COVID-19: Temporary relief measures

By Ella Walters


On 22 March 2020, the Federal Government announced a raft of temporary financial relief measures to grant distressed businesses some breathing space amidst the Coronavirus pandemic. Following this, the Coronavirus Economic Response Package Omnibus Bill 2020 was swiftly passed. If your business has been adversely impacted by COVID-19, the curated list below is your roadmap for navigating the measures that have been introduced over the past five months to help you weather the COVID storm and allow for business continuity.


Solvency and bankruptcy laws

  • temporary increases to the threshold at which creditors can issue a statutory demand (from $2,000 to $20,000);

  • temporary increase to the threshold at which creditors can initiate bankruptcy proceedings (from $5,000 to $20,000);

  • increased time periods for responses to statutory demands and bankruptcy notices from 21 days to six months;

  • temporary relief for directors from insolvent trading liability (note- fraudulent or dishonest insolvent trading may still attract criminal actions).

Foreign Investment

  • reduced the monetary notification thresholds to $0- most foreign investments will require notification to FIRB and Treasurer approval;

  • extended the FIRB review period from 30 days to 6 months;

  • See: Foreign Acquisitions and Takeovers Amendment (Threshold Test) Regulations 2020.

ASX & ASIC

Other

  • disclosure obligations under ss 674-675 Corps Act- replacing ‘reasonable person’ standard with temporary test of knowledge, recklessness or negligence;

  • JobKeeper scheme;

  • virtual shareholder meetings accepted;

  • execution of documents- electronic signatures accepted;

  • ACCC urgently granting interim authorisations that allow competing businesses to co-ordinate in ways that would ordinarily contravene the cartel conduct and other prohibitions.

Tax System Changes

  • increase of the instant asset write-off threshold from $30,000 to $150,000 for all businesses with aggregated annual turnover of less than $500 million until 30 June 2020;

  • 15-month investment incentive for eligible businesses to deduct 50% of the cost of an eligible asset on installation (acquired after 12 March 2020);

  • Other measures potentially available for financially affected businesses:

  • deferring up to 6months the payment of liabilities due through BAS (including PAYG instalments), income tax assessments, fringe benefit tax assessments and excise;

  • allowing businesses on a quarterly GST reporting cycle to opt into monthly reporting to expedite access to GST refunds;

  • allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter and claim a refund for instalments paid for the September 2019 and December 2019 quarters;

  • remitting any interest and penalties incurred after 23 January 2020 which have been applied to tax liabilities;

  • allowing businesses to enter into low interest payment plans to assist with existing and ongoing tax liabilities.

  • Plus a range of tax reliefs for foreign incorporated companies impacted by COVID-19 travel restrictions.

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