Relief for SMEs impacted by COVID-19 is being offered by both the Federal and State Governments. In this article, we review the measures recently announced by the NSW Government.
These include a $10,000 grant to eligible "highly impacted" SMEs, to be used for unavoidable business costs and a 25% reduction in annual tax liability when annual reconciliations are lodged (due 28 July) for businesses with payrolls of up to $10 million.
Additionally, the business must have a total annual wages bill of below the 2019-20 payroll tax threshold of $900,000. That is, to be eligible, an SME would currently not be paying payroll tax since it is only required to do so if its total Australian wages exceed the tax-free threshold of $900,000.
Another eligibility requirement is that the business must be classified as "highly impacted" by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020. Industries in which SMEs are considered to be "highly impacted" include retail trade; accommodation and food service; real estate services; administrative and support services; and art and recreation services.
It is not currently clear whether SMEs that fall outside of these industries will meet the "highly impacted" criteria or how they might do so – we expect the NSW Government to provide further details clarifying this issue in the coming days. It is likely that the measure of being "highly impacted" will require an affected business to show a loss of turnover over a set threshold during a specified period. While the threshold has not yet been set, we expect it to be high enough to capture those businesses whose operations are significantly affected by COVID-19.
Details of how businesses may take advantage of the option to defer payroll tax liabilities are expected to be released shortly. Like many measures being rolled out by the Government, the detail tends to follow the announcement a week or so after it.
It is important that, if you are an SME affected by COVID-19, you stay abreast of developments. Check our dedicated COVID-19 web-page (here) for regular updates or get in contact with us to advise you on the options available. We at McCabe Curwood are following the updates closely and can provide you with the timely and accurate advice to ensure you get the full benefit of all measures to support your business.