Corona Virus Support and Advice from Holmans
We are certainly in some uncharted territory with this virus crisis.
The effects of COVID-19 are likely to be felt across all industries and business owners are already very concerned. As a small business ourselves, we share your concerns and frustration.
Holmans have set up our team to operate from home in the event of a quarantine period. Obviously, there might be some inefficiencies during that period (including correspondence mostly being dealt with via email). However, we should still be online to support you though this very difficult time.
Our general business advice and tips during this difficult time:
- Ensure you lodge your Business Activity Statements on time (noting that many due dates have been extended – check with your accountant/business portal). Payment of the debt is a separate issue and can be managed with the ATO who will be quite generous on terms. Lodging your BAS on time helps limit any exposure you may have as a director (see included article) – that is, helps protect your personal assets like your home. Importantly, we also think any concessions/stimulus assistance will be subject to being up to date with the ATO Lodgements.
- Ensure you pay your employee superannuation on time. There are no extensions available for employee superannuation at the moment. You also don’t want to lose the tax deduction, which is lost permanently if paid even 1 day late. Paying on time also helps limit your exposure as a director in the same way as point 1. Click here to read why.
- Government Stimulus Package Opportunity – The recently announced COVID19 Government Stimulus Package presents some incredible planning opportunities for those trading through corporate/trust structures to have some of their tax liability paid by the Government. This is particular relevant where you are not on a formal wage through Single Touch Payroll or a nominal wage (not market value). It is only applicable in the March and June BAS periods. Holmans will be sending out information shortly, but Tax Planning or Government Stimulus reviews are critical this year to prevent some free money being left on the table. You should be contacting your accountant prior to 28 April to discuss the same.
- Contact your Landlord for Rent Support – We would recommend contacting your landlord if you have been severely impacted by a downturn and requesting they provide some rent concessions (min 3 months).
- Ensure you know your Legal Rights around employees – If you think you may be forced to terminate employees, ensure you have sought HR / Legal advice prior to doing so…. Earlier the better.
- Understand your Fixed Costs & do up a Cashflow Budget now – Review your figures and understand your fixed costs if your business were to go into lockdown, either enforced by the Government or you/employee contract COVID19. Do up a budget based on a few scenarios, low, moderate and high impact of COVID19. Look to cut non-essential costs where applicable now (i.e. is Advertising really working/effective). Arrange payment plans with large corporate entities, such as electricity, telephone, council rates, insurance and so-on. You are better off supporting the local/small business, the corporate will have more ability to support deferrals of payment.
- Build up a buffer / Bank Overdraft – If you have the option of building a buffer/reserve of cash, do so now and keep that money aside. If you don’t have a buffer, consider liaising with your bank early on whether you need an overdraft or need to have it extended. They will be very busy and time is of the essence. Applying for an overdraft when things are worse will make it hard to get it approved.
- Don’t postpone your tax obligations – Delaying your Financial Statements and Income Tax Returns will only hurt your chances of getting finance (assistance or take advantage of the situation), your ability to access ATO and Government benefits, or seek management and business advice from professional like Holmans.
Holmans understand that you need us more than ever in these uncertain times and we are trying to provide as much useful information as we can.
Together, we can get through this. If you are in desperate trouble (potential insolvency), please contact us sooner rather than later, so we can help guide you through the next steps.
General Information and Links about COVID19
Our clients and staff’s health and safety is our number one priority, which is why we urge you to follow the advice of the Australian and State Government. We have provided links below if you are unsure where to find that information. Holmans will be minimising face to face meetings during the next few weeks.
Anyone impacted by COVID-19 is advised to contact the ATO to request assistance on their Emergency Support Infoline 1800 806 218, when they are ready to discuss their situation.
Important Links and information