Eligible NSW businesses (including sole traders and not-for-profit organisations) with Australian wages below $10 million can claim grants between $7,500 and $15,000 as a result of the COVID-19 restrictions.

Three different grant amounts will be available depending on the decline in turnover experienced during the restrictions, being:

• $7,500 for a decline of 30% or more;
• $10,500 for a decline of 50% or more; or
• $15,000 for a decline of 70% or more.

Eligible NSW businesses with an annual turnover of between $75,000 and $50 million that can demonstrate a 30% reduction in turnover (compared to an equivalent two-week period in 2019) will be entitled to business support payments from week four of the lockdown.

Eligible entities will receive 40% of their NSW payroll payments, at a minimum of $1,500 and a maximum of $10,000 per week.

Assistance will cease when the current lockdown restrictions are eased, or when the Commonwealth hotspot declaration is removed.

To receive the payment, entities will be required to maintain their full time, part time and long-term casual staffing level as of 13 July 2021.

For non-employing businesses (ie. eligible sole traders) the payment will be set at $1,000 per week.

Eligible 'micro businesses' (including sole traders) with a turnover of between $30,000 and $75,000 that have experienced a decline in turnover of at least 30% will be eligible for payments of $1,500 per fortnight of restrictions from late July 2021.

NSW payroll tax concessions include

• Payroll tax waivers of 25% for businesses with grouped Australian wages of between $1.2 million and $10 million that have experienced a 30% decline in turnover.
• Payment deferrals and interest-free repayments.

NSW Land tax relief concessions include:

• Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially-distressed tenants is available for up to 100% of the 2021 NSW land tax year liability.
• A capped grant up to $1,500 for residential landlords who are not liable to pay land tax who reduce rent for tenants.

The NSW Government will introduce a short-term eviction moratorium for rental arrears where a residential tenant suffers loss of income of 25% due to COVID-19 and meets other eligibility criteria.

In addition, it will restrict recovery of security bonds, lockouts or evictions of impacted retail and commercial tenants prior to mediation.

Other targeted industry support measures include:

• The deferral of gaming tax assessments for clubs until 21 December 2021 and hotels until 21 January 2021.
• A $75 million support package for the performing arts sector (administered by Create NSW).
• A $26 million package for the accommodation sector. 

The COVID-19 Disaster Payment was originally introduced in response to the previous two-week Victorian lockdown (and was made applicable to all future Commonwealth-declared COVID-19 hotspots).

The payment is not applicable for the first seven days of an eligible lockdown (ie. it is payable to eligible recipients from the second week) and now, in response to the current NSW lockdown, the Federal Government has extended this support for individuals who have lost work (and pay) as a result of the COVID-19 lockdowns.

Specifically, from week four of the lockdown, the COVID-19 Disaster Payment will increase:

• from $500 to $600 each week if a person has lost 20 hours or more of work a week; or
• from $325 to $375 each week if a person has lost between 8 and 20 hours of work (or a full day of their usual work hours per week).

This will be a recurring payment for approved recipients for as long as the Commonwealth-declared hotspot and lockdown restrictions remain in place.

Furthermore, from 18 July 2021, this payment will be available to eligible NSW residents outside Commonwealth-declared hotspots (which will be funded directly by the NSW Government).

Businesses can register their interest in the key business support measures that are administered by Service NSW – click here.

Tax treatment of different COVID-19 support payments

Now that 30 June 2021 has passed and many taxpayers are preparing their tax records to complete their 2021 income tax returns, it is important to be aware of the different tax treatments of the various COVID-19 support payments. Here is a quick summary:

JobKeeper

• JobKeeper payments received as an employee will be included in the employee's income statement as either salary and wages or as an allowance, and the ATO will automatically include this information on their online tax return.
• Income statements can be accessed in ATO online services through the individual's myGov account and should be finalised by 14 July (tax agents also have access to this information).
• Sole traders who have received JobKeeper payments on behalf of their business will need to include the payments as assessable income for the business.

JobSeeker

• JobSeeker payments will also be included in a recipient's tax return at the Government Payments and Allowances question once it is ready. However, if an individual lodges their tax return before this information is input, they will need to add it themselves.

Stand down payments

One-off or regular payments received from an employer after being temporarily stood down due to COVID-19 are taxable and should appear in the income statement and will be automatically included in the stood-down employee's return.

COVID-19 disaster payment for people affected by restrictions

• The Australian Government (through Services Australia) COVID-19 disaster payment for people affected by restrictions is taxable and must be included as income in the return.

Tax treatment of other assistance

• The tax treatment of assistance payments can vary; the ATO website outlines how a range of disaster payments impact tax returns – click here.
• The ATO website also includes guidance on COVID payments, including the taxable pandemic leave disaster payment – click here.

Early access to superannuation

• If an individual accessed their super early under the special arrangements due to COVID-19, they do not need to declare this in their tax return, as any eligible amounts withdrawn under that program are tax-free.

Lost, damaged or destroyed tax records

The ATO knows that many taxpayers are facing lasting impacts left in the wake of natural disasters, so if they find their records have been lost or destroyed, whether in cyclones, floods or bushfires, the ATO can provide special assistance.

 According to ATO Assistant Commissioner Tim Loh:

"If you have a myGov account linked to the ATO, you'll be able to view some of your records, including income tax returns, income statements and previous notices of assessments. If you lodge through a registered tax agent, they can also access these documents on your behalf."

Government agencies, private health funds, financial institutions and businesses provide information to the ATO which is available to tax agents and automatically included in returns by the end of July.

If taxpayers have lost receipts due to a natural disaster, the ATO can accept reasonable claims without evidence, provided it is not reasonably possible to access the original documents (although the taxpayer may be required to explain to the ATO how they calculated their claim).

Super guarantee contribution due date for June 2021 quarter

The due date for employers to make super guarantee contributions for their employees for the June 2021 quarter is 28 July 2021.

We note that the super guarantee rate in relation to salary and wages paid on or before 30 June 2021 is 9.5%, but the new super guarantee rate is 10% in relation to salary and wages paid from 1 July 2021 (even if they are paid in relation to work performed before that date).

Contributions made (and received by the fund) after 30 June 2021 will not be deductible in the 2021 income year, even if they are made in relation to work performed during the 2021 income year.

Extension of time to make repayments on Division 7A loans

Under a complying Division 7A loan from a private company, the borrower must make minimum yearly repayments (MYR) before the end of the lender's income year to avoid the loan being treated as an assessable dividend.

MYR for the year ended 30 June 2021

To offer more support due to the ongoing effects of COVID-19, an extension of the repayment period is now available for those who were unable to make their MYRs by the end of the lender's 2020-21 income year (generally 30 June).

 The borrower can apply for this administrative relief using the ATO's streamlined online application. Note that they must still make up the shortfall of their 2020-21 MYR by 30 June 2022.

MYR from the year ended 30 June 2020

A similar extension was also available for the MYR for the 2019-20 year, and borrowers who obtained this extension needed to have made up that shortfall by 30 June 2021.

If they did not meet this deadline, they will need to either obtain a further extension of time for the 2019/20 MYR from the ATO outside of this streamlined process or amend their 2019-20 tax return to include a dividend.

Rent or lease payment changes due to COVID-19

The ATO has provided updates regarding the tax implications when a landlord gives, or a tenant receives, rent concessions (such as waivers or deferrals of rent) as a result of COVID-19.

Rent waivers relating to "past periods of occupancy"

For example, for tenants that have received a rent waiver, if it relates to a past period of occupancy that the tenant has already incurred and claimed a deduction for, they are still entitled to that deduction.

However:

• if they have already paid the incurred rent and it has been waived and refunded to the tenant, they will need to include this amount in their assessable income when they receive it; or
• if they have not already paid the incurred rent and it has been waived, the amount of the rent waived will be a debt forgiveness. When such a debt is forgiven, the tenant will make a gain. The amount is not usually included in the business's assessable income, instead it is offset against amounts that could otherwise reduce the business's taxable income.

Rent waivers relating to "a future period of occupancy"

If the waived rent is related to a future period of occupancy, they will not be entitled to a deduction for that amount.

We note that these types of rent concessions can give rise to some complicated tax treatment (including GST implications) and the ATO has recently updated their guidance for both Landlords (click here) and Tenants (click here). If you require any special assistance in this regard, please contact your Lowe Lippmann contact.

New ATO data-matching programs

The ATO has advised that it will engage in two new data matching programs, as outlined below:

• the ATO will acquire novated lease data from McMillan Shakespeare Group, Smartgroup Corporation, SG Fleet Group, Eclipx Group, LeasePlan, Toyota Fleet Management, LeasePLUS and Orix Australia for the 2018-19 through to 2022-23 financial years (relating to approximately 260,000 individuals each financial year); and
• the ATO will acquire account identification and transaction data from cryptocurrency designated service providers for the 2021 financial year through to the 2023 financial year inclusively (relating to approximately 400,000 to 600,000 individuals each financial year).

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.