Tax and COVID-19 Update

Updated: May 21

Well… what a month April was, with the announcements from Federal and State Governments of their Stimulus Packages! Here is a summary of the stimulus packages. As always, we are here to help!


Cash Flow Boost:

  • This has been provided to employers with less than $50M in turnover, with a minimum of $10k and a maximum of $50k to be received from 28 April onwards, on lodgement of your Activity Statements.

  • A further minimum of $10k and a maximum of $50k will be received upon lodgement of Activity Statements from June to September 2020. This cash flow boost is credited to your tax account at the ATO and is not taxable income to your business.

JobKeeper:

  • Payments of $1,500 per fortnight for eligible businesses, with turnover of less than $1 billion, in respect of each eligible employee, eligible business participant or sole trader whose businesses suffered a reduction of income of 30% or more in any month from March to September.

  • The subsidy ends in respect of wages paid until 27 September 2020.

  • If you were not eligible for March or April you should review your eligibility as things change swiftly.

  • First payments were received on 7 May and were paid direct to the business bank accounts. The monies received are taxable income to your business.

State Government Grants:

  • $10,000 is available to eligible businesses who had an employee and whose income dropped by 75% or more in a 2 week period and were not registered for payroll tax.

  • The monies are received within 7 days of lodgement of the application and are taxable income to your business.

Mandatory Commercial Tenancy Code of Conduct:

  • This was announced by the Federal Government and is applicable to businesses with turnover of <$50M whom are eligible for JobKeeper.

  • There is a 50% rent waiver and a 50% rent deferral, proportional to the percentage decline in the revenue of the business of the tenant.

  • This only applies to commercial premises.

  • Leases need to be modified to incorporate the changes.

Land Tax Refund:

  • The NSW Government announced a land tax refund of up to 25% of your 2020 land tax liability, where commercial tenants with annual turnover of less than $50 mill have lost 30% or more or turnover.

  • It also applies to residential tenants who have lost 25% or more of household income due to COVID-19. Apply on line at Revenue NSW.

Payroll Tax Waiver:

  • The NSW Government announced a waiver of payroll tax for April, May and June 2020 and an increase in the PRT threshold to $1M from 1 July 2020.

The above is a brief summary. Please contact us if you require more detail on how these measures apply to your business.

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