Small Business Grants Set to Become Income Tax-Free
In a bid to get Australian business back on track, the Government is now taking steps to action an SME budget promise to ensure COVID-related small business grants are made tax-free.
Treasurer Josh Frydenberg announced on budget release night, that Victorian business support grants would be made non-assessable, non-exempt income for tax purposes.
This would also be extended to apply to states and territories on an application basis. Restrictions would be placed to grants announced on or after 13 September 2020 and eligible payments must be made between 13 September 2020 and 30 June 2021.
The proposed Treasury Laws Amendment (2020 Measures No. 5) Bill 2020 clarifies that only entities with an aggregated turnover of less than $50 million will be eligible for concessional tax treatment.
Although not yet passed at time of writing, the payment must be made under a grant program declared eligible, and must be in response to the economic impacts of COVID-19.
The program must also be directed at supporting businesses subject to restrictions regarding their operations such as being subject to a public health directive that applies to the location in which they operate.
These measures will ensure only payments in direct concern with the impacts of COVID-19 will be available for concessional tax treatment.
With eligible grants to become tax-free, the proposed bill will further assist business by providing an additional boost to cash flow and add to the measures helping Australia recover.
Need some help?
Accounting professionals and business advisors are trained to understand how you and your business many benefit from the Government measures being released.
If you have questions on eligibility or other packages on offer, contact our team today for an obligation free consultation.
Do you know how the Federal Budget announcements will affect you?
Now that the Federal Budget 2020 has been announced, you may be asking yourself, how will these changes affect me?
We’ve put together all of Budget information in one place, and included our live webinar recording where our experts discuss the key changes and possible implications and opportunities for you post-announcement.
IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.