Are you dealing with the capital crunch because of the coronavirus pandemic? Check out how you can use the R&D tax incentive to boost your capital and keep your business afloat during these times.
The Federal Government is doing everything they can for businesses due to COVID-19. In the past few weeks they have committed around $200 billion to lessen the financial fallout for businesses from the coronavirus. With announcements and new support packages coming thick and fast, we’ve put together a whistle-stop tour of what’s on the table to support your business. Check out how we can help you keep up with the new announcements and support packages that are coming your way.
Restock on capital
With the difficult situation looming around businesses, it’s only practical for entrepreneurs to be more practical with their spending, but have you given as much importance into the money going into your business. Not sure how to measure your cashflow, especially during these times? Our team has got your back.
Deadline extension for the R&D tax incentive
Due to the COVID-19 crisis as well as recent bushfires, the Federal Government has extended the deadline for claiming the 2018-2019 R&D tax incentive from 30th April to 30th September of 2020.
Lodge a claim for any R&D incentives your business may be eligible for by Septermber 30. Remember this is additional to any R&D offsets your business has this financial year.
Make sure that you have registered your research with the Department of Industry, Science, Energy and Resources.
Get to access your additional capital immediately from your qualified R&D refund with an R&D advance. A Radium Advance is a cash-flow-friendly and cost effective solution that will allow your business to access capital in just a few business days. If you’ve explored the R&D tax incentive in the past and found you weren’t eligible; it’s worth revisiting. Give us a call, or drop us an email and we’ll review this for you right away.
With the Federal Government’s recently announced Mandatory Commercial Tenancy Code and JobKeeper Payment scheme, it has become easier to spend less as these are designed to help businesses with payroll and rent.
Applications for the JobKeeper Payments have opened on April 20 and will close at the end of May. Sole traders and businesses with staff are eligible for $1,500 a fortnight for every employee which can help businesses tide over the coronavirus impact on their business. Application can be made through the ATO’s business portal by using your myGov ID. Not sure how to do it yourself? We can help out.
For employers to qualify, your business must either:
- Have a total turnover below $1 billion and are experiencing a decrease of 30% in revenue
- Have a total turnover of $1 and above and are experiencing a loss of 50% or more in revenue
Your business also can’t be subject to the Major Bank Levy and present an employee relationship with the staff you’re claiming for existed by 1 March, 2020; these employees must also still be employed by your business.
There is a turnover test that applies for sole traders to qualify for the JobKeeper Payment, however you must not be a permanent employee of another business.
Help for commercial tenants
In early April, the National Cabinet brought in a new national code to help businesses with commercial tenancies.
For businesses that are qualified to the JobKeeper Payments are also qualified for help with their lease. You will be eligible to claim a rent waiver and rearrangements proportionate to your loss in revenue. Your rent cannot be increased by your landlord or add additional interest or penalties during the pandemic.
If your lease is up for renewal you can have it renewed for 24 months or longer, with rent reductions and deferrals included. And if landlords receive any benefits or relief during the pandemic, for example from banks, they must pass these on in the appropriate proportion.
Cut your tax bill
Along with ensuring you apply for the R&D tax incentive and utlise of the extended deadline for R&D tax incentives for the last financial year, there are a few programs to help businesses lessen their tax bills.
New instant asset write-offs
The new instant asset write-off
and accelerated depreciation through the backing business investment scheme
are two examples. While the instant asset write-off scheme has been around for a while, it allows eligible businesses to be able to write off the cost of a new or second-hand asset up to a certain amount immediately. They then claim a tax deduction for the business portion of the cost of buying the asset in the year it’s first used, or installed and ready for use.
In response to COVID-19, the government has revamped instant asset write-offs. From 12 March to 30 June 2020, the threshold amount for assets has been increased from $30,000 to $150,000. The goal posts have also shifted on turnover allowing more businesses to qualify. Now companies with revenue of up to $500,000 million can apply where previously only those with turnovers below $50,000 million were eligible.
Backing business investment
Backing business investment is a 15-month investment incentive scheme to enhance business and economic growth in the short-term. It applies to eligible assets acquired from 12 March 2020 that are installed or first used by 30 June 2021. Eligible businesses can get a 50% deduction of the cost of an eligible asset when it’s installed. Then existing depreciation rules still apply to the balance of the asset cost.
With new measures and responses made by the federal government to the coronavirus pandemic, our team is right here to assist you in understanding what these all mean for your business. And we’ll keep you updated to support you and your business through these challenging times.
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