Category Archives: Economos blog

Covid19 NSW Business Relief Summary

Introduction

If your NSW business has been impacted by the Covid-19 “Delta outbreak” and the NSW public health stay-at-home orders (commencing June 2021) there are a range of measures to support you during this lockdown.

The measure available are for:

–  ABN Businesses (or Not for Profits),

–  In NSW,

–  With annualised turnover above at least $30,000 (at 30/6/20), and wages less than $10M,

–  Where the 2020 tax return is complete,

–  And the business has suffered a downturn of at least 30%.

2021 COVID Business Grant

–  One off Grant

–  Available for businesses suffering downturn of

–  30% (receive $7,500)

–  50% ($10,500)

–  70% ($15,000)

–  Comparing the 2-week period 26/6/21 – 17/7/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Business had income between $75K to $50M for FY2020

–  Applications close 13 September 2021

–  Link: https://www.service.nsw.gov.au/transaction/2021-covid-19-business-grant

2021 COVID Jobsaver

–  For businesses with turnover $75K – $250M p.a at 30/6/2020

–  Fortnightly payments (receive min $1,500 per week, MAX $100K p.w)

–  Equivalent to 40% of weekly payroll

–  Available for business suffering downturn of at least 30%

–  By comparing any 2-week period after 26/6/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Business must maintain employee ‘head count’

–  Sole traders eligible for $1,000 p.w

–  Applications close 18 October 2021

–  Link: https://www.service.nsw.gov.au/transaction/jobsaver-payment

2021 COVID Micro business Grant

–  For businesses with turnover $30K – $75K p.a at 30/6/2020

–   Receive $1,500 per fortnight

–  Paid fortnightly

–  Available for business suffering downturn of at least 30%

–  Comparing any 2 week period after 26/6/21 against the same period in 2019, 2020 or the 2 weeks prior.

–  Cannot apply for NSW Covid Business or Covid Jobsaver

–  The business must be the owner’s primary income source

–  Link: https://www.service.nsw.gov.au/transaction/2021-covid-19-micro-business-grant

Revenue NSW Payroll Tax Relief

DEFERRAL

–  Ability to defer payments due on 2020-21 Annual reconciliation

–  Interest free

–  Any business paying payroll tax is eligible for deferral

WAIVER

–  Any NSW business with 30% decline in turnover is eligible for a 50% waiver in payroll tax bill

–  Eligible for businesses with wages up to $10M

Revenue NSW Land Tax Relief

–  Land Tax waivers for landowners who can demonstrate they provided Rent relief for tenants in distress;

–  Up to 100% of the Land Tax bill

–  Available until 31 December 2021

Commercial Landlord Hardship Fund

–  Administered by Service NSW

–  Provide grants of up to $3,000 per month to small commercial or retail landowners who suffer hardship due to the changed leasing arrangement with tenants who are financially impacted by COVID-19 in 2021, and have not claimed any land tax relief for rent reductions provided between 1 July 2021 and 31 December 2021

–  Available per eligible property

–  The fund is limited (once the funds are disbursed – the scheme is over)

–  Link : https://www.service.nsw.gov.au/commercial-landlord-hardship-fund-guidelines

Six Member SMSFs allowed from 1 July 2021

It has been a few years since the proposal to increase the number of members in a self-managed super fund (SMSF) from four to six was put forward by then Treasurer Scott Morrison.

On 22 June 2021, the legislation for this proposal received Royal Assent.

SMSFs are permitted to have up to six members from 1 July 2021.

There is a lot to consider when adding members to a SMSF and may not suit everyone.

Key Considerations:

  • More members can pool their balances to purchase larger or higher value assets such as property.
  • It could increase the ability to make contributions which in turn could increase cashflow.
  • Allows families to include more family members. It would allow Mum & Dad to include up to four children under the same SMSF.
  • Increased complications when there are disputes, in particular family law disputes
  • Increased risk of control imbalance if voting is based on weighted balances.
  • All trustees/directors are responsible for decisions made, even if they are not directly involved. Succession planning and future control will need to be carefully considered to help manage the risk of loss of capacity and death
  • Most States and Territorities, include New South Wales only permit up to four individual trustees. Accordingly, the SMSF will need to have a corporate trustee where all members would be directors in order to have up to six SMSF members.
  • Some trust deeds specify the four member limit and would need to be varied before increasing the number of members.

NSW Payroll Tax Rate Reduction

The NSW Government has announced a reduction in the payroll tax rate to 4.85 per cent for the 2020/21 and 2021/22 financial years.

The threshold has also increased to $1,200,000 for the 2020/21 and subsequent financial years.

These changes apply retrospectively from 1 July 2020.

Tax yearThresholdTax rate
01/07/2020 to 30/06/2021$1,200,0004.85%
01/07/2019 to 30/06/2020$900,0005.45%
01/07/2018 to 30/06/2019$850,0005.45%

About a Payroll Tax

If you’re an employer who pays wages in NSW, you must register for payroll tax if your total Australian wages exceed the relevant monthly threshold.

Days in the monthThreshold
28$92,055
30$98,630
31$101,918

What are ”Wages”?

Wages and other payments to employees engaged on a permanent, temporary or casual basis are subject to payroll tax.

  • Wages
  • Allowances
  • Bonus / Commissions
  • Director Fees
  • Fringe Benefits
  • Superannuation
  • Salary Sacrifice
  • Termination payments
  • Third party payments
  • Salary Sacrifice

If you would like a review of your “Wages” to staff and contractors in light of Payroll Tax please contact us for a quote.

JobMaker Hiring Credit

On 6 October 2020 as part of the 2020–21 Budget, the government announced a new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit. The JobMaker Hiring Credit will be administered by the ATO.

The measure is subject to the passing of legislation.

How does it work?

Eligible employers will have access to a JobMaker Hiring Credit for each new job they create over the 12 months from 7 October 2020, for which they hire an eligible employee, for a maximum claim period of 12 months from their employment start date.

Employers will register with the ATO and make claims quarterly, with claims commencing in February 2021.

How much is available?

The JobMaker Hiring Credit will be:

  • $200 per week for each eligible employee aged 16 to 29
  • $100 per week for each eligible employee aged 30 to 35.

An employer cannot claim JobKeeper and JobMaker Hiring Credit at the same time.

Eligibility – Employers
To be eligible, employers must:

  • hold an Australian Business number (ABN)
  • be up-to-date with their tax lodgement obligations
  • be registered for Pay As You Go (PAYG) withholding
  • be reporting through Single touch payroll (STP).

Eligibility – Employees
Eligible employees must have worked an average of at least 20 hours per week over the quarter for the employer to qualify for the payment. Employees that start and/or stop employment during a quarter must meet a similar test based on the length of time in employment.
For the employer to be eligible, new employees must:

  • be aged 16 to 35 years
  • be in receipt of income support payments (such as JobSeeker Payment, Youth Allowance (Other), or Parenting Payment) for at least one of the three months before they were hired.

Further information can be found here: https://www.ato.gov.au/General/New-legislation/The-Australian-Government-s-Economic-Response-to-Coronavirus/