On 20 January 2020, the Australian Government announced a comprehensive support package to help small businesses that have been impacted by the bushfire crisis get back on their feet.
The package includes grants, concessional loans, and tax relief for businesses that have suffered direct fire damage or have been indirectly economically impacted by the bushfires.
The Minister for Finance and Small Business, Damien Tudehope, encouraged small businesses to apply for the funding, which will help bushfire-affected communities get up and running as soon as possible.
“Small enterprises are the lifeblood of their community and we want to do everything we can to support them during this time of recovery,” he said.
This assistance will be provided through a joint Disaster Recovery Funding Arrangement (DRFA) between State/Territory Governments and the Australian Government, featuring components designed to provide financial relief to business owners.
Eligible small businesses and non-profit organisations that have sustained damage to their premises, equipment or stock can access grants of up to $50,000 to help pay for repairs. This program will be uncapped, and grants will be tax-free.
Loans of up to $500,000 will be offered to businesses that have experienced significant asset loss or loss of revenue as a direct result of the bushfires. Loans will be provided to businesses interest-free for up to 10 years and will be available with a repayment holiday of up to two years. The interest rate will be set at 50% of the 10-year Commonwealth Government bond rate (currently around 0.6%).
Taxpayers in impacted postcodes will have until 28 May 2020 to lodge and pay business activity statements and income tax returns. Businesses that pay their Pay-As-You-Go installments quarterly will be allowed to claim zero dollars for the December 2019 quarter and receive a refund for any installments made in the September 2019 quarter.
Businesses that have already lodged their quarterly activity statements for 2019–20 can claim a credit on their next statement for the amount they paid in previous quarters.
Tax and superannuation audits
Businesses in identified impacted postcodes that are currently undergoing an audit will have their review temporarily suspended. If they wish to continue the process, a registered agent or audit officer can provide assistance.
Large tax withholders
Payment and lodgement deferrals for businesses in bushfire impacted postcodes don’t apply to large withholders. Large withholders are taxpayers who have previously withheld more than $1 million tax annually.
Super guarantee payments
Employers will still be required to meet superannuation obligations for their employees. The ATO does not have the power to vary the contribution date or waive the fee on late super guarantee payments.
Monthly GST credits
Businesses that need to replace stock and pay for other losses can change their GST reporting and payments to monthly, to get quicker access to net amount refunds. Changes can only occur at the start of a quarter, so a change now will take effect from 1 April 2020.
If you’re unsure about what type of assistance you’re entitled to, or how to proceed with a claim, talk to us. Billings + Ellis can give you advice tailored to suit your small business needs.