#2 – Stimulus Package for Businesses
#2 – Stimulus Package for Businesses
The government is providing up to $100,000 to eligible small and medium sized businesses and not‑for-profits – including charities – that employ people, with a minimum payment of $20,000.
The purpose of this payment is to boost cashflow and allow organisations to keep the lights on – and keep employees on the books.
Under the scheme, which builds upon the first stimulus package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000 for the March and June quarter wages periods.
In addition, the minimum payment is being increased from $2000 to $10,000 (so if you have employees, and you have minor or no wages tax to withheld, you will still get a minimum of $10,000). The payment will be available from April 28.
By linking the payments to business to staff wage tax withholdings, the government is hoping businesses will be encouraged to hold on to more of their workers.
The payments are tax free, there will be no new forms to fill out, and payments will flow automatically through your BAS from ATO to small to medium businesses with an annual turnover of less than $50 million that employ staff. Also to be eligible, you need to have employed staff as at 12 March.
And from July 28, eligible businesses will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received above being their wages tax or minimum payment, which will spread over the July to October period.
We think it’s unfortunate that for small businesses that don’t officially employ anybody, like a family-run business operation, these benefits won’t be available to you.
Another measure is the Coronavirus SME Guarantee Scheme, which will see the government guarantee 50 per cent of new loans issued by eligible lenders to SMEs
And the government is also temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The package also includes temporary relief for directors from any personal liability for trading while insolvent.
The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus