DEMYSTIFYING THE STIMULUS PACKAGE (PART 1)

Luka Group is committed to keeping you informed throughout the Coronavirus Health Crisis.

Benefits for Business you need to know:

For Employers

The government is providing up to $50,000 for employers with aggregated annual turnover under $50 million, with a minimum payment of $10,000 per employer.

This tax-free payment will be automatically calculated by the Australian Taxation Office and will be an automatic credit to your Activity Statement ATO Account from 28 April 2020.

Eligible employers that withhold tax on their employee’s salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000 starting on the March 2020 BAS Statement. This takes into account wages tax for the January to June 2020 period.

Employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax from employees.

For those employers that continue to be active employers in the July – October 2020 period, they will receive another round of payments into their ATO account equal to that already received under the above scheme, i.e. another payment up to a maximum of $50,000 and a minimum payment of $10,000. Therefore, under both payments eligible entities will receive at least $20,000 up to a total of $100,000.

You do not need to register; the payments will be made into your ATO account once your BAS Statements are lodged.

If you have Apprentices and Trainees

Small business that employee fewer than 20 full time employees who retain an apprentice or trainee that was in training as at 1 March 2020, can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020 up to a maximum of $21,000.

Employers must register for the subsidy between early April 2020 to 31 December 2020. The registration process will start in April 2020, but the process is currently unknown.

Financial Distress Temporary Changes

For a period of six months the government has made the following changes:

  • The minimum threshold for creditors issuing a statutory demand on a company has gone from $2,000 to $20,000;
  • The statutory timeframe for a company to respond to a statutory demand will be extended from 21 days to six months.
  • The threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will increase from $5,000 to $20,000.
  • The time a debtor must respond to a bankruptcy notice has increased from 21 days to six months.
  • When a debtor declares an intention to enter voluntary bankruptcy by making a declaration of intention to present a debtor’s petition there is a period of protection when unsecured creditors cannot take further action to recover debts. This period is extended from 21 days to 6 months.

Creditors will still have the right to enforce debt against companies or individuals through the courts.

Temporary Relief from Directors’ personal liability for Trading While Insolvent

Directors are personally liable if a company trades while insolvent. To make sure that companies have the confidence to continue to trade through the Coronavirus crises with the aim of returning to viability; directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. This will apply for six months.

Luka Group will continue to update you. Please call our office on 02 6883 2200 if you have any queries.