ATO Relief Stimulus Package – what does it mean for you

We have received a few phone calls about this in recent days so we figured it makes sense to give an overview of the key points;

Stimulus package for households

The Government is allocating $4.8 billion to provide a one-off $750 stimulus payment 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 for social security, farm household allowance and veteran payments.

Tax relief options available

  1. Deferring by up to four months the payment date of amounts due through the Business Activity Statement (including PAYG instalments) as well as income tax and Fringe Benefits Tax assessments
  2. Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter.  Businesses that vary their PAYG instalments to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
  3. Remitting any interest and penalties incurred on or after 23 January 2020 that have been applied to tax liabilities
  4. Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans
  5. Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to

Note that there is no relief for superannuation obligations.  Employers will still need to meet their ongoing superannuation guarantee obligations for their employees.

PAYG Withholding refunds

These measures are aimed to help businesses cover the cost of employee wages.  The package does this by “subsidising” up to 50% of PAYG withheld over a six month period.

The minimum amount an employer would be able to receive is $2,000 up to a maximum of $50,000.

Timing of PAYG withholding credits is subject to lodgement of the Business Activity Statement.  That is, upon lodging the quarterly activity statements for March 2020 and June 2020, the ATO will automatically apply a credit to the lodgment (up to 50% in most cases)

For employers with monthly activity statement obligations, the March 202 credit will be calculated at three times the rate to cover for January 2020 and February 2020.

The ATO has advised that where these credits end up with the business having a net refundable amount, these refunds will be paid within 14 days to the nominated bank account.

Supporting business investment

The Government is allocating $700 million to increase the instant write off threshold from $30,000 to $150,000 and expanding access to these write-offs to include businesses with aggregated turnover of less than $500 million to 30 June 2020.

Finally, the ATO will provide administrative relief for some tax obligations for people affected by the Coronavirus outbreak on a case by case basis.

A bit here to digest so welcome the opportunity to chat with you about any questions that you may have.