Earlier today PM Scott Morrison announced the details of his economic stimulus package in response to the COVID-19 virus. While any draft legislation is still probably a few weeks away, its important to go through what we know now:
- The small business instant asset write off has been increased to $150,000 for businesses with less than $500m in turnover. At the moment this is set to reset back to $1,000 on 1 July 2020 so it will be interesting to see how this is addressed when the federal budget gets handed down in a few months.
- Investment initiative: an immediate deduction of 50% of the cost of the asset if the business’s turnover is less than $500m. Ordinary depreciation rules apply to the remainder of the asset.
- Tax free payments between $2,000 and $25,000 for employers. This will get applied to the business’s integrated client account as a credit to the account. This is to be calculated as 50% of the PAYGW amount on the March 2020 and June 2020 BAS.
Obviously further details are to come and the two depreciation measures could be seen as simply a timing difference by bringing an inevitable deduction forward in time to assist the economy now, but they are certainly still welcomed.
If you’d like to discuss any of these points or anything else announced in the stimulus package further, please don’t hesitate to contact our office.