COVID-19: how we can help you through these challenging times

With the current challenging times as a result of the current COVID-19 outbreak, we are and will continue trying to reach out to you on a one on the basis, but in the meantime, we have listed how Carbon can help as you are not alone.

With a range of industry experts, there’s plenty we can do to assist

• Cashflow forecasting and scenario modelling – to help give you a clear view of your short and medium term cash flow forecasts for the coming weeks/months around various different scenarios;
  • • What would be the cashflow impact if I closed my business temporarily for a certain period of time – taking into account permanent staff, reduced cashflows for casual workers?
    • What would be the cashflow impact of reduced trading hours, reduced goods/services offerings?
• Stimulus review & execution service from our accounting team. We will look at your current circumstances and provide recommendations to maximise the full entitlement of what the ATO stimulus package.
  • • We can navigate through your tailored structures and strategies to ensure you receive full entitlement as well as dealing with the ATO on your behalf.
• Balance sheet reviews to help identify potential pain points and potential opportunities to assist with cashflow.
• Assist with obtaining new business finance or refinancing existing business loans through Carbon Finance & Lending.
• Review your current home loan – with the cash rate at a historic low of 0.25%, there’s never been a better time to refinance, and you may even be able to stay with your existing lender.
• Legal structure reviews to ensure appropriate asset protection and to also enable maximum access to current and future government stimulus package initiatives (ie converting director notional salaries to wages, and accessing the ATO 50% PAYGW payment).
• Talk to the ATO on your behalf and get you some much needed breathing room
• Advance on your R&D tax incentive – if you’re eligible for a tax refund, our R&D specialists can work with Radium Capital to get you 80% of the refund now.

We understand these are difficult and uncertain times, putting huge amounts of pressure on small businesses across the country, we know because we are a small business ourselves.

You are not alone and we are here to help at any time.

Current assistance from the Federal and State Government, as of Friday 20th March.

Banking sector: Business loan repayment deferral

Australian banks will defer business loan repayments (principal and interest) for up to six months for those small businesses struggling with the impacts of coronavirus. We can speak to the bank for you about accessing this deferral on loan repayments should you have issues or concerns around your business’s cash flow as a result of coronavirus.

Some banks are also offering deferral of home loan repayments for up to six months. It may be an option to defer home loan repayments in order to free up cash to contribute to business cashflow shortfalls. If you have concerns about being able to afford your mortgage repayments, please contact your bank, or speak with one of our finance brokers.

PAYGW cashflow assistance

Small and medium business entities with aggregated annual turnover under $50 million who employ workers are eligible for a 50% reduction in their PAYGW liability up to a total value of $25,000, with a minimum payment of $2,000, between 1 January 2020 and 30 June 2020.

The minimum payment of $2,000 will be paid to eligible businesses that pay salary and wages, even if they are not required to withhold tax.

The ATO will administer the PAYGW relief as a credit upon lodgement of the monthly/quarterly activity statements, starting from 28th April 2020. Where the 50% PAYGW credit places a business in a refund position, the ATO will pay the refund within 14 days.

Payroll Tax (Western Australia)

A one-off grant of $17,500 where taxable wages for payroll tax purposes are between $1 million and $4 million, with grants to be paid in July 2020.

WA payroll tax – the payroll tax threshold will increase from $950,000 to $1,000,000 from July 2020 (bought forward from 1 Jan 2021), resulting in a reduction of payroll tax payable via an increase in the deductible amount.

Employers, or groups of employers, whose businesses are directly or indirectly impacted by the coronavirus, and where they have Australia wide taxable wages less than $7.5 million, can apply to have their payroll tax payments deferred until 21 July 2020.

Instant asset write-off and business investment incentive

The instant asset write-off threshold has been increased from $30,000 to $150,000 and access is expanded to include businesses with an aggregated annual turnover below $500m (up from $50m).

This measure applies from 12 March 2020 to 30 June 2020 to new or second-hand assets first used or installed to be ready for use in this timeframe.

Apprentices/trainees support

Small businesses employing less than 20 full-time employees who retain an apprentice or trainee, who was employed as at 1 March 2020, are eligible for a wage subsidy of 50% of the apprentice/trainee’s wage for the 9 months from 1 January 2020 to 30 September 2020.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

ATO relief options

To be assessed on a case by case basis by the ATO, for businesses impacted by the coronavirus the following may be accessed:

• Remission of any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
• Putting in place payment plans for current and on-going tax liabilities with low or no general interest charges.

Potential strategies to help manage and mitigate cash flow issues

• Reduce any non-essential spend.
• Speak to suppliers about the possibility of them providing credit accounts, and extended payment terms on existing credit accounts.
• Speak to customers/clients who are on trade credit accounts about the possibility of reduced payment terms and potentially offering discounts for early payments (this may assist short-term cashflow strain and worth the discount offered).
• Discuss with landlords the possibility of reducing or deferring ret payments.
• Discuss with financiers for existing debt the possibility of reducing or deferring loan/hire purchase payments, or consider refinancing.
• Consider taking out financing to assist with short to medium term cash flow shortfalls.
• Depending on staffing requirements, where reductions may be required, discuss with staff alternate employment options such as dropping to part-time hours, accepting a temporary remuneration reduction, in order to retain staff for when conditions improve and to enable continued employment for your personnel.
• Speak to the ATO around deferring payment of tax obligations, and if required put in place a payment arrangement.

How can Carbon assist?

Most important of all is that we are here to support your businesses, yourself and your families, so we encourage you to reach out and contact us to further discuss any queries, concerns or issues you may have.