Tips for individuals and businesses to help with the current COVID-19 situation

Individuals

Working from home

Many workplaces are asking employees to work from home. Working from home can be great if it is set up well. It can be frustrating and unproductive if it is not. Check out the following tips to have a productive home office.

  • Find a dedicated space away from distractions. A kitchen table is often what people default to, however if you can get yourself a desk and find space in a bedroom, garage, or quiet corner, this will make your life so much easier.
  • Set up a desk that is comfortable, check that the height is good for you and that you can sit/stand in a comfortable way. If you have a small laptop, consider getting a large screen to connect, so that you minimise eye strain at a stressful time. This is a good practice generally, but particularly important when you are tired.
  • Clear as much clutter away from your work area as possible.
  • Track your hours worked from home. On your tax you can claim a deduction for 52c per hour worked from home. Keep a record of your hours so that you can claim this later. Also keep records of your internet and phone costs associated with this work.
  • If you have kids and schools/childcare are shut down, try to dedicate time to work when you will not be distracted (good luck) and dedicate time that you will spend with the kids. This may involve shifts of you working and your partner looking after the kids and vice versa, or working during nap times or early morning. It will not be practical if kids are at home to have you both work from 9 to 5, so this flexibility will need to be discussed with your employer.

$750 Pension payment

If you receive a pension or social security payment you will be eligible to receive this one-off payment. Details of exactly who is eligible will likely be in the media and on government sites on 23 March as this is the date that it will be legislated. Payments will be made directly into your bank accounts.

ATO relief

The ATO have announced a number of measures to help cash flow, including low-interest loans and deferrals for tax payments. The important thing to note is that to be eligible, you must apply for this by contacting the ATO to request assistance. The dedicated phone line for this is 1800 806 218.

Wills, powers of attorney and personal insurance

Make sure that you have all your relevant documents and insurances in place, this makes it easier for the people around you to help if you get sick. Please contact us should you need details of advisers who can help you with this.

Businesses

Budget regularly

Most accounting systems include a budgeting tool which allows you to insert what you believe your costs will be and then compare how you perform against them. Start preparing budgets for a few different scenarios: business as usual, staff unavailable, business needs to be run from home and business shut down. Reviewing this weekly/fortnightly will help you make better decisions.

Consider how you own your cars

The government now allows you to claim the full cost of a motor vehicle up to the value of $57,581. Discuss with us the benefits of owning your car in your business’s name rather than your individual name.

Engage with your staff with regards to the plans that you have in place

This may include things such as working from home. If their regular role cannot be performed temporarily, consider other roles that they may be able to perform which will put you in a strong position when things recover. Consider that if the conditions we are currently in last for months or a year, get staff to think of and test new ways of performing their role. For example, can tasks be performed remotely such as via video conference?

Engage with your customers

Contact your customers to let them know your business is running and inform them of any new ways of doing business that you offer. For example, let them know if you are doing teleconferences rather than in-person meetings now.

The Australian Government’s stimulus package: What’s available to you?

On 12 March 2020 the Australian Government and the ATO announced their assistance through a stimulus package and administrative concessions, details of which are available on their websites:

https://www.pm.gov.au/media/economic-stimulus-package

https://www.ato.gov.au/Media-centre/Media-releases/Support-measures-to-assist-those-affected-by-COVID-19/

I have included details below of the most relevant information, for easier reading. For further details, please visit the government sites I have referenced above.

Individual assistance

A one-off $750 stimulus payment will be available to pensioners, social security, veteran and other income support recipients and eligible concession card holders. The payment will be tax-free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment.

Business assistance

Instant asset write-off is now $150,000

The instant asset write-off threshold will be increased from $30,000 to $150,000 and expand access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.

Accelerated depreciation deductions

A time-limited 15-month investment incentive (through to 30 June 2021) will be provided to support business investment and economic growth over the short term, by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset cost in the year of purchase.

50% rebate of PAYGW up to $25,000

Cash flow for employers will be boosted by up to $25,000, with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax-free. Businesses will receive payments of 50% of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.

Apprentice and Trainee subsidy

Small businesses will have assistance to support the jobs of around 120,000 apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice.

Assistance for severely affected regions

Support for those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

ATO relief

  • You will be able to defer by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.
  • Businesses on a quarterly reporting cycle will be allowed to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
  • Businesses will be allowed to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
  • Any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities can be remitted.
  • The ATO will work with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

The bit most people miss with the ATO

The ATO relief for COVID-19 is not automatic. If you wish to receive the above assistance you need to contact them directly to apply for it. They have set up a support line on 1800 806 218 which you can call to access these benefits and discuss any issues relating to COVID-19.