Government extends SME Recovery Loan Scheme to 30 June 2022
The Government has recently extended the SME Recovery Loan Scheme by a further six months (to 30 June 2022) to support SMEs adversely economically affected by the Coronavirus Pandemic.
Under the Scheme, eligible businesses can obtain loans through participating bank and non-bank lenders with the backing of a Government loan guarantee.
Around 80,000 loans worth approximately $7.3 billion have been written to date since the Scheme commenced in March 2020.
SMEs who are dealing with the economic impacts of COVID-19 with a turnover of less than $250 million will be able to access loans of up to $5 million over a term of up to 10 years.
Other key features of the Scheme include the following:
- Lenders can offer borrowers a repayment holiday of up to 24 months.
- Loans can be used for a broad range of business purposes, including to support investment.
- Loans may be used to refinance any pre-existing debt of an eligible borrower.
- Loans can be either unsecured or secured (excluding residential property).
Importantly, the Government’s loan guarantee has been reduced to 50% (down from 80%) for loans available from 1 January 2022 until 30 June 2022.
COVID-19 vaccination incentives and rewards
The ATO has reminded employers to consider their tax and super obligations when employees are provided with incentives or rewards for getting their COVID-19 vaccination.
Note that certain FBT exemptions and reductions
may apply in some circumstances. Higher PAYG withholding rates
continue to apply to backpackers
As we recently communicated, the High Court
has held that the 'working holiday maker tax' (also
known as the 'backpackers tax') did not apply to a
taxpayer on a working holiday visa from the United
Kingdom who was also an Australian tax resident.
If a working holiday maker employee has had
excessive amounts of PAYG withheld from their
salary, they can lodge a tax return at the end of the
income year to receive a tax refund (where eligible).
Single Touch Payroll exemption
extended for WPN holders
The ATO has extended the Single Touch Payroll
(‘STP’) reporting exemption available to entities
that have a withholding payer number (‘WPN’). Payment extension relating to
JobKeeper objections
The JobKeeper rules have been amended to ensure
the ATO can make payments to certain taxpayers
after 31 March 2022. Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
When employees are provided a cash payment,
including paid leave for employees to get their
COVID-19 vaccination (or additional paid leave
to recover from any vaccination side effects),
employers should withhold PAYG withholding and
make super contributions on the amount.
Furthermore, the payment must be reported to the
ATO via Single Touch Payroll (‘STP’) as part of the
employee's salary or wage.
On the other hand, employers must consider
the FBT consequences of providing non-cash
benefits as an incentive for their employees to
get vaccinated.
Such benefits may include:
For example, if an employer provides or pays for
an employee's transport to get their COVID-19
vaccination, there is generally no FBT payable.
This was due to the application of the Double
Tax Agreement between Australia and the United
Kingdom.
This tax treatment will only apply where the working
holiday maker is both an Australian resident for tax
purposes and from Chile, Finland, Japan, Norway,
Turkey, the United Kingdom, Germany or Israel.
However, the ATO has recently told employers that
the higher PAYG withholding rates continue to apply
to working holiday maker employees.
This is regardless of the country they are from
(unless the employer receives an PAYG variation
notice from the ATO).
Broadly, the working holiday maker withholding
rates apply as follows:
Tax rates change for amounts above
$45,000.
The foreign resident withholding rates must
be applied to income over $120,000.
As a result of this extension, certain entities that
have a WPN (but not an ABN) will not be required
to report under STP for the 2021‑22 and 2022-23
financial years.
This continues the exemption that has been provided
to relevant entities since the commencement of the
2018-19 financial year.
Where a taxpayer has objected to an ATO decision
relating to JobKeeper, a payment can be made
by the ATO after 31 March 2022 to give effect to
the objection decision and decisions of the AAT
or a court.
Importantly, this extended payment date will only
apply where a valid objection was given to the ATO
on or before 30 November 2021.