covid-19 stimulus packages · 2020-06-17 · covid-19 stimulus packages as at cob 5 june 2020 jodie...
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COVID-19 STIMULUS PACKAGES
As at COB 5 June 2020
Jodie Knowlton
BDO Food & Agribusiness
Phone: 07 3237 5652
Email: [email protected]
EMPLOYER ELIGIBILITY
Basic Test: Decline in turnover of at least 30%
• 50% if turnover >$1b
• 15% if charity
Measured by reference to same month or quarter last year for actuals or projections, for example:
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Applicable Turnover Test Period Relevant Comparison Test Period
Actual GST turnover for the
month ending 31 March 2020, 30
April 2020, or 31 May 2020
Actual GST turnover for the month ended
• 31 March 2019, 30 April 2019 or
• 31 May 2019 (respectively)
Predicted GST turnover for a
selected month ending between
30 June 2020 – 30 September
2020
Actual GST turnover for same month
ending between 30 June 2019 - 30
September 2019
Projected GST turnover for the
quarter ending 30 June 2020 or
30 September 2020
Actual GST turnover for the same quarter
ended 30 June 2020 or 30 September
2020
Alternative Test:
Discretion to ATO where atypical performance (alternative tests):
• Drought or natural disaster affected
• Irregular payments (but not cyclical or regular sessional variances)
• Newly started
• Acquired in the year
• Substantial growth
Special rules for employment service entities
EMPLOYER ELIGIBILITY
Examples – drought declared:
Example 1. Grain growing business (Smith Family) is in an area that has been drought declared since 1 March 2014 . In one of its operating entities it:
Predicted April – June 2020 GST Turnover $200,000
Actual April – June 2019 GST Turnover $195,000
Actual April – June 2013 GST Turnover $375,000.
The business would not be an eligible employing entity under the original basic test (comparing 2019 to 2020).
It would be an eligible entity under the alternative test as the predicted GST Turnover from April – June 2020 has reduced by more than 30% compared to the Actual GST Turnover in April – June 2013.
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EMPLOYER ELIGIBILITY
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Key Points:
Turnover assessments can be made between March 2020 to Sept 2020 and business should apply at the point they meet the eligibility criteria
GST turnover in either the test period or comparison period is calculated using either the cash or accruals method, regardless of the usual GST method adopted in the BAS but the method used for turnover test period and comparison test period must be consistent
Forward pricing contracts and pool sales need to be considered when determining projected turnover (cash v accruals)
Farm Management Deposit withdrawals are not included in the GST turnover definition
ELIGIBLE EMPLOYEES
Employed at 1 March 2020 and remains employed
• Even if stood down or rehired
Full-time, part-time or casual
• aged over 18 years (or 16 - 17 years if financially independent and not a full
time student),
• a full time, part time or casual employee employed by the entity on a regular
and systematic basis for the previous 12 months
• may allow for related employers
Australian citizen, Australian permanent resident or NZ citizen
Where multiple employers, employee nominates their chosen employer
One in, all in
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PAYMENTS
$1,500 per eligible employee, per fortnight
Payment is taxable and subject to PAYG-Withholding
• ~$1,300 after tax
• Must be passed on in full (before tax)
Wages remain subject to Superannuation Guarantee, but ‘top up’ does not
Paid in arrears – have to pay the employees first
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ELIGIBLE BUSINESS PARTICIPANT
Business meets one of the employer eligibility tests
Active individual in a business who is not employed
One participant per entity
Payment of $1,500 / fortnight
Cannot be employed elsewhere
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If the entity is a… The individual must be…
Sole trader The entity
Partnership A partner in the partnership
Trust An adult beneficiary of the trust
Company A shareholder in or director of the company
ELIGIBLE BUSINESS PARTICIPANT
ExampleThe Smith family (Dad - John, Mum - Mary & 2 adult children (Brad & Vanessa) has the following operating entities which have all been classified as eligible businesses for job keeper:
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Entity Business Eligible business
participant
How
Company Grain Growing Business John Director
Trust Service Station Mary Adult beneficiary
Sole Trader Contract Spraying Business Brad Sole Trader
Partnership Owns land – passive lease to grain growing
business
Not Eligible as not in business
CASH BOOST
“Cash Boost” for business
• Aggregated turnover <$50m
• Based on PAYG-W liability
• First Boost:
– Min $10,000
– Max $50,000
– Paid on lodgement of March BAS
– Additional amounts (if any) on lodgement of BASs for periods to 30 June 2020
• Second Boost:
– Same amount as first boost paid equally in June, July, August, September
• Must have had some sort of lodgement between 1 July 2018 and 12 March 2020 re 2019 year showing business income or consideration for a supply
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SMALL WITHHOLDER
Example:
• March BAS PAYG-W = $6,000
• June BAS PAYG-W = $5,000
First Boost = $11,000, payable:
• $10,000 on lodgement of March BAS
• $1,000 on lodgement of June BAS
Second Boost = $11,000, payable
• $5,500 in July & October
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MEDIUM OR LARGE WITHHOLDER
Example:
• March BAS PAYG-W = $11,000
• April IAS PAYG-W = $7,000
• May IAS PAYG-W = $7,000
• June BAS PAYG-W = $7,000
First Boost = $50,000, payable:
• $33,000 on lodgement of March BAS
• $7,000 on lodgement of April IAS
• $7,000 on lodgement of May IAS
• $3,000 on lodgement of June BAS
Second Boost = $50,000, payable:
• $12,500 in July, August, September & October
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Total $50k
INSTANT ASSET WRITE-OFF (ALL BUSINESSES)
New and second-hand assets first used or installed ready for use
• Threshold applies on a per asset basis
• Applies to assets classified as plant & equipment (Div 40),
• Does not apply to capital improvements (except those used in primary production)
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Dates Aggregated Annual
Turnover
Immediate Deduction
Threshold
2 April 2019 – 11 March 2020 Less $50M $30,000
12 March 2020 – 31 December
2020 (COVID-19 measure)
Less $500M $150,000
1 January 2021 onwards Less $10M $1,000
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COVID-19: ASSETS - ACCELERATED DEPRECIATION
Backing business investment incentive (all businesses)
Accelerated depreciation deductions are available for businesses with an aggregated
annual turnover of less than $500 million
No asset value threshold
Applies to assets classified as plant & equipment (Div 40)
They apply to new assets only upon installation, provided it was acquired after 12
March 2020, and first used or installed by 30 June 2021
A 50% deduction upon installation, existing depreciation rules continue to apply to
the remaining balance
Does not apply to software development pools or capital works
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COVID-19: ASSETS - ACCELERATED DEPRECIATION
Key points
Claims for luxury or part private use cars is limited to $57,581 for the 2019-2020
income tax year
Asset financing arrangements need to be considered when determining eligibility
for these incentives
These measures do not impact existing accelerated depreciation eligibility of
fencing, fodder storage and water assets
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Example
A grain producer has aggregated turnover of $2m acquires a new tractor (effective life of 12 years)
costing $145,000
1Depreciation = $145,000 × (91 ÷ 365) × (1 ÷ 12 x 200%)
2Depreciation = ($145,000 - $72,500) × (181 ÷ 365) × (1 ÷ 12 x 200%)
Date acquired Method 2020 FY tax
deduction
2021 FY tax deduction
Acquired and first used 1 March 2020 (prior 12
March 2020)
Existing depreciation
(200% DV)
$6,0251 $23,161
Acquired and first used 1 April 2020 (after 12
March 2020 but before 31 December 2020)
Accelerated immediate
asset write-off
$145,000 Nil (all claimed 2020)
Acquired and first used 1 January, 2021 (after
31 December 2020, but before 30 June 2021)
Backing business
investment incentive
Nil Immediate 50% $72,500 +
$5,9922 = Total $78,492
COVID-19: ASSETS - ACCELERATED DEPRECIATION
OTHER MEASURES
Superannuation:
• Early access to superannuation:
– $10,000 before 30 June and $10,000 after
• Account-based pension: minimum superannuation drawdown requirements have been halved
R & D – lodgment with Aus Industries for activity within 30 June 2019 FY is extended to 30 September 2020 (from 30 April 2020)
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ATO HELP
ATO deferrals of payment for 6
months
• Income tax, FBT and excise
• GST disappeared
• PAYG-Withholding
Variation of PAYG-Instalments
(including refunds)
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STATES & TERRITORIES
Many different measures
• Payroll tax
• Land tax rebates
• Grants & loans
• Fees & charges
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Jodie Knowlton
Associate Director
BDO Food & Agribusiness
Phone: 07 3237 5652
Email: [email protected]
CONTACT DETAILS