Help is available for those recovering from the terrible bushfires in Australia in what has been a tough summer for individuals, families, businesses, communities, volunteers and agencies.
ATO defers income tax and GST deadlines:
Dedicated home page with latest information : Bushfires 2019-20
Individuals and businesses recovering from the bushfires are relieved of their immediate tax deadlines. The ATO has automatically deferred the due dates for upcoming deadlines for BAS, income tax and FBT lodgments and associated payments until 28 May 2020.
There’s no need to seek this extension of time for taxpayers in affected areas in New South Wales, Victoria, South Australia, Tasmania and Queensland.
The ATO will also fast track tax refunds due to taxpayers in these areas and if they have an outstanding tax debt, the ATO will not initiate debt recovery action until at least 28 May 2020. Taxpayers can also request payment arrangements for outstanding debts, and the ATO will consider releasing individuals and businesses from income tax and FBT debts if they are experiencing serious hardship.
Check if your client is in an affected area by looking for their postcode listed on the ATO’s dedicated page. For taxpayers outside these areas, help is available by contacting the ATO Emergency Support Infoline at 1800 806 218. The ATO can assist by providing extra time to pay debts or lodge statements, find lost Tax File Numbers, reconstruct damaged tax records, fast track refunds, set up payment plans and remit penalties and interest.
Tax exemption for government payments and allowances
People affected by bushfires declared as disasters can apply for various payments including:
- Disaster Recovery Payment – one off tax-exempt payment
- Disaster Recovery Allowance – tax-exempt short-term income support
- NSW volunteer firefighters – tax-exempt payments of up to $300 per day, and up to a total of $6,000 per person for self-employed individuals or those employed by small/medium business if called out for more than 10 days during the fire season
- Payments that are normally taxable under the Disaster Recovery Funding Arrangements, including grants to small business and farmers, will also be exempt from tax.
Useful link: Department of Human Services bushfire support page has information on various financial support available for communities in affected states and territories, as well as mental health support.
State tax relief in NSW
Revenue NSW have announced a range of measures to assist people in bushfire affected areas in NSW, including:
- exemption from payroll tax for wages paid or payable to employees engaged in bushfire-fighting activities or emergency operations
- extension of time to pay or to lodge documents, returns or objections
- a hold on fines and debt
- waiver of interest
- instalment payment arrangements
- a refund of motor vehicle duty paid to replace a destroyed vehicle.
While most notices of assessment will issue in March, Revenue NSW has announced that the issue of land tax assessment notices in respect of land in bushfire-affected postcodes is delaying until 27 April 2020.
Land tax and Duty relief in Victoria
The Victorian State Government have announced that property destroyed or substantially damaged in the recent bushfires would not be included in land tax assessments for 2020. This concession may also apply to property which is affected but not destroyed or substantially damaged in the fires.
The State Revenue Office has suspended land tax assessments in affected areas.
Property used to provide free accommodation to bushfire-affected people can qualify for reduced land tax in 2021. The reduction is proportional to the period of use, with a full reduction in land value after the accommodation use exceeds 6 months.
For those whose homes were destroyed in the bushfires, stamp duty relief of up to $55,000 is available on purchase of a replacement home, including vacant land. This concession is available for 4 years. A 50% stamp duty concession applies to contracts of sale of commercial or industrial property in East Gippsland, Mansfield, Wellington, Wangaratta, Towong and Alpine.
Regional employers in those areas may also also qualify for a halving in the normal rate of payroll tax backdated to apply from 1 July 2019.
Where a motor vehicle is destroyed, a reduction of up to $2,100 in motor vehicle duty may be available on the purchase of a replacement motor vehicle. This applies for up to 2 vehicles per resident, although relief for residents losing more than two vehicles will be considered on a case by case basis. Motor vehicle relief is not available to companies and must be claimed before 1 April 2022.
Stamp duty relief in South Australia
The SA government will grant stamp duty relief for the purchase of replacement properties and motor vehicles. Relief of up to $48,830 is available for replacement homes and up to $1,940 for a passenger vehicle or $1,470 for a commercial vehicle.
Full land tax relief is given for 2019/20 and 2020/21 land tax liabilities for properties destroyed or substantially damaged. Properties affected but not destroyed or substantially damaged will receive relief on 2020/21 land tax liability on a case-by-case basis.
Revenue SA have issued a new revenue ruling SDALT001 Tax Relief Measures for those impacted by the Bushfire with guidance on how to apply for tax relief in bushfire affected areas.
Keep up to date on bushfire recovery
The government continues to announce commitments to additional support and funding for affected businesses and communities. Small business leaders have called for more tax relief besides delaying tax lodgments, including relief from GST payments and state payroll tax so the government may respond with further tax changes.
Latest media releases from the Prime Minister: https://www.pm.gov.au/media
Latest information on other help available to affected communities is available at the government’s DisasterAssist website –https://www.disasterassist.gov.au/
ASIC is providing support to companies affected by bushfires and facing financial hardship by allowing ASIC fees to be paid under a payment plan. Information available at: https://asic.gov.au/for-business/payments-fees-and-invoices/bushfire-relief/
Registered charities affected by the bushfires also have up to 31 March 2020 to lodge their 2019 Annual Information Statement with the ACNC.
Do your part: fundraising and donations
The National Bushfire Recovery Agency has published a list of charities with Deductible Gift Recipient (DGR) status that have established bushfire appeals, so donors can easily identify charities for which gifts of $2 and above will be tax deductible: https://pmc.gov.au/registered-bushfire-charities
Donors can also check if they are donating to a legitimate fundraising website or group by looking up the ACNC’s charity register. The ACCC has warned against scammers pretending to be legitimate charities, cold-calling people, or creating fake websites, social media pages or crowdfunding requests.
The ACNC has provide tips for fundraisers and charities, suggesting that organisations wishing to raise funds consider contributing to, or partnering with, existing charities with resources in affected areas or disaster expertise, rather than setting up a new charity: https://www.acnc.gov.au/media/news/updated-safe-fundraising-and-giving-response-drought-and-bushfire-disasters
Additional support from state and territory governments
Australian Capital Territory – Support to Canberrans https://www.communityservices.act.gov.au/wac/community/social_recovery
New South Wales – Community support
Victoria – Relief and recovery
Queensland – Recovery after a disaster
South Australia – Disaster recovery
Tasmania – Disaster assistance
Western Australia – Disaster recovery
Northern Territory – Recover from an emergency
Article correct as of 4 March, 2020. Government announcements and legislative changes that occur after this date will not be included in this article.