Coronavirus: State Government Tax Relief for SMEs
The New South Wales, Queensland and Western Australian State Governments have recently introduced a limited range of tax relief measures. The packages are intended to assist small-to-medium-sized businesses during the current period of economic downturn as a result of the Coronavirus COVID-19. The effect of the packages are to enhance the measures recently announced by the Federal Government.
New South Wales
On 17 March 2020, the NSW government announced three tax-related measures to assist small to medium sizes businesses:
Three-month payroll tax waiver
Businesses with payrolls of up to AUD 10 million will have their payroll tax liability waived for the three months April-June 2020.
Payroll tax threshold increase to be brought forward
The NSW payroll tax threshold will be increased to $1 million in the 2020-2021 financial year, 12 months sooner than had previously been scheduled. The threshold is currently $900,000 and had previously been scheduled to increase to $950,000 from 1 July 2020, and then to AUD 1 million from 1 July 2021.
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 tradespeople.
Queensland
Payroll Tax Deferral
On 17 March 2020, the Queensland government announced that it had extended its Coronavirus Payroll Tax Deferral Offer to Queensland businesses of all sizes. When originally announced, the measure was only available to small and medium businesses. Under this measure, the due dates for businesses to lodge payroll tax returns for the remainder 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 lodgement and payment;
- Lodge returns as usual but defer payment;
- Lodge returns and pay as normal; and
- Defer for a time, but then resume lodgement and payment as usual.
The Queensland Office of State Revenue will also work with affected businesses to establish repayment plans for deferred payroll tax liabilities.
Western Australia
On 16 March 2020, the WA government announced three payroll tax-related measures aimed at supporting small and medium businesses to manage the impacts of COVID-19.
Payroll tax threshold increase to be brought forward
The WA payroll tax threshold will be increased to $1 million on 1 July 2020, six months earlier than previously scheduled. The WA government estimates that the change will remove payroll tax liabilities for approximately 300 businesses. A further 11,000 businesses will pay less payroll tax.
The payroll tax threshold is currently $950,000, having been increased to that level on 1 January this year.
Payroll tax deferral
Small and medium businesses that have been directly or indirectly affected by COVID-19, when 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 Australian yearly 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 AUD 1 million and AUD 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.
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Federal Government Assistance Announcement
Sources:
- NSW Government
- Queensland Government
- Western Australia Government
- Deloitte Australia
