The stimulus package contains four business measures:
- Increase the Instant Asset Write Off
- New 50% Investment Incentive
- Refund of PAYG Withholding
- Apprentices and Trainees Support
Increase the Instant Asset Write Off
The instant asset write-off threshold will be increased from $30,000 to $150,000, and eligibility to access these provisions will be increased from businesses with $50m turnover to $500m turnover. Access to the increased write-off will be from 12 March 2020 until 30 June 2020.
To claim the deductions the asset must:
- be mainly used in the business
- have been purchased on or after 12 March 2020, and
- be installed and first ready for use by 30 June 2020.
New 50% Investment Incentive
A 15-month investment incentive has been included in the form of accelerated depreciation deductions. This is only available for new assets which are installed and ready for use between 12 March 2020 and 30 June 2021. Like the Instant Asset Write Off, this is accessible for businesses with a turnover of under $500m.
Please note that second-hand assets and capital works such as buildings do not qualify.
The investment incentive allows businesses to claim half of the cost of a new asset as depreciation and claim the remainder under the existing rules (e.g. general pool). This incentive would only be required if it does not qualify for the instant asset write off provisions.
Refund of PAYG Withholding (Employee Tax on their Wages)
Businesses with a turnover of less than $50m and employ staff will be eligible for a tax-free payment of between $2,000 and $25,000.
The amount will be determined at 50% of PAYG Withholding for the March and June 2020 Activity Statements. Employers who pay staff but do not withhold will be eligible for the minimum $2,000 payment. This will be automatically calculated by the Tax Office and will be applied as a credit in the Activity Statement system. Any credits which results in a refund situation will be paid by the Tax Office within 14 days.
Apprentices and Trainees Support
Eligible employers can apply for a wage subsidy of 50% of an apprentice or trainee’s wage from 1 January 2020 to 30 September 2020. Where a small business (employing fewer than 20 full-time employees) is not able to retain an apprentice or trainee, the subsidy will be available to a new employer. The maximum subsidy is $21,000 per eligible apprentice or trainee.
To qualify, the apprentice or trainee must have been in training with a small business as at 1 March 2020, and final claims must be lodged by 31 December 2020.
More information can be found at www.australianapprenticeships.gov.au.
If you have any further questions, please don’t hesitate to contact the team at HHH Partners.