In this news brief, we wanted to devote more time and do a deep dive into the ATO Financial Relief measures and what each State Government is doing to support business during this difficult time with Coronavirus (CoVID-19).
For businesses experiencing financial difficulty due to CoVID-19 the following ATO relief options are available:
- Deferring by up to four months the payment date of amounts due through the business activity statements (BAS, including PAYG instalments), income tax assessments, FBT assessments and excise.
- Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
- Allowing businesses to vary PAYG instalment amounts to zero for the April 2020 quarter; businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities, and
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans.
THESE OPTIONS ARE NOT AVAILABLE AUTOMATICALLY....
What that means is, people need to apply for relief. To make it easier for people to apply for relief, the ATO will be increasing its presence in the areas of highest impact. It will also consider ways to enhance its presence in other significantly affected regions.
Additional temporary shopfronts and face-to-face options are currently under consideration. Further to above, anyone impacted by COVID-19 can contact the ATO to request assistance on its Emergency Support Infoline 1800 806 218.
If you currently work with Azure Group we can contact the ATO on your behalf and resolve any arrangements to support your business.
The RBA made the following key announcements following an emergency meeting, to assist business in this time of crisis.
- Interest rates were cut a further 0.25%, taking the cash rate down to 0.25%, and the lowest rate in history.
- In another historic move and as expected the RBA has announced a system of quantitative easing. This involves the government buying back government bonds, until the 3 year government bond rate is down to a targeted 0.25%. This has the effect of adding liquidity to financial markets and effectively means the government is printing money.
- In addition the RBA will lend $90 billiion to banks and the government will lend $15 billion to other non bank lenders at a rate of 0.25%, that these funds can be on lent to small and medium size businesses at lower interest rates than would otherwise be possible.
The historic measures above are designed to keep the cash flowing to businesses during this time of crisis. These measure will rely heavily on banks on lending these amount effectively.
State Government Relief
The State Governments have also confirmed financial relief for businesses within their states and territories.
New South Wales (NSW)
In NSW the State Government will be giving a Payroll Tax holiday to businesses. On 17 March 2020, the NSW Government announced three tax-related measures to assist businesses.
1. Three-month payroll tax waiver
Businesses with payrolls of up to $10 million will have their payroll tax liability waived for the three months April-June 2020.
2. Payroll tax threshold increase to be brought forward
The NSW payroll tax threshold will be increased to $1 million in the 2020-2021 year, 12 months sooner than had previously been scheduled. The threshold currently is $900,000 and had previously been scheduled to increase to $950,000 from 1 July 2020, and then to $1 million from 1 July 2021.
3. Waiver of fees and charges
A range of as yet unspecified fees and charges will be waived for small businesses including bars, cafes, restaurants, and tradespersons.
1. Payroll Tax Defferal
On 17 March 2020, the Queensland government announced that it had extended its coronavirus payroll tax deferral offer to all businesses in Queensland regardless of size.
When initially announced, the measure was only available to small and medium businesses. Under the deferral measure, the due dates for businesses to lodge payroll tax returns for the rest of the 2019-2020 payroll tax year (including for the February 2020 return period) are all deferred until 3 August 2020.
The deferral arrangements are optional and flexible. While the deferral offer is operating, businesses can:
- Defer lodgment and payment;
- Lodge returns as normal but defer payment;
- Lodge returns and pay as normal; and
- Defer for a time, but then resume lodging and paying as normal.
The Queensland Office of State Revenue also will work with affected businesses to establish repayment plans for deferred payroll tax liabilities.
2. Loan Facility
On 17 March 2020, the Queensland government also announced a new $500 million loan facility, to support businesses. The loans will be of value up to $250,000 with an initial 12 months interest free period. These loans are in place to allow business to retain staff.
Western Australia (WA)
On 16 March 2020, the WA government announced three payroll tax related measures aimed at supporting small and medium businesses manage the impacts of COVID-19:
Payroll tax threshold increase to be brought forward
The WA payroll tax threshold will be increased to AUD 1 million on 1 July 2020, six months earlier than previously scheduled. The WA government estimates that the increase will result in about 300 extra businesses no longer being liable to pay payroll tax, and about 11,000 businesses paying less payroll tax.
The payroll tax threshold currently stands at AUD 950,000, having been increased to that level on 1 January 2020.
Payroll tax deferral
Small and medium businesses that have been directly or indirectly affected by COVID-19 compared to normal operating conditions can apply to defer payment of their 2019-20 monthly payroll tax payments until 21 July 2020.
Businesses are eligible if:
- Their annual Australian taxable wages do not exceed $7.5 million (ungrouped businesses) or their group’s annual Australian taxable wages do not exceed $7.5 million (grouped businesses); and
- Their current turnover, profit, customers, bookings, retail sales, supply contracts, or other factors, compared with normal operating conditions, have been directly or indirectly affected by COVID-19.
Grant to businesses with a payroll between $1 million and $4 million
A one-off grant of $17,500 will be paid automatically to businesses with annual Australian taxable wages of between $1 million and $4 million. In the case of employers grouped for payroll tax purposes, a single grant will be paid to the designated group employer.
Approximately 7,400 businesses are expected to receive the grant. Grants will be paid from July, by cheque, but with a delay expected for taxpayers whose tax status changed in 2018-19 or who became liable for payroll tax during the 2018-19 or 2019-20 assessment years.
South Australia (SA)
On 11 March 2020, the South Australia Government announced a $350 million stimulus package that will include current infrastructure projects being brought forward, as well as new projects around road maintenance, housing, tourism and health. The details of the package are not yet available. We are monitoring the situation closely.
Northern Territory (NT)
On the 18 March 2020, the Northern Territory Government announced a $60 million coronavirus stimulus package to encourage spending on home renovations and business upgrades in an effort to prevent widespread job losses across the NT. Under the new Home Improvement Scheme:
- Homeowners will get a $6,000 grant for renovations if they spend $2,000;
- Businesses will receive $20,000 if they spend $10,000 of their own;
- Owners of residential and investment properties will receive a $6,000 grant for renovations if they contribute $2,000 of their own money; and
- Eligible businesses will get an initial $10,000 grant for upgrades, and another $10,000 if they contribute $10,000 of their own money.
Business owners will be able to spend their grant on upgrades or equipment if purchased from an eligible Territory business. The scheme are expected to be up and and running within the next few weeks.
On the 17 March 2020, the Tasmania Government announced a $420 million package comprising stimulus measures targeted at the hospitality tourism, seafood and exports sectors. Measures include:
- Payroll tax waivers for the last four months of this financial year for hospitality, tourism, seafood and exports sectors (Other businesses with payrolls of up to $5 million will be able to apply, based on the impact of virus, to have their payroll tax waived for April to June 2020);
- $20m in interest-free loans to the hospitality, tourism, seafood and exports sectors to be made available to businesses with a turnover of less than $5 million to purchase equipment or restructuring business operations and will be interest free, for three years.
- $50m in interest-free loans for local governments to upgrade, renovate and to do necessary maintenance to improve tourism and other assets, so when visitor numbers bounce back, Tasmania is ready; and
- $50m in maintenance on public buildings brought forward to provide an injection into local trades around the state and continue to support confidence in local communities.
On the 21 March 2020, the Victorian Government announced following stimulus measures:
- Businesses will be able to access the payroll tax cash refunds by Friday, 28 March 2020.
- Payroll tax that was paid by business with a total payroll of less than $3m, in the first three quarters of this financial year will be handed back.
- It will provide businesses with up to $113,975 in cash, with most receiving about $23,000.
- $500 million would be put into a Small Business Support Fund for hardship payments, small grants and tailored support which would be distributed in consultation with the Victorian Chamber of Commerce and Industry, the Australian Hotels Association, the Australian Industry Group and other industry representatives. This money will go towards sectors that 'really are doing it tough' who may not pay payroll tax and require more tailored support to survive. Further details need to be released in relation to this fund.
- Waiving of 12,5000 venues' liquor licence fees due this month.
- Commercial tenants in government buildings will also be able to apply for rent relief, a measure the Government is encouraging private landlords to offer as well.
COVID-19: How to motivate your team while working remotely?, published May 18, 2020
Expanding globally during COVID-19: Risky business or perfect timing?, published May 07, 2020
Cashflow is a lifeblood of your Business, especially now during a pandemic such as Coronavirus, published April 22, 2020
Finding opportunities in a crisis and how to recover on the other side of COVID-19?, published April 20, 2020
COVID-19: What does 'Standing Down my team' mean to my Business?, published April 16, 2020
JobKeeper Payment: Eligibility Rules have been released! Who is Eligible?, published April 15, 2020
Working from home during Coronavirus: What expenses are Tax Deductible?, published April 9, 2020
COVID-19: EMDG extra funding of $49.8 million to help Exporters, published April 7, 2020
Startups and Scaleups: R&D Tax Incentive FY2019 deadline extended due to Coronavirus, published April 6, 2020
What is the difference between JobSeeker and JobKeeper? Do you know what you're eligible for?, published April 2, 2020
JobKeeper Allowance: New Government financial measure as a response to COVID-19, published Mar 31, 2020
Should you do Business Planning during CoVID-19?, published 27 Mar, 2020
A second CoVID-19 Stimulus for Businesses, published Mar 23, 2020
What are the benefits of Coronavirus Stimulus?, published Mar 13,2020
Have you noticed our #FridayExpertTips... here's one that relates to #StimulusPackage
"Anyone impacted by CoVID-19: ATO Relief is NOT AVAILABLE AUTOMATICALLY. You will need to apply for relief. Contact ATO Emergency Support Infoline 1800 806 218 or get in touch with us."
This information is accurate on the day it’s published and is subject to change as the situation around Coronavirus (COVID-19) evolves. Our conclusions may not be valid if there is any change in those facts, circumstances and assumptions. Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused.