Not only has COVID 19 hurt us medically, but it’s also leaving an economic strain on us too.
Businesses across a range of industries have seen a significant reduction in turnover which will translate into cash flow issues. This also raises a question on what this means for employees working for those businesses.
The government has responded to these unprecedented economic hiccups by introducing stimulus packages designed to assist Australian businesses and employees to navigate through the economic impact of COVID 19.
For Australian businesses, including small, medium and large enterprises, the Federal and State governments have introduced the following measures:
- Instant asset write-offs (income tax measure);
- Business backing investment (income tax measure);
- Australian Taxation Office administrative concessions for business (taxation measure);
- Wage subsidy- jobkeeper payments;
- State based concessions primarily focused on payroll taxes; and
- Tax free payments.
Depending on the size of the business, these concessions may impact the taxation of returns to investors, international taxation requirements and accounting disclosures for reports lodged with ASIC.
For employees working from home, there are simplified income tax deductions which may be available for certain costs incurred for carrying out their professional duties which are necessary for producing income. It’s important to distinguish these costs as the deductibility of the outgoings will depend on the nature of the costs incurred. And for those employees who have been paid provides payments which are COVID19 related (whether they be pandemic allowances or for being stood down), its important these payments are taxed correctly for income tax purposes.
We have provided a snapshot providing some further detail on how this all works and what it means for you.