Due to the severity of the recent outbreak of the Covid-19 Delta variant, the Commonwealth and NSW Governments have seen the need to significantly expand their support for businesses suffering through the lockdown. This article addresses the new measures and the expansions to the existing measures announced two weeks ago.
While the public information is limited, Mazars understands that there are now at least eight general support schemes in place and we outline the measures below:
2021 COVID-19 Business Grant
Mazars understands that the Small Business and Hospitality and Tourism COVID-19 Support Grants have been merged and now apply to all affected NSW businesses, including those in Hospitality and Tourism, that:
- have an ABN registered in NSW or can demonstrate they are physically located and primarily operating in NSW;
- have annual turnover of more than $75,000 for the year ended 30 June 2020, and;
- have annual Australian wages up to $10 million.
Businesses that qualify for the support grants can receive:
- $15,000 for a decline in turnover of 70%, or more;
- $10,500 for a decline in turnover of 50%, or more;
- $7,500 for a decline in turnover of 30%, or more.
The grant can be used for business expenses for which no other government support is available.
What will be the most widely evaluated measure will be a $2 billon scheme (which Services NSW refers to as “Saving Jobs”) to provide cash flow support to businesses to help them retain staff. The scheme will be delivered jointly by the Commonwealth and NSW Governments.
Eligible entities (including not for profits) will receive 40% of their NSW payroll payments, at a minimum of $1,500 and a maximum of $10,000 per week. To qualify, the entity:
- must have had a decline in turnover of at least 30% compared with an equivalent two week period in 2019;
- will have an annual turnover between $75,000 and $50 million; and
- is required to maintain their full time, part time and long term casual staffing level as of 13 July 2021.
For non-employing businesses, such as sole traders, the payment will be set at $1,000 per week.
The payments will cover the period from the week commencing 18 July 2021 until the current lockdown restrictions are eased or when the Commonwealth hotspot declaration is removed.
Micro Business Grant
Grants will be available for micro businesses with an annual turnover of between $30,000 and $75,000 which experience a decline in turnover of 30%. The businesses will be eligible for a $1,500 payment per fortnight of restrictions.
Payroll Tax Waivers
Waivers of 25% of the NSW 2021-22 payroll tax liability will be available for businesses with grouped Australian wages of between $1.2 million and $10 million that have experienced a 30% decline in turnover. This measure will be similar to the one that applied in March to June 2020.
Employers can enter a 2021 Stimulus Payment Arrangement whereby payroll tax payments due in the 2020-21 annual return and the July and August liabilities can be deferred until 7 October 2021. Interest free repayment plans will also be available and details of these arrangements will be provided by the end of August 2021.
Land Tax Relief
A fourth program of land tax relief is available for the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants during the period 1 July to 31 December 2021. Up to 100% of the 2021 land tax year liability can be refunded. However, it is uncertain how this fourth program will apply to qualifying landlords who have already claimed 25% of the 2021 land tax liability under the third program of land tax relief covering rent reductions until 31 March 2021.
Where residential landlords, who do not pay land tax, have reduced rent for tenants in financial distress they will be entitled to a capped grant of up to $1,500.
Various Sectors – Clubs/Hotels, Performing Arts and Accommodation
Clubs and Hotels will have their gaming tax assessments deferred until at least 21 December 2021. A $75 million support package will be distributed to the performing arts sector. Similarly, a $26 million support package will be distributed to the accommodation sector.
Dine & Discover NSW
The Dine & Discover NSW program has been extended to 31 August 2021 to give people across NSW the time to use their Dine & Discover NSW Vouchers and support local businesses once restrictions ease.
Small Business Fees and Charges Rebate
A rebate of up to $1,500 is still available for small businesses that have total Australian wages below $1.2 million. The rebate covers all NSW Government charges and fees including local council rates and charges related to the cost of doing business (but not taxes).
Income Tax Exemption
Importantly, the Commonwealth has advised that all NSW small business grants, including the new small business payments, will be income tax exempt.
What do you need to do?
The Services NSW website enables you to register for notification when the financial support programs are available. The website indicates that businesses will be able to apply for the support from 19 July 2021. As these programs are evolving, with full eligibility criteria to be confirmed, we encourage you to register for notifications as soon as possible.
In order to apply for support from 19 July 2021, we also suggest that you commence accessing the following information for your business:
- full time, part time and casual staff levels and weekly hours as at 13 July 2021
- weekly turnovers in June-July 2019 and weekly turnovers since the 2021 lockdown commenced, and
- annual turnover and annual wages levels.
Should you have any questions, please contact your usual Mazars advisor, the author, or if you require assistance with claims or want to know more, please contact your local office below.
Author: Stephen Baxter
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