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.
SA specific changes – extension of the COVID-19 Emergency Response Act
- SA Government has confirmed that the JobKeeper extension payment will continue to be exempt from payroll tax.
- The payroll tax waiver for businesses with wages up to $4M (annualized grouped wages) will continue with businesses not be required to pay payroll tax for the months of April to December (return periods March 2020 – November 2020). There is no need to make an election to receive the waiver.
- Businesses and business groups with wages over $4M and who are adversely impacted by COVID-19 can elect to defer payroll tax payments. Businesses must elect to go into the deferral scheme – it’s not an automatic enrolment.
- There is land tax relief for landlords of commercial and non-commercial properties as well as commercial owner-occupiers for a “second period” from 31 October 2020 to 30 April 2021 (period 2).
- Relief is only available where land is occupied by tenants impacted by COVID-19 or is vacant due to the impact of COVID-19.
- For non-residential or owner-occupied landlords at least one tenant must be receiving the JobKeeper payment, the landlord must pass on rent relief to the tenant and that relief must be more than 25% of the land tax due for the relevant property.
- For residential landlords, a tenant must declare that they have been impacted by COVID-19 i.e. lost their job, and the landlord must have reduced their rent during the relevant period.
- Land tax relief may also be available where a property has remained vacant due to COVID-19.
- Period 2 must be assessed separately from the first period.
- The relief must be applied for via RevenueSA.
Commercial and residential leasing
- Legislation for retail and commercial leases affected by COVID-19 has been extended – broadly until 3 January 2021 and includes the following.
- There are restrictions on the increase of rent for an affected lessee.
- A lessor can’t take any prescribed actions against an affected lessee due a breach of the lease including failure to pay rent or outgoings or the business not be open the specified hours in the lease. Prescribed actions includes eviction, exercising the right of re-entry or termination of the lease amongst other matters.
- There is an obligation on both parties to negotiate leases in good faith.
- Parties can request mediation with the Office of the Small Business Commissioner if agreement cannot be reached.
Insolvency changes – Federal government changes
- The temporary insolvency measures that were effective from 25 March 2020 to the end of September have now been extended to 31 December 2020.
- The changes include temporary relief for insolvent trading and a temporary increase in the threshold at which creditors can issue a statutory demand from $2,000 to $20,000.
If you have any questions in relation to the above, please contact your Holman Hodge adviser.