How to minimise the economic impact of COVID-19 on your business
Published: 20 March 2020
Practical measures to maintain your cashflow
As the COVID-19 situation continues to evolve, we are hearing our business clients ask “what can I do now to get ahead of the curve?” in terms of minimising the economic impact on your business.
Mostly importantly, we would suggest that you act now. There are steps you can take now that may put you in a better place down the track. Whilst none of us know what the immediate future holds, putting measures in place now may mean a better outcome down the track.
This week our team has spent considerable time gaining an in-depth understanding of the Government’s stimulus package measures for small business. In addition, we have created a list of other considerations that may also be helpful at this time.
Stimulus package initiatives
Deferral of Payment
The March quarter 2020 BAS must be lodged by the due date of 28 April 2020, this is critical. You then need to call the ATO to request that the four month payment deferral be applied. This applies to the total BAS amount including GST, PAYG Withholding, PAYG Instalments.
PAYG Withholding reimbursement
The $2,000 – $25,000 reimbursement on PAYG Withholding is a separate initiative. The reimbursement is 50% of the PAYG Withholding amount and is calculated by the ATO. You do not need to do anything to receive this other than ensure you lodge the March quarter 2020 BAS by 28 April 2020.
Please note: this is not relevent to the February 2020 BAS lodgement due 23 March 2020. If you are on a monthly lodgement cycle you will receive 150% of your withholding in the March payment if you lodge the March 2020 BAS 21 April 2020.
PAYG instalment variation
If you have a PAYG instalment for March quarter 2020, you can vary this to zero and can have any instalments paid in previous quarters for FY2020 refunded. Please speak with your Advisor to determine how best to action this.
Other ways to increase your cashflow
- Request a rent free period from your landlord, there’s no harm in asking
- Business insurance – do not cancel but request relief if your business needs to close
- Subscriptions – cancel or put on hold any subscriptions that are non-essential
- Business loans – contact your finance provider to enquire if future payments can be put on hold; a relief package has just been announced today allowing small businesses to defer payments for six months
- Speak with your bank to see if you can arrange to have a repayment holiday put in place
- Health insurance – don’t cancel but consider scaling back extras and other non-essentials
- Ensure you are familiar with the details of your Income Protection policy and how it treats the event that you are unable to work due to COVID-19. Speak with your Financial Advisor or policy provider.
We will continue to communicate with you as more information becomes available, however please contact our Tax & Business Advisory team if you have any questions on 03 8850 3333 or firstname.lastname@example.org.
We are here to support you and your business through this uncertain time.