Many businesses have been kept afloat by the government over the past twelve months, buoyed by the many benefits and concessions from schemes they have deployed. The two largest schemes have been JobKeeper and Cash Flow Boost. Cash Flow Boost ended with the September BAS (in 2020) and JobKeeper officially ended at midnight on March 28, 2021.
The unions have warned that the end of JobKeeper will lead to higher unemployment, and as a general statement, it makes sense to believe this will occur. It is likely that not everyone has been able to keep their job, with even the government admitting to expecting up to 150,000 jobs to be lost due to JobKeeper ending. This had to end at some stage – it had already cost taxpayers around $90 billion to provide these benefits over the past year.
The government is still providing some benefits to businesses in the form of tax advantages or business grants. For example, you will receive significant tax deductions for the purchase of new items and equipment, regardless of how much you spent. If you make a loss this year, it is possible to get a refund on tax you paid last year or the year before if you made a profit and paid tax in those years.
The government has also provided Australians with the new JobMaker Scheme (see article in our May 2021 Business Matters Newsletter) State governments are providing grants and loans to affected businesses. Each state has different loans and grants, more information about what is available for each state can be found at www.business.gov.au Speak with us to find out more about what you might be eligible for.
New rules around bankruptcy and liquidation have been put into place to help support struggling businesses. Two important changes came in on 1 January, the day after the prior temporary relief measures ended. These new measures are not necessarily designed to help businesses get back on their feet, but they are there to make life a lot easier if they need to go into insolvency.
Firstly, these rules have provided for a more simplified liquidation process that should allow companies that are “too broke to go into liquidation” to engage a liquidator by making liquidations cheaper.
Secondly, there is business restructuring available whereby existing debts can be restructured over time while normal business operations continue.
Talk with your LT accountant to discover more.