As the South Australian Government attempts to lift the State out of recession, this year’s budget extended the unprecedented COVID-19 stimulus measures.
Three key aspects of the budget’s COVID-19 stimulus measures that will be of particular note to our clients relate to:
- Payroll Tax;
- Business grants; and
- Land Tax
- Other stimulus measures
For more information on all of these stimulus initiatives:
1. Payroll Tax
Employers with grouped Australian wages up to $4 million for 2018-19
All businesses with $4M (or less) of grouped Australian taxable wages will have their 6 month payroll tax liabilities from April to September 2020 waived.
There is no application process. RevenueSA will notify eligible businesses via RevenueSA Online. Returns are still required to be lodged during this period. The waiver of payroll tax for the above period will be finalised via the annual reconciliations for 2019-20 and 2020-21.
Employers with grouped Australian wages above $4 million for 2018-19
Busineses that can demonstrate (on application) that their cash flow has been significantly impacted by the coronavirus can elect to defer their payroll tax payments for the March to November 2020 returns periods until 14 January 2021.
An online application is being developed and these businesses must continue to lodge returns.
This relief is an extension to the COVID-19 payroll tax relief measures previously announced.
If employees qualify for the Federal Government’s JobKeeper support payments between 4 January 2021 and 28 March 2021 employers in SA will also receive a waiver of the payroll tax payable on all their declared paid wages for the months of January to June 2021 (for the return periods of December 2020 to May 2021). RevenueSA has the following statement on their website:
“Under existing payroll tax legislation, the JobKeeper payment – part of the Commonwealth’s $130 billion stimulus measure to keep eligible businesses connected with their workforce during the coronavirus crisis – would attract payroll tax.
The COVID-19 Emergency Response Bill 2020 (SA), which was assented to on 9 April 2020, includes an amendment to the Payroll Tax Act 2009 to ensure South Australian businesses whose employees qualify for the Federal Government’s $1 500-a-fortnight JobKeeper support payments will be exempt from paying any payroll tax on the wage subsidy.”
For employers who have deferred their payroll tax liabilities due to COVID-19, extended repayment instalment arrangement options will be made available. More details on this to come.
Apprentices and Trainees
Relief will be provided equivalent to a 12 month payroll tax exemption for wages paid to eligible new apprentices and trainees who commence a relevant contract of training with an employer in the period 10 November 2020 to 30 June 2021.
Ex gratia relief based on the payroll tax payable on the wages of the eligible apprentice or trainee will be provided for 12 months from the date of commencement of the relevant contract of training.
Small Business Grants
- $10,000 for small business that employ staff and are receiving JobKeeper from 28 September 2020;
- $3,000 for small business that do not employ staff, are operating from a commercial premises, and are receiving JobKeeper from 28 September 2020.
Applications close Midnight, 14 December 2020.
The HomeBuilder Grant of $25,000 is available to eligible owner-occupiers (including first home buyers) who build a new home, substantially renovate an existing home, or buy an off the plan/new home, where the contract is signed between 4 June 2020 and 31 December 2020 inclusive.
Land Tax Deferral
Individuals and businesses with outstanding quarterly bills for the 2019-20 FY (third and fourth quarter instalments) will be able to defer these payments for 6 months (up to 28,000 private land tax ownerships will benefit). No application is required. Notices will still be issued but will contain information regarding the deferral.
The deferral does not apply to liabilities in arrears.
25% Land Tax Relief (Waiver)
SA landlords may be eligible for a 25% reduction on the land tax payable on a parcel of land in the 2019-20 land tax year if the:
- land is used for residential or non-residential (commercial) purposes;
- land is being leased to either a residential tenant or a non-residential (commercial) tenant with annual turnover of $50M or less,
- tenant has been financially impacted as a result of the COVID-19 pandemic;
- landlord reduces the rent of the affected tenant by at least as much as the land tax reduction – i.e. the saving is passed on to the tenant; and
- land tax is directly related to the land for which the rent has been reduced.
A financially impacted tenant is:
- a commercial tenant that is eligible for the JobKeeper Payment; and
- a residential tenant that has suffered financial hardship due to COVID-19 (Further information will be available as part of the application process).
The relief is also available to residential and non-residential land owners who are unable to secure a tenant because of COVID-19. To be eligible for land tax relief, eligible landlords will need to demonstrate that the land was leased to 30 March 2020, but has since been vacant due to the impact of COVID-19.
Landlords who have already fully paid their 2019-20 land tax liability and are eligible for relief under this scheme will be issued a refund equal to the value of eligible land tax relief.
Applications for this relief will be open until the end of June 2020 and details on the application process are being finalised and will be available shortly.
Increasing the Land Tax Transition Fund
As part of transitioning to the new land tax regime, an ex gratia relief scheme was created to provide relief from increases in an owner’s land tax due to aggregation.
The following table summarises the relief provided where a land owner experienced an increase in land tax above $2,500 but less than $102,500 due to the aggregation measures from 30 June 2020:
|Financial Year||Relief %||Di Minimis||Maximum||Notes|
|2020-21||50||$2,500||$102,500||No relief if increase >$102,500|
|2021-22||30||$2,500||$102,500||No relief if increase due to surcharge|
For 2020-21, the amount of the relief will be increased from 50% to 100% based on existing relief criteria guidelines. Additional relief is therefore capped at $50,000.
4. Other Stimulus Measures
Rent Reductions where the Landlord is the SA Government
State Government agencies will provide full rent relief for tenants of commercial, retail, industrial and other non-residential sites that have been forced to close or are significantly impacted as a result of COVID-19.
The rent relief will provide relief to impacted tenants from the date they were forced to close their business or were significantly impacted to 30 June 2020.
Fees and Charges
Liquor licence fees for 2020-21 for hotels, restaurants, cafes and clubs that are forced to close as a result of new social distancing restrictions will be waived.
Job Accelerator Grants (JAG)
The Government is relaxing the existing Job Accelerator Grant (JAG) criteria requiring an employer to have maintained their overall employment levels for a full year to be eligible for their second anniversary JAG payment.
Claims for the second JAG payment from 1 February to 30 June 2020 will be assessed on staffing levels as at 31 January 2020 rather than the relevant two year anniversary date.
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