Short Guide to Government Grants for business (COVID-19 related)

We will continue to update this page with resources as information comes through on new assistance for businesses impacted by COVID-19.

The outbreak of COVID-19 is having an overwhelming effect on the lives of you, your families, businesses and wider communities. 

We understand that as accountants, financial planners and finance brokers, we have an essential role during these times to support the community with the economic repercussions caused by COVID-19.

What is this guide about?

This guide will list succinct information regarding federal and state grants available for affected businesses during the COVID-19 pandemic. Details listed below include:

1. Federal COVID-19 grants and stimulus measures available for SMB’s
2. Western Australia: COVID-19 grants available to business
3. New South Wales: COVID-19 grants available to business

1. Federal COVID-19 grants and stimulus measures available for SMB’s

Last updated 09/04/2020

Government Tax Free PAYG Withholding Subsidy

The ATO will provide credits or cash payments of up to $100,000, with minimum payments of $20,000 for eligible businesses upon lodgement of the March 2020 Monthly or Quarterly and later activity statements.

To be eligible for these amounts your business must:

• Have an annual turnover less than $50 million
• Held an ABN from 12 March 2020 and remain active
• Made eligible payments to employees that require withholding (even if the amount withheld is equal to zero)

Businesses will get a credit of the PAYG withholding amount payable on employee wages up to the maximum $100,000.

• To provide similar treatment to quarterly lodgers, payments for monthly lodgers will be 300% of the PAYG withholding amount payable for the March 2020 activity statement.
• Businesses that are registered for PAYG withholding, even if they are not required to withhold tax, will receive a minimum payment of $20,000.
• Payments or credits are expected to begin appearing in the ATO activity statement accounts of eligible businesses between 28 April 2020 to October 2020.

Jobkeeper Payment for employees

Businesses impacted by COVID-19 can access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

The JobKeeper Payment will also be available to the self-employed.

Employers are eligible for the Jobkeeper Payment if:

• They have turnover less than $1 billion and turnover has reduced by at least 30% for at least one month; or
• They have turnover of $1 billion or more and turnover has reduced by at least 50% for at least one month; and
• the business is not subject to the Major Bank Levy.

To establish that a business has faced either a 30% (or 50%) fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months relative to their turnover a year earlier.

The Tax Commissioner has discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of COVID-19. The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances. A tolerance in good faith is being applied if the 30% (or 50%) fall in turnover estimated by an eligible business is not the actual experience in a businesses turnover.

An eligible employee is one that:

• are currently employed by the eligible employer (including those stood down or re-hired)
• were employed by the employer at 1 March 2020
• are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020)
• are at least 16 years of age
• are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
• are not in receipt of a JobKeeper Payment from another employer

Payments will be made to the employer monthly in arrears by the ATO, beginning in early May 2020.

Small/Medium Business Government Guarantee Loans

The Government will guarantee 50% of new unsecured loans made to eligible Small/Medium Businesses for the purposes of working capital for businesses with a turnover less than $50 million. The purpose of this is to make it more likely that banks and lenders will approve these loans.

The loans can be up to $250,000, will have a maximum term up to 36 months with no payments required for a 6 month period and require no collateral (are unsecured).

• Interest will only be charged on the drawn funds, meaning you only pay on the amount you use. You will still need to satisfy the particular lender’s borrowing criteria.
• These loans are expected to be made available in April 2020.

Due to the increased stresses on the banking system from its clients falling into distress from the fallout of COVID-19, loan assessments may take an extended period of time to process.

Instant Business Asset Write Off

The depreciating asset instant asset write off has been increased from $30,000 to $150,000 until 30 June 2020.

A new investment incentive applies until 30 June 2021 to allow a deduction equal to 50% of the cost of a new eligible asset with existing depreciation rules applying to the balance of the asset’s cost.

• Where the business is using a general small business depreciation pool an amount equal to 57.5% (rather than 15%) of the cost of the asset can be deducted.

2. Western Australia: COVID-19 grants available to business

Last updated 28/04/2020

• Small and medium businesses whose annual Australian Taxable Wages are between $1 million and $4 million will receive a one-off grant of $17,500. Grants will automatically be paid from July 2020.

• Payroll tax will be waived for a four-month period between March 1, 2020 to June 30, 2020 for small-to-medium sized businesses with Australia-wide annual wages of less than $7.5 million in 2019-20.
  • Employers, or groups of employers, with Australian taxable wages below $5 million at 29 February 2020, do not have to apply for the waiver – the payroll tax waiver can automatically be claimed by:
    • declaring WA taxable wages as normal in Revenue Online; and
    • recording the value of WA taxable wages as exempt wages using the ‘Other Exempt Wages’ field.

• A pool of $100 million for land tax relief grants will be paid to commercial landlords.
  • Grants equivalent to 25% of the landlord’s land tax bill for 2019‑20 for the property in which an eligible tenant is provided relief will be paid to landlords.
  • Eligibility requirements include the commercial landlord providing rent relief that equates to a minimum of three months’ rent and freeze outgoings to small businesses that have suffered at least a 30% reduction in turnover due to COVID-19.

• A $9 million relief package to support the taxi and on-demand transport industry, including:
  • $4.7 million in regional taxi assistance payments available to around 200 former country taxi licensees
  • A cash payment of $2,500 to around 600 authorised on-demand booking services
  • Waived renewal fees for the next 12 months for passenger transport vehicles and on-demand booking services.

• Waived rental payments for small businesses and not-for-profit groups in Government-owned buildings for six months.

• Eligible not-for-profit organisations and community groups can apply immediately through Lotterywest for a grant from the recently created $159 million COVID-19 relief fund, created to provide support to organisations that are helping people experiencing hardship.

3. New South Wales: COVID-19 grants available to business

Last updated 09/04/2020

• Small Business Support Grant of $10,000 will be available to eligible NSW small business owners.
  To be eligible, businesses will need to:
  • have between 1-19 employees and a turnover of more than $75,000
  • a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000
  • have an ABN as of 1 March 2020, be based in NSW and employ staff as of 1 March 2020
  • use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice.

• Deferral of rents for 6 months for commercial tenants with less than 20 employees in all Government-owned properties.

• Deferral of payroll tax for business with payrolls over $10 million for 6 months.

• A liability reduction of 25% of a businesses annual payroll tax liability when they lodge their annual reconciliation. This applies to businesses whose total grouped Australian wages for the 2019/20 financial year are less than $10 million.
  For businesses that lodge and pay monthly with ATW less than $10 million for the current financial year, no payment for the months of March, April or May 2020 will be required.

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For assistance or advice regarding any of the above information, please contact your client manager, contact us on our online contact form (button above) or call our office on 08 9321 2642.