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COVID-19 Business Assistance

Start With The End In Mind


This week has seen a staggering escalation in Government announcements that are now heavily impacting on businesses, large and small, to operate effectively. Media generated hysteria has gone to another level and some seem to have lost all ability to think logically.

I realise you have been bombarded with Convid-19 articles but I wanted to outline some of the options and support available to your business that may help you as business gets more difficult and the economy goes into (partial) shutdown.

  1. Banks will defer loan repayments for small businesses affected by COVID-19 for six months

Australian Banking Association CEO Anna Bligh announced today a small business relief package from Australia’s banks, which will see loan repayments for small businesses affected by the coronavirus deferred by 6 months. 

She revealed that banks are putting in place a fast track approval process to ensure customers receive support as soon as possible.

“Over the last few days banks have worked closely with the Treasurer and the government to identify measures to support the economy through this crisis.

“Small businesses are the most vulnerable part of the economy and have the most urgent need for assistance,” said Ms Blight.

“Banks are already reaching out to their customers to offer assistance and packages will start rolling out in full on Monday”.

So it is imperative for any small business to contact your bank immediately and apply for loan repayment relief from Monday. Earlier this week we have found some major banks were offering a three (3) month repayment deferral but now seems like a six-month deferral is possible. We don’t know if any “proof” is required that your business has been affected Convid-19 as yet as this may vary from bank to bank.

No mention was made in this announcement of repayment deferrals on hire purchase and Chattel mortgage loans on assets. However, make sure you ask your bank if this relief package applies to those loan contract as well.

  1. ATO administrative relief a part of the coronavirus package

As part of the government’s coronavirus response package, it has provided for the ATO to give administrative relief for some tax obligations for people affected by the coronavirus outbreak, on a case-by-case basis.

Business affected by the coronavirus should contact the ATO to discuss relief options. Options include:

  • deferring by up to four months the payment date of amounts due through BAS (including PAYG instalments), income tax and FBT assessments and excise
  • allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
  • allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter; businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
  • remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and
  • working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.

However, Employers will still need to pay their ongoing Employee Superannuation Guarantee obligations on time as no relief has been offered on this.

Outside of business, the ATO will also work with individuals experiencing financial hardship, and their tax agents, and will apply appropriate tax relief measures for serious and exceptional circumstances, such as where people cannot pay for food or accommodation. Unlike the ATO bushfire relief measures, which applied automatically to particular geographic areas, assistance measures for those impacted by COVID-19 will not be automatically implemented.

Anyone affected by COVID-19 should contact the ATO to request assistance on its emergency support number 1800 806 218.

  1. NSW and Qld ramp up support for small business

Following Western Australia, NSW and Queensland have announced their own coronavirus response packages catered to small businesses.

The New South Wales government is allocating $2.3 billion designed to keep people in jobs.

A total of $450 million will go towards waiving payroll tax for businesses with payrolls of up to $10 million for three months, meaning that these businesses will not have to pay tax for the rest of the financial year.

The government has also allocated $80 million to waive a range of fees and charges for small businesses including bars, cafés, restaurants and tradies, as well as $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020–21.

Queensland offers $500m in loans

The Queensland Govt offered payroll tax deferral to small and medium businesses at the start of March but, unlike NSW who are waiving payroll tax for 3 months, Queensland are only deferring payment of payroll tax.

The Queensland government said it will create a new $500 million loan facility, interest free for the first 12 months, to support businesses to keep Queenslanders in work, while also extending the coronavirus payroll tax deferral to all businesses across the state.

The $500 million concessional loan facility would comprise loans of up to $250,000 with an initial 12-month interest-free period for businesses to retain staff.

As with the initial payroll tax deferral offer, the government confirmed that the Office of State Revenue will also work with affected businesses to create repayment plans for the deferred tax liabilities.

  1. Riding out the storm is about buying time

Building a buffer so you can pay for essentials. The bigger buffer you have, the more time you buy. The more time you have to ride out the storm, as it will turn around as they all have done so historically, the greater chance of business survival.

So look at your costs. Reduce costs, all unnecessary expenses. If it comes to it, you may ask staff to use up all leave such as annual, sick and or long service leave etc and or reduce days worked and if things are really bad, ask them to take time off without pay… A sharing of the pain across the team is always better than having to let team members go. Anticipate how long you believe the storm will last before things turn around and make sure you have the buffer to last that length of time.

As noted in our previous email the Federal Government and ATO will be starting the PAYG Withholding and Apprentice Subsidy cashback assistance from April which will help cashflow in a small way. There is likely to be further Federal Government small business cashflow assistance in the future if this crisis drags out so we will keep you updated as much as possible.
Business Interruption Insurance

I may be worthwhile reviewing your business insurance cover. Many business insurance packages in Business Interruption Insurance and are generally designed to cover events such as fire, flooding or theft where business operations are interrupted for an extended time.

I’m sure most insurance companies may have hidden clauses to exclude “pandemic” events designation by the world health organisation, but it will still be useful to explore a potential claim with your insurance advisor/broker. If they reject the claim you can then determine if it’s a legitimate reason and whether its open to challenge.

Please remember MyAccountants is here to help you in any way we can in this time so please don’t hesitate to contact us for help.