Business News
Bushfire Tax Assistance legislation becomes law
The government has passed legislation* to make disaster relief payments being made to individuals and businesses impacted by the devastating bushfires effectively tax exempt.
(*) The Treasury Laws Amendment (2019-20 Bushfire Tax Assistance) Act 2020
The exemption extends to payments such as:
- Disaster Recovery Allowance payments made to individuals; and
- Payments that would otherwise be taxable under the Disaster Recovery Funding Arrangements, such as grants that may be made to small businesses and primary producers.
The legislation also allows taxpayers to claim income tax deductions for donations to two organisations established by the Business Council of Australia in response to the bushfires (the Australian Volunteers Support Trust and the Community Rebuilding Trust).
The legislation also gives effect to the Prime Minister’s announcement on 29 December 2019 that the government would, in cooperation with the NSW government, provide tax-free financial support to volunteers in the NSW Rural Fire Service who are employed by small or medium businesses and had volunteered for an extended period to assist in combatting the bushfires (these arrangements have now been extended to other impacted States and Territories)
Further information on the support being provided can be found on the ATO website.
Ref: Treasurer’s media release, 6 February 2020
Further small business support for bushfire affected communities
The government has announced a comprehensive suite of measures to immediately support impacted small businesses and make it easier for those who have suffered direct fire damage, or have been indirectly economically impacted following the bushfires, to get back on their feet.
The immediate priorities for small businesses include:
- Grant funding- businesses and organisations that have sustained damage as a result of the fires can access up to $50, 000 in grant funding (tax free, as discussed above);
- Concessional loans to ensure small businesses have cash flow to run their operations- to provide maximum flexibility for eligible businesses, concessional loans of up to $ 500, 000 for up to 10 years will be offered for businesses that have suffered significant asset loss or a significant loss of revenue, and can be used for the purposes of restoring or replacing damaged assets and for working capital;
- Tax relief- the Commissioner of Taxation has agreed to provide a range of assistance measures to businesses in identified bushfire impacted postcodes to help to alleviate cash flow pressures and assist these businesses with their recovery efforts, including deferred lodgement dates (as reported in last month’s edition of voice);
- A dedicated and single contact point to help them access the support that is available (the Small Business Bushfire Financial Support Line) and provide financial counselling services that are targeted to help small and family business owners deal with the emotional and financial challenges they face.
The Registered Agent Natural Disaster Infoline is 1800 700 724, and the general Emergency Support Infoline is 1800 806 218.
The Federal Government will also work with local and state governments, business groups and other community organisations to develop Local Economic Recovery Plans.
Ref: Prime Minister’s Media Release, 20 January 2020
Editor: Note that we have an ATO Deputy Commissioner on this month’s edition of ‘Tax on the Couch’, speaking about the ATO’s response to the bushfires.
