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November 16, 2020

Small Business Grants Set to Become Income Tax-Free

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Peter Hetherington
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.

WATCH NOW

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