5 Clever Ways for SMEs to Use the COVID-19 Stimulus Packages
Business| By Sudeshna Ghosh | May 1, 2020
The COVID-19 (coronavirus) economic stimulus packages from the Australian Government can help small businesses upgrade to ensure healthy business continuity.
From office refits to website updates, there are many clever ways small businesses can make use of the temporary income support payments and tax relief benefits recently introduced by the Federal and State governments to encourage businesses to continue operating through uncertain times.
Key measures in the Federal Government’s economic response to the coronavirus such as cash flow support for SMEs, business loan part-guarantees, and an increase in the instant asset write-off tax deduction can be used to enhance and upgrade your business.
Of these, the increase in the instant asset write-off – up from $30,000 to $150,000 for purchases made before 30 June 2020, and available to eligible small businesses with an annual turnover of less than $500 million (previously a $50 million cut-off) – is particularly useful. You can upgrade your tools and equipment and get an immediate tax deduction (up to $150,000 for each asset).
Mark Chapman, H&R Block Director of Tax Communications says, “Many small businesses are struggling badly at the moment and that is having a knock-on effect on the personal situations of their owners and staff. If businesses can take advantage of the stimulus measures in a way that keeps them afloat to the other side of this crisis, that will benefit the businesses and also the wider economy.”
Here are five clever ways in which SMEs cannot only survive, but thrive, past the coronavirus pandemic (COVID-19).
Give Your Workspace a New Fit-Out
You know that office or shop refit you’ve been putting off? Well, now you can invest in a new fit-out to improve your work environment and provide a better customer experience – and the cost can be written off by the Australian Taxation Office immediately. Does the office need more meeting spaces and natural light? Could the retail outlet benefit from a more modern look?
With the current temporary closures and the end of the financial year looming, this could be the best time to get fit-out work done. When the COVID-19 (coronavirus) crisis ends, you and your team can return to an improved workplace.
Get a Tech Upgrade
Yes, new technology can cost a lot of money. That’s why it’s a savvy move to purchase now any new capital assets such as IT equipment – from computers to business software – and benefit from the instant write-off tax relief as soon as possible. New technology and software can help your small business work smarter, whether you’re using it to streamline your supply chain or to make remote working easier for your team.
These entitlements extend to building or adding more functionality to a business website, too – for example, adding an e-commerce function. In fact, this could help your business recover from any financial difficulty it is encountering due to the impact of the coronavirus, by enabling a traditional bricks-and-mortar business to transition to digital.
Become More Sustainable by Going Solar
Installing solar panels can go a long way in saving on your energy bills. But the upfront investment from your working capital can be a deterrent – until now. Transitioning to solar energy is one of the unexpected ways you can use the increased capital asset write-off limit. What’s more, by becoming a more sustainable business, you will win over your customers, too. More than 90 per cent of Australian consumers are concerned about environmental sustainability, says this study by HP Australia and Planet Ark.
Upgrade the Office Facilities
Whether it’s improving the office canteen with new kitchen equipment, purchasing a TV for the reception area or even artwork for your office walls, there are several workplace enhancements that qualify for the Federal Government’s instant asset tax write-off. Studies, including this one by the University of Exeter, point to increased productivity in workspaces that are enriched by art and prioritise employee wellness. So these improvements can go a long way in making the office a healthier, happier space – and give your business the boost it needs.
Purchase a Motor Vehicle
Is a new ute going to help you work more efficiently? Would giving a team member a car help them perform better? Will a new bike help you pivot to a delivery service? Purchasing a new vehicle is an obvious way you can benefit from the instant asset write-off scheme. But it’s important to put some thought into what sort of vehicle it makes the most sense to buy, and to check out the car-related limits.
The sort of government support available now is unprecedented, so make the most of what’s on offer.
Plus, there are plenty of helpful free resources, like this 5-Step Small Business Survival Plan to guide you through this tough time. SME owners may be navigating uncharted waters during the coronavirus outbreak, but it’s an opportunity to future-proof your enterprise and be ready for business recovery after the pandemic.