Victorian small business grants now income tax-free
Recently, the federal and Victorian governments have come to an agreement to make the grants to both small and medium businesses. The grants would be made under Victoria’s Business Resilience Package, and they have been exempted from income tax. Earlier this month, a $3 billion grant package was announced, and it provides grants up to $20,000 to businesses featuring payroll up to $10 million. Licensed hospitality businesses can access grants of up to $30,000, while alpine businesses are set to receive $20,000 to help them cover their ski resort fees. The government will support payments to businesses that are typically accessible to the new agreement between Victoria and Commonwealth as it recognizes the unique circumstances Victorian businesses face. The government will wait to work under the state’s reopening roadmap.
The tax exemption will be restricted for a time period until June 30, 2021. The tax relief is eligible for Victorian businesses and landlords.
- Payroll tax relief- The payroll tax waived for the 2019-20 financial year is eligible for businesses with annual taxable wages up to $3 million. Additionally, they can also defer paying payroll tax in the first quarter of the financial year 2020-21. Payments made to bridge the gap between an employee’s wage and a fortnight is also exempted.
- Liquor license tax relief- People can get a reimbursement of liquor license fees that have been paid in 2020. The liquor license fees will be waived in 2021 also.
- Land tax relief- Landlords who are due to pay land tax 2020 and own at least one non- residential property and total taxable holdings less than $1 million are exempted from paying their 2020 land tax assessment until March 31, 2021. Also, total residential and tax liabilities will be exempted.
- Commercial passenger vehicle service levy relief- From April 1 2020 to June 30, 2020 quarter, a waiver of commercial passenger vehicles is granted. An agreement must be signed between larger booking service providers and the Department of Transport as they need to agree on terms like fully returning the levy to drivers before they can access the relief. The businesses will be contacted directly by the transport department.
Who is eligible for the grant?
If a business wants to apply for the grant, then they must fulfill the following criteria:
- Operate the business located within Victoria.
- The business must participate in the Commonwealth Government’s Jobkeeper scheme.
- On June 30, 2020, the company must be registered with WorkSafe and have an annual payroll of less than $3 million in 2019-20. Also, they need to be registered for goods and service tax and hold an Australian Business Number.
Key dates to apply for the program:
The program has been open for applications since July 13, 2020, and was due to be shut on July 19, 2020. But the best part is that the program has been extended to September 14, 2020.
How can funding be used?
The grant can be used for meeting business costs like rent and utilities. One can seek financial or legal advice to support the continuity of business. Develop business through marketing and communication facilities.
Why has the Victorian government launched this fund?
The Victorian government has launched a $500 billion grant to support small businesses in the sectors that have been worst hit by the covid19 pandemic so these businesses can survive and people can continue to work. The fund is ideally, the part of the Victorian’s government Economic Survival package which aims to support both business and workers through the harsh effects of the pandemic. The fund is mainly targeted towards a small business that isn’t eligible for refunds.
As per prime minister Scott Morrisson, the agreement is in recognition of the “exceptional circumstances Victorian businesses face. Additionally, he stated that on an application basis, the federal government would extend the arrangement to all other states and territories. Still, it would be limited to only future grant program announcements, including small and medium businesses facing the same circumstances as per Victorian companies. As per the latest news, Victorian Premier Daniel Andrews, the state will reopen the roadmap, all it means is that there is a scheduled major step to reopen from October 26, and within a week, it will be moved forward. Lastly, the effort to reach Covid-19 normal will no longer be marked on a calendar, but it will require zero new cases in the community for 14 days or more.