get their March 2020 business activity statement (BAS) lodged as soon as possible. If you wish to have your rebate applied quickly, please ensure your BAS information is provided to us no later than 12 April 2020. Information for your March 2020 BAS is not due with us until the end of April 2020, however the earlier we receive it, the earlier we can get your BAS processed. The rebate will not be applied until your BAS is lodged.
Please note that if you have an existing BAS debt with the ATO, it is likely that the rebate will be applied to this debt first, however we will have more details on this when legislation is finalised.
For those clients operating their business through a discretionary trust, commencing a salary rather than taking a trust distribution for you may be more advantageous. We will be in touch over the coming weeks once we have the fine print on the legislation if you are in this category and we prepare your BAS. If you operate your business through a discretionary trust and do not pay yourself a salary, we strongly recommend you contact us before lodging your BAS.
This measure allows small business to take advantage of loans up to $250,000 that are 50% underwritten by the Government. These loans will run for three years, and be repayment free for the first six months.
More information on these loans can be found here.
We urge our clients to contact DW Mathers & Co. once further details of these loans are made available to discuss the appropriateness of them to their business.
For those who has an account based pension in their SMSF or superannuation fund during the Global Financial Crisis (GFC) may recall the Rudd Government’s reduction in the minimum pension drawdowns required during this period.
We are very pleased that the Morrison Government has announced a similar measure that will apply to pension drawdowns during the 2019-20 and 2020-21 financial years.
For more information on these reductions and the potential suitability to you, please contact Future Key Financial.
Up to $10,000 for the 2019-20 and 2020-21 financial years may be able to be released from superannuation tax-free for eligible Australians. To be eligible, sole traders and employees will need to demonstrate that they have lost 20% if their income or hours worked.
We urge everyone considering this measure to consult your financial adviser prior to doing so. Drawing down funds out of superannuation at a time when markets have suffered significant falls may not be the best strategy for you. If you do not have an existing financial adviser, contact Future Key Financial.
This is not a complete list of measures announced, for any specific queries, please do not hesitate to contact us.
We expect a third round of stimulus in the near future.