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Re: Business Support grants - Vic

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Devotee Registered Tax Practitioner

Replies 5

@NicolaATO 

 

Thank you for your reply.

 

I have looked at TR 2006/3.

 

The ATO appears to have changed its format to issue shorter Fact Sheets (with links) rather than have someone read a "long" Tax Ruling.  Please confirm.

 

I note that TR 2006/3 was last amended on 14 November 2018 - pre Covid.

Could you please advise why TR 2006/3 does not make reference to Covid.

I do understand that there could be some 150 Covid related Grants.

 

Is it possible for the ATO to publish a Fact Sheet that addresses Covid related Grants and provides clarity rather than saying some Grants may be Assessable and some Grants may not be Assessable?

 

The Covid world has forced some/many businesses into financial distress and placed business owners under stress. Indeed many businesses were forcibly closed by the State Government and other business owners closed due to health concerns (and rightly so).

A Business Owner could well be dismayed when a Tax Accountant informs them the Covid State Government Grant is Assessable Income - I could empathise with this.

 

I do hope all is well.

 

Duncan

 

 

 

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Community Manager

Replies 4

@DuncanS understand where you're coming from and agree, it's a difficult time and the list of different government grants is lengthy. We're currently developing some guidance around the tax treatment of state and territory grants. We'll let you know when it's available - hopefully soon.

 

Update - I have checked with our technical area and TR 2006/3 sets out the broad principles about how payments to entities to commence, remain in or cease business are taxed. It hasn’t been updated with specific grants like those related to COVID.

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Devotee Registered Tax Practitioner

Replies 1

@NicolaATO 

 

Please keep me informed.

 

Watched the TPB webinar with Sylvia Gallagher today (30 July).

Sylvia did a good job once again.

 

A number of Agents were posting question on the tax status of Covid Grants. 

 

Duncan

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Community Manager

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Hi @DuncanS 

Just letting you know that we have published guidance on the income tax and GST treatment of state and territory grants and payment. Let us know if you have any feedback and we'll pass it on.

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Newbie

Replies 1

Hi,

 

On another note, do competitive local government grants e.g. offered by City of Sydney here: https://www.cityofsydney.nsw.gov.au/__data/assets/pdf_file/0003/320448/Covid-19-relief-grants-progra... count as assessable income? It is not, from my understanding, a subsidy designed to help businesses carry on, but rather to adapt their business model to keep revenue flowing. As mentioned, it is competitive which means not every applicant, even if eligible, would have been successful in obtaining it.

 

Thank you.

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Community Support

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Hi @bhefer

 

For information on the specific grant you received you will have to contact the depart providing it.

 

We can confirm that if you receive one of the following state or territory grants or payments before 30 June 2020, it is assessable income and you will need to declare it in your 2020 tax return:

  • New South Wales Government Small Business COVID-19 Support Grant
  • South Australian Government $10,000 Emergency Cash Grants for Small Businesses
  • South Australian Government Job Accelerator Grant Scheme
  • Victorian Government Business Support Fund
  • Payments under the Northern Territory Government Small Business Survival Fund
  • Northern Territory Government Business Improvement Grant
  • Western Australian Government Small Business grant scheme

All the best!

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I'm new

Replies 1

Hi @NicolaATO ,

 

RE: " I can confirm that if you receive one of the following grants or payments before 30 June 2020, it is assessable income and you will need to declare it in your 2020 tax return...

  • Victorian Government Business Support Fund"

 

I may be missing something, but this seems to contradict information on the VIC Gov't website regarding the tax treatment of the Victorian Business Support Fund grants.

 

Quote from this page: https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-pac...

"Government grants received, such as JobKeeper and the Business Support Fund - Expansion, when the grant is a “payment for no supply” and not taxable - are not to be included in annual turnover figures."

 

Can you provide any further information to clarify this please?

 

Thanks! Smiley Happy

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Newbie

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Hi,

I agree that this information is contradictory and am a little confused.

If it is taxable would this also mean that the latest Business Support Extension Grants are taxable?

Please confirm ASAP.

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Newbie

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Hi @NicolaATO 

Can you please confirm if the latest Victorian Business Government Extension Grant is taxable??