COVID-19 – Extensions of business relief

Since the Australian economy was hit by the impact of Covid-19 in March, relief for businesses has been provided in many different forms, not just the JobKeeper program.

This relief included specific state based measures in the way of payroll tax waivers and deferrals, land tax relief and cash grants (now closed).  The Federal government also announced other relief measures including temporary changes to insolvency laws and the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles During COVID-19.

The timing and expiration of many of these measures were linked to the timing of the JobKeeper program.  Once JobKeeper was extended, many of these relief measures were also extended but not in a uniform way.

See below for further detail.

 

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Federal budget 2021

The message was clear from the Federal Government. They want taxpayers to spend and they want that spending to create jobs.  Underlying that, they are hoping the tax cuts, business investment breaks and cash payments will create the confidence required to bring the spending.

There were a number of measures announced in the Federal Budget – following is a summary of the measures that will impact individuals and businesses.

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Detailed budget analysis

The Government handed down the Federal Budget last night which was all about jobs and getting the economy moving again. The key tax related measures are outlined below.

 

Clarifying the corporate residency test

 

The Government will make technical amendments to clarify the corporate residency test. The Government will amend the law to provide that a company that is incorporated offshore will be treated as an Australian tax resident if it has a ‘significant economic connection to Australia’. This test will be satisfied where both the company’s core commercial activities are undertaken in Australia and its central management and control is in Australia. The measure will have effect from the first income year after the date of Royal Assent of the enabling legislation.

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What’s next with JobKeeper 2.0?

If you are currently receiving JobKeeper, you would be aware that the program was due to finish on 27 September 2020 after running for six months.  We now know that the program is being extended to 28 March 2021. However, there will be new eligibility requirements.  The rules governing JobKeeper 2.0 were recently released by the Treasurer and further guidance from the ATO has also been released, with more detail to come.

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JobKeeper Amending Rules Released

On Friday afternoon, the Government released amendments to the JobKeeper rules.  These amendments clarify and confirm some aspects of the announcements made on Friday 7 August.

Change in employment date

The amendments confirm that employers who are currently eligible for the JobKeeper scheme, need to consider the eligible of employees who were employed as at 1 July 2020.  There are a number of reasons employees may now be eligible including:

  • Casuals who didn’t satisfy the definition of “long term casual” as at 1 March 2020
  • Having reached the appropriate age by 1 July 2020
  • May now hold the appropriate visa as at 1 July 2020

New permanent employees, employed after 1 March 2020 may also now be eligible.

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