Hang in there
We’ve designed this guide as a quick reference to the COVID-19 related tax and financial support that might be available to you.
The stimulus and support packages help, but there are gaps and they will not return most adversely impacted businesses or people back to their pre-pandemic position. It will all take time.
It’s important to understand the timing of the each of the measures as many are not immediate. You also need to understand who is eligible and how. We are here to help you as much as we can to ensure that you have the right information and can make informed decisions.
There are a few peculiarities with the support measures and incentives, and they will not apply equally across the community.
When it comes to the cash flow boost of up to $100,000 for business for example, sole traders and partners in a partnership are dealt with differently to those operating a business through a company or trust. While the cash flow boost measure can potentially apply to salary and wages paid to staff, amounts allocated or paid to sole traders or partners cannot really be taken into account.
When business owners are operating through a company or trust structure the outcome of the incentives can be significantly different depending on how the funds are being taken from the business. The cash flow boost measure doesn’t take into account dividends or trust distributions paid to business owners, but can take into account salary, wages or directors fees paid to the same individuals. There are also integrity rules preventing artificial or contrived arrangements from being used to access the cash flow boost.
12 March 2020 is a crucial date for accessing the cash flow boost. Relatively new business entities that have not lodged any tax returns or activity statements by 12 March 2020 might miss out unless the Commissioner grants discretion around the timing requirements.
Also, with the $1,500 wage subsidy, employees eligible for the subsidy had to be employed by the business claiming the subsidy as at 1 March 2020. Some will miss out.
It can be confusing and frustrating but we will help you work through it and ensure that you are able to access the support that is available to you.
Snapshot
| From | Stimulus | Eligibility | Trigger for support |
| 30 March for up to six months | · $1,500 JobKeeper payment. A $1,500 (before tax) per fortnight per employee wage subsidy paid through employers to the employee and administered by the ATO. | · Employer – > 30% downturn (>50% for businesses with turnover of $1bn or more) · Employee – employed as at 1 March (other conditions apply) · Self-employed individuals can also access this | · Employer applies to ATO |
| From 28 April 2020 | · Tax-free cash flow support between $20,000 and $100,000 (paid in two rounds of up to $50,000) for businesses with an annual aggregated turnover < $50 million and make certain payments to staff by 30 June 2020. | · Annual aggregated turnover < $50m · Pay staff between 1 January 2020 and 30 June 2020 (includes not-for-profit businesses) · Business must have been established by 12 March 2020 | · Automatic on lodgement of March Activity Statement and later Activity Statements |
| 12 March 2020 – 30 June 2020 | · Instant asset write-off increased to $150,000 and extended to businesses with an annual turnover < $500 million | · Annual turnover < $500m · Assets used or installed ready for use between 12 March and 30 June 2020 | · 2019-20 tax return lodgment |
| 12 March 2020 – 30 June 2021 | · Accelerated depreciation deductions – ability to deduct 50% of the cost of the asset plus normal depreciation deductions on the remaining cost amount in the year of purchase. | · Annual turnover < $500m · New assets acquired from 12 March and used or installed ready for use by 30 June 2021 | · 2019-20 and 2020-21 tax return lodgment |
| 1 Jan 2020 – 30 Sept 2020 | · Wage subsidy of 50% of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Accessible to businesses with less than 20 employees. Employers receive up to $21,000 per apprentice ($7,000 per quarter). | · Businesses with < 20 employees · Employee must have been paid by business from 1 March 2020 | · Applications from 2 April through Australian Apprenticeship Support Network providers |
| 25 March – 24 September 2020 | · Solvency safety net – temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. | · Companies and directors · Debts incurred in the ordinary course of running the business | |
| 25 March – 24 September 2020 | · Safe harbour from director’s duty to prevent trading while insolvent – a safe harbour for directors temporarily trading while insolvent as a result of the pandemic | · Company directors · Debts incurred in the ordinary course of running the business | |
· Ability to reduce PAYG instalment amounts to zero for March. · Ability to claim a refund of PAYG for some quarters. | · Financial distress | · Contact the ATO | |
| · Up to 6 month deferral for payment of activity statements, income tax, FBT, excise duty | · Financial distress | · Contact the ATO | |
| · Ability to move from quarterly to monthly reporting for those who need access to GST credits quickly | · Quarterly GST reporters | · Contact the ATO | |
| · Bank support for landlords who do not evict their commercial tenants | · Landlords of commercial property with loans <$10m | · Contact bank |
| From | Stimulus | Eligibility | Trigger for support |
| 25 March – 24 September 2020 | · Expanded access, reduced asset testing, and waiting times for social services payments Access to social services payments has been expanded to sole traders and contractors, and those who have been stood down. Waiting times to access support has also been reduced. Asset testing has also been suspended. Income tests still apply. | · Sole traders, the self-employed, casuals or contractors whose income has reduced · Permanent employees stood down (and not receiving any payments from employers or insurers) · Carers of people affected by Coronavirus · Subject to income testing | · Unemployed, stood down or reduced income |
| 27 April 2020 for 6 months | · $550 Coronavirus supplement – paid fortnightly to certain social services recipients for 6 months | · Individuals receiving eligible social services payments | · Automatic |
| 12 March 2020 – 13 April 2020, and 25 March – 24 Sept 2020 | · Tax-free $750 income support payments paid in March/ April and again in July to certain social services recipients | · Individuals receiving certain social services payments | · Automatic |
| 25 March – 24 September 2020 | · Bankruptcy safe harbour. Amount of debt required by a creditor to initiate bankruptcy proceedings increased to $20,000, and time to respond to bankruptcy notice increased to 6 months. | · Proceedings initiated between 25 March and 24 September 2020 | |
| 1 May 2020 | · Deeming rates reduced – from 1 May, deeming rates reduced to a lower rate of 0.25% and upper rate of 2.25%. |
| From | Stimulus | Eligibility | Trigger for support |
| 25 March – 24 September 2020 | · Early release of up to $10,000 in superannuation – individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. Withdrawals are tax-free and will not affect Centrelink or Veterans’ Affairs payments. | · Unemployed · Eligible certain social service payments · Redundancy, working hours reduced >20% , or for sole traders, reduction in turnover by >20% | · Applications through myGov from mid-April 2020 |
| 2019-20 and 2020-21 | · Temporary reduction in minimum superannuation draw down rates – superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21. | · All account-based and similar pensions | |
| 1 May 2020 | · SMSFs with commercial property able to provide rent relief to tenants | · Trustee assessment | · Pandemic related financial distress of tenant |
Contents
$1,500 JobKeeper subsidy to keep staff employed
Summary
Date | · From 30 March 2020 to 27 September 2020. · For employees employed at and from 1 March 2020 · First payments paid in first week of May 2020 |
Applies to | Based on comparable periods: · Employers <$1 bn that have experienced a downturn of 30% or more · Employers >$1bn that have experienced a downturn of 50% or more · ACNC-registered charities that have experienced a drop in turnover of 15% or more |
A subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid in arrears to businesses that have experienced a downturn of 30% or more (50% for businesses with turnover of $1bn or more). A 15% threshold will be used for ACNC-registered charities.
To be a part of the subsidy, employers will need to ensure that their employees receive at least $1,500 per fortnight (before tax).
Important
To be eligible to receive JobKeeper payments for April:
- Employers will need to ensure they meet all the eligibility criteria and their employees meet their eligibility criteria, and:
- Your eligible team members have signed the JobKeeper Payment Employee Nomination; and
- From 20 April, enrol for the JobKeeper scheme through the ATO’s business portal. Once registered, you must advise your employees in writing that you have registered them for JobKeeper payments.
This needs to be done by 26 April to be eligible for the first round of payments.
- Before the end of April, pay your eligible employees at least $1,500 per fortnight (for the fortnights 30 March – 12 April 2020, and 13 April to 26 April 2020). If your team are not currently receiving this amount, do not pay this amount until you have first ensured that all the eligibility criteria have been met and they have given you the signed nomination form.
Eligibility
An employer qualifies to receive a JobKeeper payment if:
- Eligible employer: The employer is an eligible employer (see Employer eligibility below); and
- Eligible Employee: The payment is for an eligible employee of the employer (see Employee eligibility below); and
- Wage condition: The employer has paid at least $1,500 to the eligible employee for the relevant fortnight. That is, the employer has satisfied the wage condition by making the payment to the eligible employee equal to or greater than the amount of the JobKeeper payment (less PAYG withholding and salary packaging) that the employer will receive for the employee for the fortnight.
- Notification: Employers must:
- Register themselves and their eligible employees for JobKeeper before the end of the relevant fortnight with the ATO (opens 20 April).
- Employers must confirm each employee’s registration for JobKeeper payments within 7 days.
1. Eligible Employers
Here’s how to work out if your business is an eligible employer:
- On 1 March 2020, carried on a business in Australia or was a non‑profit body pursuing its objectives principally in Australia*; and
- before the end of the fortnight, it met the decline in turnover test:
- >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)
- > 50% for large businesses:
- aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).
- >30% for all other qualifying entities.
- And, was not:
- on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
- a government body of a particular kind, or a wholly-owned entity of such a body; or
- at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual’s property.
- before the end of the fortnight, it met the decline in turnover test:
1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.
*For sole traders, directors or shareholders of a company, an individual who is a beneficiary of a trust, or a partner in a partnership, only one eligible business participant per entity is eligible for JobKeeper payments unless you can argue you are a genuine employee of the business. See Business owners below.
Turnover test
The decline in turnover test is a once only test. Once it has been met, there is no need to keep passing the test. If you do not meet the test now, you might be able to access the scheme at a later date but you can only claim payments from the time you register, i.e., there are no retrospective payments.
There are two decline in turnover tests you can use:
- the basic test, and
- the alternative test.
The basic decline in turnover test
To access the April 2020 JobKeeper payments, the basic decline in turnover test requires you to compare any of the following to calculate your fall in turnover:
- GST turnover for March 2020 with GST turnover for March 2019;
- Projected GST turnover for April 2020 with GST turnover for April 2019; or
- Projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.
If you are not registered for GST, the ATO has not as yet provided guidance but we recommend using your turnover for income tax purposes – what you report to the ATO.
If your business is part of a group, for the decline in turnover test you only take into account the turnover of the employer, not the other members of the group. Talk to us if you have a service entity connected to the trading business that is the employer.
Example
ABC Co Pty Ltd operates a search business that specialises in servicing the legal profession – 95% of their clients are practising solicitors. They are an SME business and would need to suffer a 30% reduction in revenue to be eligible for the JobKeeper payment.
ABC lodges its Business Activity Statements on a quarterly basis. 2019 GST Turnover data included:
March Qtr. 2019 | $1,820,000 |
June Qtr. 2019 | $2,610,000 |
Whilst the March 2020 BAS has not yet been completed, ABC know that their March quarter GST Turnover was $1,710,000.
ABC know that business was affected by COVID 19 in March. There was a material contraction in activity during the month and sales were down 50% in the second half of March. First half April sales have continued at this reduced level. Whilst ABC have all of their staff working remotely, this does not impede their ability to complete work or receive orders – all of which come in electronically or by phone.
The June quarter is normally their busiest quarter of the year. However, most of their solicitor customers have closed their offices and are working remotely. They do not expect this to change until sometime in June, at the earliest. Present activity level suggests that April sales will be in the range of $400,000 to $450,000. By comparison, sales for April 2019 were $672,000.
Forecast sales for May and June are similar to April, unless offices re-open in June and in which case there could be a late increase in business. On present information this appears to be unlikely.
ABC have not reviewed their GST Turnover for March 2019, however they conclude that, on best present estimate, their turnover for April 2020 will be less than April 2019 by more than 30% and further that the June 2020 quarter GST Turnover will be more than 30% less than the 2019 quarter. On this basis they register for the JobKeeper scheme.
The alternative decline in turnover test
The alternative decline in turnover test applies where the business does not have a relevant comparison period, for example, the business might have started in January 2020 or the business made a major acquisition. In these cases, the business will need to provide appropriate evidence to the Commissioner to show that the alternative test is satisfied.
Satisfying the alternative decline in turnover test – drought affected farm
Camille’s Farms carries on a farming business and retail flower sales in Australia. It was subject to a severe drought from 2018 until September 2019 that reduced the amount of flowers it could grow. It returned to normal crop output in January 2020. Its retail flower sales became significantly affected in March 2020.
It assesses its eligibility for JobKeeper payments on 3 July 2020 based on a projected GST turnover from its farming activities for the quarter beginning on 1 July 2020 of $2,000,000. The corresponding period is the quarter beginning on 1 July 2019 – a period in which Camille’s Farms was severely affected by drought. Because of the effects of the drought, Camille’s Farms had a much lower than usual current (2019) GST turnover of $2,500,000. The July 2020 quarter turnover falls short of the July 2019 quarter turnover by $500,000, which is 25% of the July 2019 quarter turnover. This does not exceed the specified percentage of 30%, so the decline in turnover test is not satisfied.
In the quarter beginning on 1 July 2017, Camille’s Farms had a current GST turnover of $4,000,000. This represents a shortfall of 50% when compared to its projected GST turnover for the quarter beginning on 1 July 2020. This exceeds the specified percentage of 30%, so the alternative decline in turnover test is satisfied.
Explanatory Memorandum: Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, Example 3
Satisfying the alternative decline in turnover test – start up
Seb Tech is a start-up technology company that began carrying on a business on 1 October 2019 selling its product to a range of businesses including cafes and restaurants. Despite strong initial sales, its sales declined substantially from March 2020. It assesses its eligibility for JobKeeper payments on 15 April 2020 based on a projected GST turnover for April 2020 of $15,000 from its technology business. However, because Seb Tech did not begin to carry on a business until 1 October 2019, there is no corresponding period in 2019 that applies.
As there is no corresponding comparison period in 2019, the Commissioner determines an alternative test under which the relevant comparison period is the average of the actual GST turnover in all of the months in which the business was being carried on prior to the turnover test period.
In October 2019 to March 2020, Seb Tech had an average monthly current GST turnover of $30,000. This represents a shortfall of 50% when compared to its projected GST turnover for April 2020 of $15,000. This exceeds the specified percentage of 30%, so the alternative decline in turnover test is satisfied.
Explanatory Memorandum: Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, Example 4
2. Eligible Employee
An eligible employee is an employee who:
- On 1 March 2020:
- Was aged 16 years and over; and
- Is an employee other than a casual, or a long-term casual*; and
- Was an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**
- And, at any point during the JobKeeper fortnight:
- Was an employee of the employer; and
- Was not an excluded employee:
- An employee receiving parental leave pay or dad and partner pay; or
- An employee receiving workers compensation payments in relation to total incapacity.
- And, has provided the JobKeeper Payment Employee Nomination to the employer:
- Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and
- Confirming that they have not agreed to be nominated by another employer; and
- If they are a long-term casual, they do not have permanent employment with another employer.
*A ‘long term casual employee’ is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on 1 March 2020 (1 March 2019 to 1 March 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.
** The person is a resident for JobKeeper purposes if: the person was an Australian resident within the meaning of the Social Security Act 1991, i.e., the person’s usual place of residence was in Australia and the person was either an Australian citizen, the holder of a permanent visa, or the holder of a protected special category visa; or the person was a resident of Australia for the purposes of the ITAA 1936 and was the holder of a Subclass 444 (Special Category) visa. The inclusion of Subclass 444 (Special Category) visa is intended to apply to New Zealand citizens who have an established long-term employment relationship with an Australian employer on 1 March 2020.
Employees on leave, stood down or rehired
Employees that have been stood down (as opposed to having their employment terminated), are eligible if the other criteria are met. Employees can be stood down without pay under the Fair Work Act if they can’t be usefully employed because of a stoppage of work for any cause for which the employer can’t reasonably be held responsible. See the Fair Work Ombudsman’s website.
Employees on paid an unpaid leave (other than parental leave and dad and partner pay) are eligible to receive JobKeeper payments.
If an employee’s employment was terminated after 1 March 2020, they can be rehired and qualify for JobKeeper payments.
Business owners
Business owners:
- sole traders and the self-employed with an ABN, and
- one partner in a partnership, beneficiary of a trust, director or shareholder who works in the business (i.e., only one person in a partnership, one beneficiary of a trust, or one director / shareholder are eligible for JobKeeper payments).
will be eligible for the payment if the following conditions are met:
- The entity carried on a business on 1 March 2020 and is not a not-for-profit entity; and
- Had an ABN on 12 March 2020; and
- Had some business income in the 2018-19 income year included in a tax return that was lodged by 12 March 2020; or made some supplies connected with Australia in a tax period that started on or after 1 July 2018 and ended before 12 March 2020 and recorded this on an activity statement lodged with the ATO by 12 March 2020. The Commissioner can potentially extend the deadline for holding an ABN, lodging the 2019 tax return or lodging a relevant activity statement.
- Passed the decline in turnover test; and
- The individual was not:
- employed by the business at any time in the relevant fortnight; or
- a permanent employee of another entity at the time the individual gives the nomination notice (i.e., they do not hold a full time or part time role with another employer); or
- a nominated JobKeeper employee of any other business; or
- entitled to parental leave pay or dad and partner pay or workers’ compensation payments for being totally incapacitated for work.
As at 1 March 2020, the individual satisfied all of the following:
- Aged 16 years or over; and
- Actively engaged in the business;and
- An Australian resident under the Social Security Act or an Australian tax resident who holds a special category visa **
If the criteria have been met, the individual is eligible if they were actively engaged in the business in the fortnight of the JobKeeper payment, and they agreed to be nominated for JobKeeper payments and confirmed they pass the eligibility criteria.
What about the directors who work in the business?
If more than one director wants to access JobKeeper payments, they need to meet the eligibility criteria of an employee (see 2. Eligible employee). To be an employee a director would have received salary/wages and this has been reported as salary/wages on activity statements, payment summaries, tax returns etc. If a director merely receives a distribution from the business then they are unlikely to be an employee.
3. Wage Condition
To be eligible to receive JobKeeper payments, the employer must meet a wage condition. That is, employers must have paid the eligible employee:
- A minimum of $1,500 (before tax) for the relevant fortnight; or
- The amount payable to the employee for the performance of work during that fortnight if it is more than $1,500.
An employer who claims the JobKeeper payment and fails to pay the minimum $1,500 to employees or deliberately misuses the payment may incur penalties of up to $126,00.
As the ATO will pay employers the JobKeeper payment monthly in arrears, it is essential that you ensure your employees continually meet the eligibility criteria. The payment is intended to reimburse the employer for amounts that have already been paid to employees.
To receive JobKeeper payments for April, eligible employees will need to have received at least $3,000 on or before end of April ($1,500 for 30 March– 12 April 2020, and $1,500 for the fortnight 13 April – 26 April 2020). If your team are not currently receiving at least this amount, do not pay this amount until you have first ensured that all the eligibility criteria have been met and they have given you the signed nomination form.
The first fortnight for a JobKeeper payment is 30 March 2020 to 12 April 2020. The last fortnight for a JobKeeper payment is 14 September to 27 September 2020. Any payments the employer has made prior to or after these fortnights, are not generally eligible for payment.
The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program runs until 27 September 2020, payments will stop if the employee is no longer employed by the relevant employer.
Example
Adam owns a real estate business with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30% in the coming months. The employees are:
Employee | Employment type | Salary per fortnight (before tax) |
Anne | Full-time | $3,000 |
Nick | Part-time | $1,000 |
Both Anne and Nick are still working in the business.
Adam registers his interest in the JobKeeper scheme (from 30 March 2020), then applies to the ATO providing details of his eligible employees. Adam also advises Anne and Nick that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.
Adam’s business is eligible to receive the JobKeeper Payment for each employee.
For Anne, the business will:
- Continue to pay Anne her full-time salary of $3,000 per fortnight before tax,
- Receive $1,500 per fortnight from the JobKeeper Payment
- Pay superannuation guarantee on Anne’s salary
For Nick, the business will:
- Continue to pay Nick $1,000 per fortnight before tax salary
- Pay Nick an additional $500 per fortnight before tax (totalling $1,500)
- Receive $1,500 per fortnight from the JobKeeper Payment
- Pay superannuation guarantee on Nick’s wage of $1,000 per fortnight (but can choose to pay SG on the full $1,500)
JobKeeper payments might also be available in relation to Adam.
Adapted from Treasury fact sheet: JobKeeper payment — information for employers
Superannuation guarantee
An employer will need to make superannuation contributions for any amount payable to an employee in respect of their actual employment, disregarding any extra payments made by the employer to satisfy the wage condition for getting the JobKeeper payment. For example, if the work actually done by an employee over a period entitled them to be paid $1,000, but the employer paid them $1,500 to satisfy the wage condition for a JobKeeper fortnight, then the employer will only be required to make superannuation contributions in relation to $1,000. Employers can choose to pay superannuation guarantee on the full amount.
When and how are payments made by the ATO?
If the Commissioner is satisfied that the employer is entitled to the JobKeeper payment, the Commissioner must pay $1,500 to the employer for each eligible employee (or business participant) by the later of:
- 14 days after the end of the calendar month in which the fortnight ends; and
- 14 days after the Commissioner is satisfied that the employer or business is entitled to the payment for the fortnight.
Payments will be made monthly by the ATO. That is, an eligible employer with three eligible employees that qualify for both fortnights in June 2020, would generally receive $9,000 by 14 July 2020.
The payment of an amount by the Commissioner to an entity does not affect whether the entity is actually entitled to the amount.
Monthly reporting obligations
Each month, businesses participating in the JobKeeper scheme will need to report to the Commissioner their:
- Current GST turnover for the reporting month; and
- Projected GST turnover for the following month.
within 7 days of the end of the month.
4. Notification
Employers must:
- Elect to participate in the JobKeeper scheme before the end of the JobKeeper fortnight; and
- For April 2020, the employer will need to register by 26 April 2020 unless the ATO accepts a later date.
- Complete and hold on file the JobKeeper employee nomination for eligible employees – completed by both employees and employers; and
- Notify the ATO of an eligible employee’s:
- Name
- Type of employment
- Residency status
- And, notify employees that they are nominated employee within 7 days of notifying the ATO.
An employer will also need to notify the ATO if they no longer wish to participate in the JobKeeper scheme.
Interaction with the Fair Work Act
Amendments have been made to the Fair Work Act to support the practical operation of the JobKeeper scheme.
In addition to the requirement that at least the full $1,500 per fortnight is paid to the nominated employee, employers eligible for the scheme are able to request employees to change:
- The days or times when the employee is to perform work;
- Annual leave arrangements, including at half pay (annual leave balances cannot fall below 2 weeks).
The amendments allow employers to redirect resources by giving a direction (JobKeeper enabling direction) to:
- Change the hours of work including standing down an employee (where they cannot be usefully employed because of changes to business attributable to the Coronavirus pandemic or government initiatives to slow Coronavirus transmission), through the JobKeeper enabling stand down direction;
- Not work on a day or days on which the employee would usually work;
- Work for a lesser period than the period which the employee would ordinarily work on a particular day or days;
- Work a reduced number of hours (compared with the employee’s ordinary hours of work), including reducing hours to nil;
- Give staff different types of work to do; or
- Work from different locations.
The employer cannot unreasonably refuse a request by an employee to engage in secondary employment, or undertake additional training or professional development.
The direction must not be unreasonable, the employer must provide three days notice (or a lesser period by agreement), and the direction must be necessary to continue the employment of one or more employees.
Employers cannot reduce the hourly rate of pay paid to an employee.
All directions from employers that change an employee’s conditions must be in writing.
The employer will also need to prove that they have satisfied the conditions. For example, an employee who usually works weekends could reasonably be required to work on weekdays in a situation where their employer’s business can no longer trade on weekends as a result of the Coronavirus pandemic.
Leave and other entitlements
Where an employer makes a direction to change an employee’s conditions, leave, redundancy pay and pay in lieu of notice of termination accrue as if the direction had not been made. That is, if an employer requires an employee to reduce their ordinary hours of work, their leave accrues as if the employee worked their ordinary hours – leave accrues as if nothing has changed.
These amendments to the Fair Work Act only apply to employers within the JobKeeper scheme.
Any disputes will be mediated by the Fair Work Commission.
What happens if I get it wrong?
If you claim the JobKeeper subsidy and whether you or the employee was not eligible, the Tax Commissioner can claw back any ineligible payments made. In addition, general interest charges apply.
If you have paid employees the $1,500 amount only to find you or they are not eligible, there is no recourse to claw back these payments to employees.
Tax free payments up to $100,000.00 for employers
Summary
Date |
|
Applies to |
|
The cashflow boost is triggered when eligible businesses lodge their Activity Statement – no separate application form needs to be submitted. The boost will generally reduce any liability on your activity statement (meaning you pay less to the ATO). Where the cashflow boost exceeds the liabilities owed to the ATO, you should generally receive a refund of the excess within 14 days. |
Eligibility
Cash flow support is available to businesses (including not-for-profits and charities) with:
- Aggregated turnover less than $50 million in the previous financial year, that
- Employ staff and make payments to them between 1 January 2020 – 30 June 2020.
In order for a business to qualify for this support it must have held an ABN on 12 March 2020. It must also have derived some business income in the 2018-19 income year and lodged the 2019 tax return by 12 March 2020 or made a supply of goods or services connected with Australia at some point during a GST period starting on or after 1 July 2018 and ending before 12 March 2020 and lodged a relevant activity statement by 12 March 2020. The Commissioner has some limited discretion to extend the deadline for lodging a 2019 tax return or activity statement in connection with this measure.
For charities, the rules are more flexible as the Government recognises that new charities might be established in response to the pandemic. For non-profit organisations to qualify for this measure they need to be a not-for-profit body and have aggregated turnover of less than $50m in the previous financial year or the Commissioner must be reasonably satisfied that turnover for the current year would be less than $50m.
The legislation includes integrity rules to prevent artificial or contrived arrangements or schemes being used to access the funding.
How the support is calculated
The support will be provided in two tranches.
Under the first tranche the support is calculated based on the amounts actually withheld from payments to employees, directors and certain contractors. If the entity is a quarterly lodger then the support is equal to 100% of the amounts withheld from payments to staff during the March 2020 and June 2020 quarters. If the entity is a monthly lodger then the support is equal to 300% of the amounts withheld from payments to staff in March 2020 plus 100% of the amounts withheld from payments in April 2020, May 2020 and June 2020.
The first tranche support amounts are subject to a cap of $50,000. However, a minimum amount of $10,000 will apply to all eligible entities and this will be provided in the first period they are eligible. This could be relevant to entities that have employees, but the withholding amount is nil or a relatively low amount.
Under the second tranche, entities that were eligible to support amounts in the first tranche will receive the same total amount again even if their circumstances have changed. However, the support payments will be spread out. Quarterly lodgers will receive 50% of the first tranche amount for each of the June 2020 and September 2020 quarters. Monthly lodgers will receive 25% of the first tranche amount for each of the June 2020, July 2020, August 2020 and September 2020 periods.
Here’s how the cash flow stimulus looks for quarterly and monthly lodgements.
Quarterly activity statement lodgement | ||
Tranche 1 | March 2020 | 100% of PAYG withholding up to a maximum of $50,000 |
June 2020 | Where the March quarter did not reach the $50,000 maximum, any remaining amount up to 100% of the PAYG withholding amount | |
Tranche 2 | June 2020 | 100% of the Tranche 1 amount (i.e., up to a maximum of $50,000) provided in two equal amounts |
September 2020 | ||
Monthly activity statement lodgement | ||
Tranche 1 | March 2020 | 300% of PAYG withholding up to a maximum of $50,000 |
April 2020 | Where March 2020 did not reach the $50,000 maximum, any remaining amount up to 100% of the PAYG withholding amount | |
May 2020 | ||
June 2020 | ||
Tranche 2 | June 2020 | 100% of the Tranche 1 amount (i.e., up to a maximum of $50,000) provided in four equal amounts |
July 2020 | ||
August 2020 | ||
September 2020 | ||
How the support is provided
The business or non-profit entity will generally need to lodge its activity statement for the relevant period to trigger the cash flow support. Special rules are in place for large withholders that pay amounts twice weekly. In these circumstances, payments are due at the time the entity pays or is paid their GST net amount for the tax period most closely corresponding to the period for which payment is made.
As a starting point, all eligible entities will receive between $10,000 and $50,000 following the lodgement of the March activity statement.
The Commissioner has some discretion on how the cash flow support is provided to eligible entities. For example, the ATO could decide to allocate the support amount to the entity’s running balance account or could decide to apply it against other tax debts. In practice it is expected that the support amounts will generally be applied against liabilities arising from the same activity statement, reducing the net amount that needs to be paid to the ATO for that month or quarter.
Where the support amount exceeds any tax liabilities that are owed by the entity, then the excess amount will be paid as a cash refund. The Commissioner also has the discretion to provide cash refunds to entities rather than applying the amounts against tax liabilities.
Example – Sarah’s Construction Business
Sarah owns and runs a building business in South Australia and employs eight full time construction workers who each earn $89,730 per year. Sarah reports withholding of $15,008 for her employees on each of her monthly Business Activity Statements (BAS).
Sarah will be eligible to receive the cash flow assistance payment on lodgment of her BAS. The business receives:
Activity statement period | Credit amount | |
March | $45,024 | 300% of total withholding |
April | $4,976 | Remainder up to $50,000 cap |
May | $0 | |
June | $12,500 | 25% of Tranche 1 amount |
July | $12,500 | 25% of Tranche 1 amount |
August | $12,500 | 25% of Tranche 1 amount |
September | $12,500 | 25% of Tranche 1 amount |
The business will receive a total of $100,000 under this measure.
Adapted from fact sheet: Cash flow assistance for businesses
Increase and extension of the instant asset write-off
Summary
Date | Assets acquired after the applicable date and first used or installed ready for use for a taxable purpose between 12 March 2020 and 30 June 2020 |
Applies to | Businesses with aggregated turnover less than $500m |
How the support is calculated
The instant asset write-off enables your business to claim an upfront deduction for the full cost of depreciating assets in the year the asset was first used or installed ready for use for a taxable purpose.
For example, if your company’s turnover is under $50m and you purchase an eligible asset for $140,000 (GST-exclusive) on 1 June 2020 (and install it ready for use by 30 June 2020), then a deduction of $140,000 can be claimed. If the company is subject to a tax rate of 27.5% then this should reduce the tax payable by the company for the 2020 income year by $38,500.
If your business is likely to make a tax loss for the year, then the instant asset write-off is unlikely to provide a direct short-term benefit to you. However, if this measure is likely to reduce the taxable income of the business for the year then it may be possible to vary upcoming PAYG instalments to improve cash flow.
If the asset is a luxury car then the deduction will be limited to the luxury car limit. The business use percentage of the asset also needs to be taken into account in calculating the deduction. For example, if a sole trader acquires an asset for $40,000 but only expects to use it 80% in the business then the immediate deduction would be $32,000.
The increase to the instant asset write-off threshold in the stimulus package is the fourth increase or extension and businesses will need to be wary of what they are claiming and when:
Instant asset write-off thresholds | Small Business* | Medium business** | Large business*** |
1 July 2018 – 28 January 2019 | $20,000 | – | – |
29 January 2019 – 2 April 2019 | $25,000 | – | – |
2 April 2019 – 12 March 2020 | $30,000 | $30,000 | – |
12 March 2020 – 30 June 2020 | $150,000 | $150,000 | $150,000 |
* aggregated turnover under $10 million
** aggregated turnover under $50 million
***aggregated turnover under $500 million
At this stage it is expected that the instant asset write-off threshold will reduce back to $1,000 from 1 July 2020.
How the support is provided
The instant asset write-off is a tax deduction that reduces the tax liability of your business. It is triggered when you lodge the business’s 2019-20 tax return.
Example
Samantha owns a company, Sam’s Specialty Roasters Pty Ltd, a large food processing business in Brisbane. Sam’s Specialty Roasters Pty Ltd has an aggregated annual turnover of $150 million for the 2019-20 income year.
On 1 May 2020, Samantha purchases five new conveyor belts for her production facility for $40,000 each, exclusive of GST, for use in her business.
Under the $150,000 instant asset write-off, Sam’s Specialty Roasters Pty Ltd can claim an immediate deduction of $200,000 for the purchase of the conveyor belts (i.e., $40,000 for each conveyor) in the 2019-20 income year ($195,544 more than under the previous rules). At the company tax rate of 30%, this will reduce the tax payable by Sam’s Specialty Roasters by $60,000 (assuming the company is in a tax payable position for the year).
If the business has paid PAYG instalments and these exceed the tax payable for the year, then the excess should be refunded to the company or applied against other tax debts owed to the ATO.
If this additional deduction pushes the company into a tax loss position then this will be carried forward to future income years, subject to some loss recoupment tests.
Adapted from Treasury Fact sheet: Delivering support for business investment
Low general pool balances for small business entities
The changes also ensure that a $150,000 threshold applies in determining whether the balance of a small business entity general pool is deducted in full in the year ending 30 June 2020.
That is, the rules ensure that the entire pool balance is written off if the business has a SBE pool and the result of the formula below is less than $150,000 as at 30 June 2020:
- Start with the opening balance of the pool for the year;
- Add the business use percentage of any assets added to the pool for the year;
- Less the business use percentage of any assets disposed of during the year.
If the result of the formula above is less than $150,000 then the business claims a deduction for that amount in the 2020 tax return and the pool balance becomes nil. Note that the formula above does not take into account the current year depreciation deduction amount for the pool.
Accelerated depreciated deductions
Summary
Date | Assets acquired after the applicable date and first used or installed ready for use for a taxable purpose between 12 March 2020 and 30 June 2020 |
Applies to | Businesses with aggregated turnover less than $500m |
Eligibility
Businesses with a turnover of less than $500 million can access accelerated depreciation deductions for assets that don’t qualify for an immediate deduction.
This incentive is only available in relation to:
- New depreciable assets
- Acquired on or after 12 March 2020 that are first used or installed ready for use for a taxable purpose by 30 June 2021.
It does not apply to second-hand assets or buildings and other capital works expenditure. The rules also won’t apply if the business entered into a contract to acquire the asset before 12 March 2020.
How is the support calculated?
Businesses will be able to deduct 50% of the cost of a new asset in the year of purchase. They can then also claim a further deduction in that year by applying the normal depreciation rules to the balance of the cost of the asset.
Accelerated depreciation deductions will apply from 12 March 2020 until 30 June 2021. This will bring forward deductions that would otherwise be claimed in later years.
For example, let’s assume that a business purchases a new truck for $250,000 (exclusive of GST) in July 2020. In the 2020-21 tax return the business would claim an upfront deduction of $125,000. The business would also claim a further deduction for the depreciation on the balance of the cost. If the business is a small business entity and using the simplified depreciation rules, this would mean an additional deduction of $18,750 (i.e., 15% x $125,000). The total deduction in the 2020-21 tax return would be $143,750. Without the introduction of accelerated depreciation the business would have claimed a deduction of $37,500 (i.e., 15% x $250,000).
How is the support provided?
The accelerated depreciation rules provide a tax deduction, which reduces taxable income and the tax liability of the business. It is triggered when you lodge the business’s 2019-20 or 2020-21 tax return. The initial deduction is claimed in the tax return for the year in which the asset is first used or installed ready for use for a taxable purpose.
Example
J Construction Solutions Pty Ltd has an aggregated annual turnover of $200 million for the 2020-21 income year.
On 1 July 2020, J Construction Solutions Pty Ltd installs a $1 million truck mounted concrete pump for use in the business. Under the new rules, J Construction Solutions Pty Ltd can claim a depreciation deduction of $650,000 in the 2020-21 income year. This consists of 50% of the concrete pump’s value
($500,000) plus 30% of the remaining $500,000 under existing depreciation rules ($150,000). This is $350,000 more than under the previous rules.
At the 30% company tax rate, this deduction will reduce the tax liability of J Construction Solutions Pty Ltd by $195,000 for the 2020-21 income year, assuming it is in a tax payable position.
If the business has paid PAYG instalments and these exceed the tax payable for the year, then the excess should be refunded to the company or applied against other tax debts owed to the ATO.
If this additional deduction pushes the company into a tax loss position then this will be carried forward to future income years, subject to some loss recoupment tests.
Adapted from Treasury Fact sheet: Delivering support for business investment
Wage subsidy of up to 50% of an apprentice or trainee wage
Summary
Date | Apprentice/trainee wages from 1 January 2020 – 30 September 2020 For apprentices employed at 1 March 2020 |
Applies to | Apprentices employed by small business (<20 employees) at 1 March 2020 Larger organisations employing apprentices/trainees let go by a small business after 1 March 2020 |
Eligibility
Eligibility for the apprenticeship incentive depends on who the apprentice was employed by and when.
The apprenticeship incentive is available to:
- Small businesses (including those using Group Training Organisations) employing fewer than 20 employees; and
- Other businesses or Group Training Organisations employing apprentices who have been displaced by small business employers.
The small business employer must have employed the apprentice at 1 March 2020 and will need to provide evidence of wages paid to the apprentice. If the small business subsequently is unable to retain the apprentice, another business can access the incentive if they then employ and pay wages to the apprentice.
If the business becomes eligible for a JobKeeper payment in relation to the apprentice or trainee then they will no longer be eligible for this subsidy.
How is the support calculated
Employers will be reimbursed 50% of an eligible apprentice’s wage up to a maximum of $21,000 per apprentice ($7,000 per quarter).
How is the support provided?
Employers can register for the subsidy from 2 April 2020 (final claims by 31 December 2020). The Australian Apprenticeship Support Network will assess the eligibility of claims.
Example
David’s Plumbing is a small business employing 10 people, including two full-time Australian Apprentices.
Taylor is a first year Australian Apprentice, aged 20, undertaking a Certificate III qualification. She commenced her apprenticeship with David’s Plumbing on 6 February 2020. Taylor receives a weekly wage of $532.89.
Lisa is a third year Australian Apprentice, aged 29, undertaking a Certificate IV qualification. She commenced her apprenticeship with David’s Plumbing on 18 November 2017. She receives a weekly wage of $772.71.
David’s Plumbing is eligible for apprenticeship incentive of 50% of the apprentices’ wages been paid by David’s Plumbing since 1 January 2020.
Assuming David keeps both apprentices working at their same rates between 1 March 2020 and 30 September 2020, David’s Plumbing will receive:
Apprentice | Total reimbursement | Employment period |
Taylor | $9,059 | 6 February 2020 to 30 September 2020 |
Lisa | $15,068 | 1 January 2020 to 30 September 2020 |
Adapted from Treasury Fact sheet: Cash flow assistance for business
ATO Assistance and Support
It’s important that you continue to meet your compliance obligations – lodging returns and activity statements, single touch payroll, and superannuation guarantee payments – even if that tax payment has been deferred or waived.
It’s also important that amounts you declare to access various stimulus package initiatives match what you have declared to the ATO.
If you need assistance to defer tax payments, manage reporting, or manage tax debt, you or your adviser will need to contact the ATO.
Support from the ATO includes:
- Ability to vary PAYG instalment amounts to zero for March 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.
- Up to 6 month deferral for the payment of business activity statements (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise duty
- Businesses on a quarterly reporting cycle able to opt into monthly GST reporting for faster access to GST refunds where applicable
- Remitting any interest and penalties, incurred on or after 23 January 2020, applied to tax liabilities
- Low interest payment plans for tax debt
If you have an outstanding tax debt, tax relief might be available in serious and exceptional circumstances, such as where you cannot pay for food or accommodation.
The ATO will also be involved in administering certain aspects of the Government’s stimulus measures. Certain aspects of the rules are subject to the ATO’s discretion and you or your adviser can contact the ATO to discuss this further.
Access to Financial Support
Underwriting small business loans
Date | Early April 2020 |
Applies to | Small business |
Despite record low interest rates, getting a loan can be difficult, particularly in this environment.
The Federal Government has underwritten up to $40 billion in SME loans. The Coronavirus SME Guarantee scheme is aimed at small businesses that would be viable except for the pandemic. Under the scheme, the Government will provide a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital. The loans will be:
- A maximum size of $250,000;
- Have a loan term of up to three years, with an initial six month repayment holiday; and
- Will be in the form of unsecured finance (so you don’t have to put your house on the line).
The loans are subject to the lender’s credit assessment although the Government expects that “lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.”
You should expect to see products from the financial institutions coming through in April. The products are expected to provide facilities that only have to be drawn if needed. This will mean that you will only incur interest on the amount you draw down. If you do not draw down any funds from the facility, no interest will be charged, but you will have the flexibility to draw down in the future.
Lenders will also be exempt from responsible lending obligations for existing small business clients.
Outside of the big banks, the Government has provided $15 billion in funding through the Australian Office of Financial Management to invest in structured finance markets used by non-banks to support lending for residential mortgages, small business lending, and consumer lending (credit cards, cars and personal loans).
Support from your Bank
Australian banks will defer loan repayments for six months for businesses including sole traders who need assistance because of COVID-19. The support is available for those with total business loan facilities of up to $10 million.
Note that your loan will still accrue interest even if you have deferred payments.
The banks are also offering loans, including overdrafts, with no repayments for the first six months, at very low interest rates, supported by the Government through an SME Loan guarantee.
Other assistance can include fees waived, loans restructured, and further credit offered to get through the pandemic.
To access this support, you need to stay in contact with your bank and talk to them about the support you need. Assistance is not automatic.
Support from State & Territory Governments
- Australian Capital Territory
- New South Wales
- Northern Territory
Australian Capital Territory
Payroll tax waivers and deferrals
All businesses whose operations are directly affected by the ‘prohibited activities list’ will receive a six-month waiver of payroll tax from April to September 2020. Businesses need to apply to the ACT Revenue Office to receive the waiver.
- For those who lodge their payroll tax assessment monthly, the first waiver will be applied to their April payroll tax return, which is usually payable by 7 May.
- For those who lodge their payroll tax assessment annually, the waiver will be applied to their account when the return is received at the end of the 2019-20 financial year.
All ACT businesses with grouped Australia wide wages of up to $10 million, can apply to defer their 2020-21 payroll tax, interest free until 1 July 2022.
Food and liquor licensing fee waiver
Licenced venues and off licenced venues with gross liquor purchase value of below $3 million per annum will receive a 12-month waiver of their food business registration and liquor licencing fees from 1 April 2020 and outdoor dining fees for 2020-2021 will be waived.
There are no refunds for those who have prepaid. Instead, an additional 12 months will be added to the license.
Electricity rebates for small business
Small business owners with electricity usage below 100 megawatts per year will see rebates of $750 automatically applied to their next electricity bill in June or July 2020. The rebate is automatic.
Rideshare and taxi plate fees
Rideshare vehicle licence fees will be waived for 12 months for rideshare operators from 1 April 2020 as part of the normal licencing processes. No refunds will be paid to those that have paid. Instead, an additional 12 months credit will be added to the license at the next due date.
For government leased taxi plate fees (including wheelchair accessible taxis), all taxi plate fees have been waived. One off payments of up to $5,000 are also being made to taxi drivers who lease their taxi plates from private owners. Taxi drivers who lease their plates from a private owner will need to email Access Canberra at [email protected] for these payments to be progressed.
Commercial general rates
Commercial property owners with an Average Unimproved Value of $2m or less will be eligible for a rebate. Commercial rate payers will receive a credit of $2,622 to their 2019-20 general rates in quarter four.
Tenants in Government owned property
A deferral of rent for up to six months is available on a case by case basis for commercial tenants of ACT Government properties.
New South Wales
Payroll tax refunds and deferrals
For all NSW employers, on 1 July 2020, the tax-free threshold will increase from $900,00 to $1 million.
If your business has grouped Australian wages of $10m or less in 2019-20, then:
- Your annual liability will be reduced by 25% when you lodge your annual reconciliation (due 28 July). Any refunds owing will be paid at that time.
- For monthly payers, no payment will be required for March 2020, April 2020, or May 2020, and you have an option to defer for an additional 3 months (as long as your total grouped payroll remains no more than $10m).
For businesses with grouped Australian wages above $10m in 2019-20, you have the option to defer the lability for up to 6 months. There is no need to make payment for March 2020 (normally due 7 April).
See Revenue NSW
$10,000 grants to small business
Grants of up to $10,000 will be available to NSW small businesses impacted by the public health orders to restrict social gathering and movement to cover unavoidable costs such as utilities, overheads, legal costs and financial advice.
To be eligible for the grants, your business must:
- Have between 1 and 19 employees and a turnover of more than $75,000
- Payroll below $900,000 (the NSW Government 2019-20 payroll tax threshold)
- Have an ABN as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020
- Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020. Highly impacted industries include:
- Retail trade
- Accommodation and food services
- Rental, hiring and real estate services
- Administrative and support services
- Arts and recreation services.
- Use the funding for unavoidable business costs.
The Grant Application form and requirements will be available on the Service NSW website by 17 April 2020 until 1 June 2020.
Flexible long service leave arrangements
From 24 March 2020 for six months, employees and employers can agree:
- For the employee to take long service leave without the normal one month’s notice period.
- For the employee to take long service leave in smaller blocks (rather than blocks of a month). The legislation is vague about what this means but gives the example of an employee taking long service leave for one or two days a week.
Fee and licence relief
A range of licence and permit fees have been waived for business for 12 months. For most licences, when you make a new application or need to renew you will not be charged. The relief period is 12 months from 1 April 2020, or 15 April 2020, or 20 April 2020. These include:
- Liquor and gaming – New liquor licence application fees and pro-rata liquor licence fees, annual liquor licence base fees and trading hours risk loading fees. Compliance risk loadings will not be waived, but deferred and included as part of 2021-2022 annual liquor licence fees. See liquor and gaming fees.
- NSW fair trading licenses – Paintball venue permit, tattoo parlour operator licence, home building contractor licence, trade or specialist contractor licence, motor vehicle repairer specialist licence, licence fee waivers for tattooists, home building (Qualified Supervisor Certificates and Tradesperson Certificates), and Motor Vehicle Tradesperson Certificates. See fair trading fee waivers.
- SafeWork NSW – Pyrotechnician licence, registration permit of amusement device, asbestos removal licences and asbestos assessor licence, demolition licence, high risk work licence, high Risk Work Assessor Accreditation, SafeWork registered training organisations (for asbestos, construction and high risk work training) – new applications only. See SafeWork fee waivers.
Please ensure you still apply for your relevant licenses.
Government owned property - deferral of commercial rents
For commercial tenants with less than 20 employees, rent in Government owned property will be deferred for six months.
Land tax reduction for residential and commercial landlords
Landlords can apply for a land tax reduction of up to 25% on a parcel of land in the 2020 land tax year when:
- Your land is used for business or residential purposes
- You’re leasing property on that parcel to a residential tenant – or a business tenant with annual turnover of up to $50 million – who can demonstrate financial distress resulting from the COVID-19 outbreak
- You reduce the rent of the affected tenant by at least as much as the tax reduction
- The land tax is directly related to the property for which rent has been reduced.
Financial distress is considered to be:
- for commercial tenants – a 30% drop in revenue due to the COVID-19 pandemic
- for residential tenants – a 25% drop in household income due to COVID-19.
To be eligible, land tax must be payable in 2020, and your tenant is suffering financial distress and you have reduced the rent payable by at least the amount of the land tax reduction.
Landlords can apply to have the reduction paid as a refund.
Northern Territory
Payroll tax waivers and deferrals for impacted business
For businesses able to demonstrate substantial hardship due to the coronavirus crisis, from 1 April 2020 the NT Government will:
- Abolish payroll tax for six months for smaller and medium-sized businesses, and
- Defer payroll tax for six months for large businesses.
Businesses will need to apply from 1 May 2020.
Power, water and sewage bills reduced by 50%
For businesses able to demonstrate substantial hardship due to the coronavirus crisis, from 1 April 2020 the NT Government will reduce power, water and sewage bills (for regulated utility tariffs) by 50%.
Businesses will need to apply from 1 May.
Conditions for access to support by landlords
To access the payroll tax initiatives and the reduction in power, water and sewage, businesses that are landlords will need to adhere to an additional condition. When commercial tenants demonstrate economic hardship and request rent relief, landlords will be expected to negotiate relief in line with the Code of Conduct for commercial tenancies, agreed to by National Cabinet.
The Government will also waive the property activation levy for relevant landlords whose property becomes vacant due to the coronavirus crisis.
If commercial landlords do not negotiate in good with faith their tenants, landlords will not be eligible for this relief, or any of the economic support packages recently announced by the Government.
Business survival fund
The survival fund is a lump sum payment that provides:
· An immediate survival payment; and
· A rapid adaption payment
to businesses impacted by the social distance restrictions.
To access the fund, businesses must demonstrate significant impact, in particular in relation to turnover, staffing levels and fixed and operational costs.
The immediate survival payment amounts are:
- $2,000 for sole traders
- $5,000 for businesses with 2 to 5 employees (FTEs)
- $20,000 for businesses with 6 to 19 employees (FTEs)
- $50,000 for businesses with more than 20 employees (FTEs).
The rapid adaptation payment provides:
- Up to $2,000 for businesses with one employee (FTE) and
- Up to $5,000 for other eligible businesses to offset costs incurred in adapting their current business model to suit restrictions.
For details, see Small Business Survival Fund
Business improvement grants
Business improvement grants of up to $10,000 for shopfront businesses to purchase goods and services to make permanent physical improvements to a business (land and/or building) that help its operations and customer experience.
For details, see Business Improvement Grants
Queensland
Payroll tax
If your business is an employer that pays $6.5 million or less in Australian taxable wages:
- 2 months of your payroll tax will be refunded. The QLD Office of State Revenue will contact eligible employers directly to issue the refund, and
- No payroll tax needs to be paid for 3 months.
In addition, you can apply for a deferral of payroll tax for the 2020 calendar year.
Employers (or part of a group of employers) that pay more than $6.5 million in Australian taxable wages that have been negatively affected by coronavirus, can apply (by 31 May 2020) for a:
- Deferral of payroll tax for the 2020 calendar year (If you have already applied for a deferral, you do not need not reapply) (apply here), and
- 2 month payroll tax refund (apply here).
Payroll tax returns will still need to be lodged.
Land tax relief
Landlords can apply for:
- a land tax rebate reducing land tax liabilities by 25% for eligible properties for the 2019-20 assessment year
- a waiver of the 2% land tax foreign surcharge for foreign entities for the 2019-20 assessment year
- a 3-month deferral of land tax liabilities for the 2020-21 assessment year.
You do not need to apply for the foreign surcharge waiver or the 3-month deferral, the Government will reassess land tax to apply the waiver and provide a refund where the assessment amount has already been paid.
To receive the rebate, a least one of the following circumstances must apply:
- You are a landowner who leases all or part of a property to one or more tenants and all the following apply.
- The ability of one or more tenants to pay their normal rent is affected by the coronavirus (COVID-19) pandemic.
- You will provide rent relief to the affected tenant(s) of an amount at least commensurate with the land tax rebate.
- You will comply with the leasing principles even if the relevant lease is not regulated.
- You are a landowner and all the following apply.
- All or part of your property is available for lease.
- Your ability to secure tenants has been affected by the COVID-19 pandemic.
- You require relief to meet your financial obligations.
- You will comply with the leasing principles even if the relevant lease is not regulated.
Jobs support loans of up to $250k with an initial interest free period
A loan facility of at least $500 million, interest free for the first 12 months, has been created to help business retain employees and maintain operations.
Low interest loans of up to $250,000 are available to assist with carry-on expenses such as employee wages, rent and rates and other related expenditure. The loans terms are:
- No repayments or interest charged for the first year
- Plus two years interest only
- 5% fixed interest rate
- 10-year term of loan
Eligible business types include sole traders, partnerships, private and public companies and trusts.
See the full requirements, and guidelines.
Agribusiness market diversification and resilience grants
The Market Diversification and Resilience Grants (MDRG) program is targeted to exporters and their critical supply chain partners, as well as industry organisations working with exporters to build resilience by diversifying into new markets.
To be eligible you must be one of the following at the time of your application:
- A Queensland-based agriculture, food, forestry or fishing exporter;
- A Queensland-based critical supply chain partner (e.g., fishing business, producer, grower, grower collective, wholesaler) to a Queensland-based agriculture, food, forestry or fishing exporter; or
- A not-for profit industry organisation working with Queensland-based agriculture, food, forestry and fishing exporters.
The organisation must also be:
- A small to medium sized business employing less than 200 full-time equivalent employees;
- Registered and operating in Queensland, have an ABN and registered for GST; and
- Trading viably for at least the past 2 years.
Applicants can apply for one grant. The program has two components:
Projects grants up to $50k
Project grant applications close 20 April 2020. The QLD Government will co-invest in eligible projects with grants of up to $50,000 (excluding GST). The grants are for projects such as market evaluation studies, staff training, new equipment, boat modifications etc.
The grant forms up to 50% of the total cost of a project activity or equipment purchase. Business should provide evidence of their contributions both in-kind (e.g., reasonable salary costs for key personnel, freight costs) and cash. Cash contributions must be at least 25% of total project costs.
See the grant terms and conditions. Download the application form.
Equipment purchases grants up to $7.5k
The QLD Government will co-invest up to 75% of the cost of new equipment such as freezers, vacuum packaging machines, etc up to $10,000 (excluding GST).
See the grant terms and conditions. Download the application form.
Electricity bill rebate
Sole traders, small and medium businesses will get a $500 rebate on their power bill. Any business
consuming less than 100,000 kilowatt hours will receive the rebate, which will be automatically applied on business electricity bills.
Rent relief for Government premises
The Government will provide 6 months relief for businesses who rent premises from the state government.
South Australia
Payroll tax waiver and relief
Payroll tax between April and September has been waived for businesses with an annual grouped payroll up to $4 million.
Employers with annual grouped payroll above $4 million can defer payroll tax payments for 6 months if they demonstrate “significant impacts on cash flow” because of the coronavirus.
Land tax relief
Individuals and businesses with outstanding quarterly land tax bills for 2019-20 will be able to defer payments for 6 months.
Liquor license fees waived for forced close downs
Liquor license fees for 2020-21 will be waived for hotels, restaurants, cafes and clubs forced to close as a result of social distancing restrictions.
Taxi industry support
Measures have been put in place to support the taxi industry including:
- A $4,300 ex gratia payment per metropolitan taxi; and
- Waiving a full year of operator accreditation and vehicle fees for metropolitan taxi operators for a twelve-month period.
Tasmania
Payroll tax waivers and rebates
Payroll tax waivers or rebates are in place for employers with Australian group wages of up to $5 million, for key industry sectors, and for those with employees under 24 years of age. Your annual adjustment return still needs to be lodged by 21 July 2020 even if payroll taxed is waived.
Tasmanian employer eligibility | Support |
· Australian group wages <$5m · Demonstrate operations impacted by COVID-19 | · 2019-20 payroll tax waived for 2019-20 financial year · Monthly returns for March, April and May not required |
· Hospitality, Tourism, and Seafood industries | |
· New employees aged 24 and under employed between 1 April and December 2020 | · 12 month payroll tax rebate |
Grants and loans
$2,500 emergency cash payments
$2,500 cash payment emergency grants for small business in the following industries (and suppliers who derive the majority of their income from these industries):
- Seafood
- Tourism and accommodation
- Hospitality
- Retail (including beauty and hairdressers, any business with a shop front)
- Arts and entertainment
- Fitness (includes personal trainers, gyms, yoga)
And, exporters who derived the majority of their 2018-19 income from international exports.
The grants are available to majority owned and operated Tasmanian businesses that are employers with under 20 full time equivalent employees on or before 31 January 2020, or sole traders, non-employing businesses and owner operator businesses (see the guidelines).
The Government has flagged further grants of $15,000 to small business in identified sectors that are experiencing severe financial hardship. Businesses should first apply for the $2,500 emergency grants to access the second round support.
Business Support Loan Scheme
The Business Support Loan Scheme provides interest free loans of between $20,000 and $250,000 to assist with business continuity such as the purchase of plant and equipment, moving to online sales and distribution, etc. Loans are available to those in the hospitality, tourism and seafood export sectors, as well as related supply chain businesses and those that can demonstrate they have been significantly impacted by the outbreak (see the guidelines). Apply here.
Waivers and capping of Government licensing, fees and charges
Liquor licensing reductions and waivers
50% discount on liquor licensing fees and waivers of all application fees for the 2020 calendar year (backdated to 1 January 2020).
Taxi license fees
Taxi license fees have been waived for the 2020 calendar year.
Energy and water
Water and electricity bills will be waived for the first quarterly bill received after 1 April 2020 for small business customers on Tariff 22, 94, 82 or 75, including those small businesses on market contracts.
Energy prices will also be capped and water prices frozen in 2020-21.
Fisheries license fees waived
12 month waiver of the annual fees for rock lobster, giant crab, fin fishers, and for abalone divers.
Land tax waived for impacted businesses
2020-21 land tax will be waived for commercial property owners financially impacted by COVID-19 where the land tax is paid by the business owner.
Vehicle registration
The roads component of motor tax and vehicle registration will be waived where the business is significantly impacted by measures relating to COVID-19. Small businesses that suspend activity can apply to freeze vehicle registrations for light and heavy vehicles for up to 12 months.
Government fees and charges
The Government will freeze all fees and charges subject to the Government Fee Units Act 1997.
Victoria
Payroll tax waivers and deferrals
If your business has annual taxable wages of up to $3m:
- 2019-20 Payroll tax is waived. State Revenue is contacting eligible businesses and refunding them directly (from 27 March 2020).
- Returns still need to be lodged but no further payments need to be made.
- 2020-21 Payroll tax can be deferred for July – September (first quarter). You will need to apply for the deferral.
The $3m eligibility threshold applies to each employer. Any member of a group that pays Victorian taxable wages of up to $3m per annum will be eligible for the relief.
Land tax deferrals
Landowners can defer their 2020 land tax payment if they have at least one non-residential property and total taxable landholdings below $1 million.
- Non-residential property includes; commercial property, industrial property, and vacant land (excluding residential vacant land).
Grants of up to $10,000
Businesses can apply for grants of up to $10,000 for costs such as utilities, rent and salaries, and activities to support business continuity planning. To be eligible, businesses must:
- Employ staff
- Been subject to closure or are highly impacted by Victoria’s Non-Essential Activity Directions issued by the Deputy Chief Health Officer to-date
- Have a turnover of more than $75,000
- Have payroll of less than $650,000
2020 Liquor licence renewals waived
2020 renewable liquor licence fees have been waived for coronavirus affected venues and small businesses. For those that have paid the licensing fee, refunds will be issued. If the license fee has not yet been paid, it will be waived.
Western Australia
Payroll tax waiver
Payroll tax will be waived for four months between 1 March 2020 and 30 June 20202 for businesses with Australia-wide annual wages of less than $7.5 million in 2019-20. This initiate replaces the previously announced deferrals.
For all Western Australian employers, on 1 July 2020, the tax-free threshold will increase from to $1 million.
Electricity bill credits for small business and charities
A $2,500 credit (as of March 2020) for Synergy and Horizon Power customers to reduce future electricity bills will be provided to:
- Small business customers that consume less than 50 megawatt hours per annum.
- Charities – for groups on community service and charitable accommodation electricity tariffs.
The credit will be allocated from 1 May 2020.
License fees for SMEs in affected industries
A wide range of license fees have been waived for 12 months for coronavirus impacted businesses including:
· Building services, plumbers and electricians;
· tourism businesses operating in national and marine parks;
· Boat registration and mooring fees for tourism operators and commercial fishers;
· commercial fisheries licences;
· Taxi booking service authorisation fees;
· Settlement agent licence fees; and
· Other statutory planning fees
Liquor licensing renewal fees
Liquor licence renewal fees for 2020 will be waived and refunds provided for businesses that have already paid.
On-demand transport industry relief
The WA Government has released a relief package for the on-demand transport industry. The full details are not yet available.
Regional taxi assistance payments
A payment (the sum has not yet been disclosed) will be made to approximately 200 former country taxi licensees who paid a sum to a third party to acquire a taxi-car business and were operating against that licence on 1 July 2019. The payments are expected to be made in July 2020.
$2,500 cash payment to authorised on-demand booking services
Approximately 600 authorised On-demand Booking Services that also hold an active Passenger Transport Vehicle (PTV) authorisation will receive cash payments of $2,500. These are largely sole traders or small and medium businesses providing taxi, tour and charter, luxury and special event services across Western Australia. The payments are expected to be made in July 2020.
Government owned property rent relief
The Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months.
