MARCH 2021 NEWSLETTER
Welcome….to The Enterprise Sanctuary’s March 2021 newsletter.
As we emerge and enter a phase of new normal, things may have changed and shifted for most of us. As transformations occur around you and your business, we are always here to help and support you.
Today, we will have a look at some Fringe Benefits Tax items, the 2021 land tax relief and a quick summary of the Victorian circuit breaker business support.
FRINGE BENEFITS TAX
The 2020 Fringe Benefits Tax (FBT) year ends on the 31st of March. There have been some recent changes due to Covid-19 that may have affected your FBT obligations. In response to the COVID-19 crisis, lodgments and due dates have been extended.
Taxpayer who self-prepares FBT return or uses a tax agent to lodge FBT returns by paper
Lodge FBT return by 21 May 2020
Pay FBT owing by 21 May 2020
Taxpayer who uses tax agent to lodge FBT returns electronically
Lodge FBT return by 25 June 2020
Pay FBT owing by 28 May 2020
Car parking
Draft Ruling (TR 2019/D5) has generated some changes to the car parking provisions specifically on the interpretation of what constitutes a commercial parking station:
Commercial parking station must be located within a one-kilometre radius of the place of employment
The carpark provides commercial all-day parking fees
Parking for at least 4 hours or more within the vicinity of the place of employment
Carpark provides parking in the ordinary course of business and is a commercial facility
Examples of carparks now includes hospitals and shopping centers which were previously not generally considered to be commercial parking stations for FBT purposes.
The revised Taxation Ruling 2019/D5 if finalized, will come into effect from 1 April 2021.
Travel expenses
Draft Ruling (TR 2019/D7) set outs the deductions allowable for and deductible for FBT purposes. Generally, they include:
The travel occurs on work time
The travel occurs when the employee is under the direction of the employer
The travel fits within the duties of employment
The travel is relevant to the practical demands of carrying out the work duties
The employer asks for the travel to be undertaken.
Taxi travel
FBT exemption was recently amended to include travel to and from the workplace on or after 1 April 2019 in a vehicle involving the transport of passengers for a fare (other than in a limousine). This includes travel in a ride-sourcing vehicle, or other vehicles for hire that do not have a taxi licence.
2021 VICTORIAN LAND TAX RELIEF
Two relief measures relating to 2021 land tax have been announced by the Victorian Government:
Land tax reduction and deferral for landlords, including those with properties that have multiple tenancies, and commercial owner-occupiers - announced on 4 September 2020 and in December 2020.
Vacant residential land tax waiver for 2021 - announced on 10 September 2020.
Applications are currently open for residential and multiple tenancies (residential/commercial) landlords.
Applications will be open for:
single tenancy commercial landlords on 12 April 2021 and;
commercial owner-occupiers landlords on 26 April 2021.
Land tax reduction of 25% and deferral for eligible landlords
Landlords who provide tenants impacted by coronavirus with rent relief consistent with the principles of the Support to Landlords and Tenants package between 1 January 2021 and 28 March 2021 may be eligible for a 25% reduction on the property’s 2021 land tax.
These landlords can defer paying the remainder of their 2021 land tax assessment (and any 2020 land tax previously deferred under the 2020 relief measures) until, or before, 30 November 2021. They can also have any amounts of their 2021 land tax liability that they have already paid returned but must pay their 2021 land tax liability by 30 November 2021.
Eligibility:
Residential landlords:
Eligible residential arrangements include tenancy agreements, specialist disability accommodation agreements and site agreements.
Most holiday accommodation, such as hotels, motels, and bed and breakfasts, as well as rooms in rooming houses, are not rented under eligible residential arrangements, and are therefore not eligible for land tax relief.
Multiple tenancies landlords:
Landlords of properties with multiple tenancies can make a single application for 2021 land tax relief for the whole property, rather than just for the part of the property occupied by eligible tenants who have received rent relief.
Commercial landlords:
To be eligible, commercial landlords need to have provided rent relief consistent with the Commercial Tenancy Relief Scheme, and have their tenant declare that they meet the conditions in either of these 2 categories:
For general commercial tenants:
annual aggregated turnover was no greater than $50 million in either the 2019-2020 or 2020-21 financial year, and
they are eligible for, and participating in, the Australian Government’s JobKeeper Payment in the March 2021 quarter.
For commercial tenants operating a licensed pub, club or restaurant under a general, full club or on-premises liquor licence:
at the premises level, annual turnover was no greater than $50 million in either the 2019-2020 or 2020-21 financial year, and
turnover at that premises in the December 2020 quarter reduced by at least 30% relative to the March 2020 quarter.
Land tax relief will not be provided if the rent relief provided by a landlord to a tenant is:
not genuine nor consistent with the principles of the Support to Landlords and Tenants package, or
the Commercial Tenancy Relief Scheme or f the amount of rent waived between 1 January 2021 and 28 March 2021 is less than 25% of the proportional land tax for the property.
Owner-occupiers of commercial properties:
Owner-occupiers of commercial properties can obtain a 25% waiver of the property’s 2021 land tax and defer paying the remaining 2021 land tax up to 30 November 2021 if their business meets the conditions in either of these two categories:
For general commercial tenants:
annual aggregated turnover was no greater than $50 million in either the 2019-2020 or 2020-21 financial year, and
they are eligible for, and participating in, the Australian Government’s JobKeeper Payment in the March 2021 quarter.
For commercial tenants operating a licensed pub, club or restaurant under a general, full club or on-premises liquor licence:
at the premises level, annual turnover was no greater than $50 million in either the 2019-2020 or 2020-21 financial year, and
turnover at that premises in the December 2020 quarter reduced by at least 30% relative to the March 2020 quarter.
VICTORIAN CIRCUIT BREAKER BUSINESS SUPPORT PACKAGE
A $143 million support package was announced by the Victorian Government to help small businesses and sole traders affected by the recent 5-day circuit-breaker restrictions in Victoria.
There are four initiatives available for eligible businesses as part of this support package:
Business Costs Assistance Program
A one-off grant of $2,000 for eligible employers to assist with costs incurred as a result of the circuit breaker action.
Eligible businesses with an annual payroll of up to $3 million can receive a one-off grant of $2000, whether they have employees or not.
Licensed Hospitality Venue Fund - Circuit Breaker Action Payment
Additional $3,000 one-off payment for eligible businesses who previously received a grant via the Licensed Hospitality Venue Fund (no need to apply for this, the Government will contact previous recipients).
Victorian Accommodation Support Program
This is an expansion of the Regional Tourism and Accommodation Support Program and includes tourist accommodation premises in Greater Melbourne to support accommodation providers whose bookings were cancelled due to the circuit breaker action.
This program supports tourism accommodation providers with a grant of one of two tiers of support for those with demonstrated booking cancellations between Friday 12 February and Wednesday 17 February 2021:
Tier 1: Funding of $2250 (ex GST) per Accommodation Premises experiencing 10 or fewer cancelled nights.
Tier 2: Funding of $4500 (ex GST) per Accommodation Premises with 11 or more cancelled nights.
Travel Voucher Schemes
There’s 2 travel voucher schemes to encourage travel locally within Victoria, consisting of a new Melbourne Travel Voucher Scheme with 40,000 vouchers for travel within Melbourne and expanding the existing Regional Travel Voucher Scheme with an additional 10,000 vouchers for regional travel.
Please contact us at ESF Partners if you would like to talk about these topics in more detail.
Disclaimer
Clients should not act solely on the basis of the material contained in Client newsletter. Items herein are general comments only and do not constitute or convey advice. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. The Client newsletter is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.