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Relief for taxpayers in bushfire affected communities

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The ATO has announced concessions to relieve bushfire affected Individuals and businesses of their immediate tax obligations. Latest information on ATO support is available on the ATO website (link below).

For taxpayers who live in one of the identified impacted postcodes, the ATO will automatically defer any lodgments or payments that are due. There is no need to apply for a deferral – it will be automatically applied. Income tax, activity statement, SMSF, FBT and excise return lodgments, and their associated payments, will be deferred until 28 May 2020.

The ATO is also fast tracking any refunds that are due to taxpayers in the impacted regions. It will remit any interest and penalties applied to tax debts since the commencement of the bushfires that have been applied to accounts of individuals and businesses located in impacted regions. For those taxpayers in affected areas with a tax debt or outstanding obligation, the ATO will not initiate debt recovery action until at least 28 May 2020.

Taxpayers can also request payment arrangements for outstanding debts. The ATO will consider releasing individuals and businesses from income tax and FBT debts if they are experiencing serious hardship.

The ATO also offers support to find lost TFNs, reissue returns and statements, reconstruct lost records, fast track refunds, and set up payment plans, etc. People affected outside the listed areas can contact the ATO for support with their particular circumstances.

Tax exemptions for government payments and allowances – now law

The Treasury Laws Amendment (2019–20 Bushfire Tax Assistance) Bill 2020 received royal assent on 13 February 2020 as Act No 1 of 2020.

Under the new law, relief payments to individuals and businesses will be tax exempt, including the one off Disaster Recovery Payment, short-term Disaster Recovery Allowance payments to individuals, and grants or other payments under Disaster Recovery Funding Arrangements. In addition, payments to eligible Rural Fire Service Volunteers in NSW, available to self-employed taxpayers or those who work in small or medium businesses, will also be tax-free. These payments are accessible by volunteers called out for more than 10 days during the recent fire season, for lost income of up to $300 per day, and up to a total of $6,000 per person.

Tax agent registration concessions

The Tax Practitioners Board says that if a tax practitioner’s business or residential address is in one of the impacted postcodes, it will automatically allow them more time to lodge their registration renewal. If impacted by the bushfires but their postcode has not been identified, they can contact the TPB on 1300 362 829 to discuss individual circumstances.

State tax relief

RevenueNSW 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.

In Victoria, the state's premier announced that those whose properties have been destroyed or substantially damaged by bushfires will receive ex-gratia relief for their 2020 land tax assessment. Land tax will also be waived on eligible properties being used to provide free accommodation for people who need it. The State Revenue Office has suspended land tax assessments in the affected areas and will continue to support businesses in these areas. In addition, the state government will provide:

  • relief of up to $55,000 in stamp duty for people who decide not to rebuild in their local community and buy a home elsewhere, and
  • ex-gratia relief of up to $2,100 from the duty on up to two replacement vehicles for people who lost motor vehicles due to bushfires.

In South Australia, the government has announced a number of tax relief measures for people affected by bushfires, including:

  • ex-gratia tax relief for stamp duty payable on the purchase of replacement properties. There will be relief of up to $48,830 in conveyance duty. For replacement homes valued above $1m, duty relief will be capped at $48,830 with the balance of the duty payable
  • ex-gratia tax relief for stamp duty payable on the purchase of motor vehicles. For purchase of a replacement vehicle valued below $50,000, there will be full relief of up to $1,940 for a passenger vehicle or $1,470 for a commercial vehicle
  • ex-gratia land tax relief, including full relief on 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, and
  • putting on hold debt collection of Emergency Services Levy debts.

Fundraising and donations to charities

The National Bushfire Recovery Agency has a list of charities with DGR status that have established bushfire appeals, for which gifts of $2 and above will be tax deductible. Donors can also check if they are donating to a legitimate fundraising website or group by looking up the ACNC’s charity register.

Source: www.ato.gov.au

Image by Terri Sharp from Pixabay

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