Government announces fire aid as ATO pledges tax assistance

Approximately 3.5 million businesses, individuals and self-managed superannuation funds in impacted local government areas will now have until 28 May 2020 to lodge and pay business activity statements and income tax returns.

The Commissioner of Taxation Chris Jordan said he hoped the additional time – on top of the two-month extension already granted – would give people the breathing space they need to recover and start to rebuild.

“If you’ve been impacted by these bushfires, we don't want you to be concerned about your tax affairs. Now is the time for you, your family and your community. We'll help you sort out your tax affairs later,” he said.

Additionally, the Australian Taxation Office (ATO) is fast-tracking any refunds that are due to taxpayers in the impacted regions.

“If you run a business and you’re expecting a refund on – for example as a result of GST credits due to large purchases to replace stock – I encourage you to try to lodge or ask your tax professional to lodge your activity statements on your behalf. Refunds generated by lodging may provide some helpful temporary cash flow relief during these difficult times,” Mr Jordan said.

The ATO will also be remitting any interest and penalties applied to tax debts since the commencement of the bushfires that have been applied to accounts of individuals and businesses located in impacted regions.

For those taxpayers in affected areas with a tax debt or outstanding obligation, the ATO will not initiate debt recovery action until at least 28 May 2020. Taxpayers can also request payment arrangements for outstanding debts. The ATO will also consider releasing individuals and businesses from income tax and fringe benefits tax debts if they are experiencing serious hardship.

Affected taxpayers are also able to vary their income tax instalments to nil without penalties. This also applies if taxpayers end up in a tax payable situation for that quarter once they have lodged their tax return.

“It’s important to note that we recognise everyone’s situation is different. We understand there may be situations where additional support or extensions may be required beyond the automatic deferrals that we’ve announced. We’re standing by, ready to work with people who have been impacted on a case-by-case basis and I have made it clear to my staff that I expect them to be flexible, reasonable and pragmatic when considering each request on its merits,” said Mr Jordan.

Government announces aid

In a separate statement issued on Monday morning, the government said it is providing top-up grants to eligible small businesses and non-profit organisations of up to $50,000 (tax free), to build on the disaster recovery grants put in place by state governments. 

The government is also offering loans of up to $500,000 for businesses that have suffered significant asset loss or a significant loss of revenue. The loan would be for up to 10 years and used for the purposes of restoring or replacing damaged assets and for working capital.

The loans will be available with a repayment holiday of up to two years, with no interest accruing during this period. The subsequent interest rate would be set at 50 per cent of the 10-year Commonwealth government bond rate (currently around 0.6 per cent).

Additionally, the government will deliver $3.5 million to establish the Small Business Bushfire Financial Support Line as well as to fund 10 additional financial counsellors with the ability to provide advice to around 100 small businesses a day.