Victorian Government’s Economic Survival Package – What it means for you

This information is current as of the publish date, however due to the evolving response to the crisis, please refer to the latest articles here and/or the FAQs page for up-to-date information.

The Victorian Government announced an additional $534 million support package on 10 July 2020 to supplement its $6 billion economic relief package to further assist businesses impacted by COVID-19. Here’s what we think it means for you.

1. Purpose

The package is designed to assist smaller businesses to keep their employees employed and remain solvent during the next period of uncertainty. The stimulus therefore comes in the form of payroll tax refunds, some rent and land tax assistance, and liquor license fee waivers this year.  Medium and large businesses, unfortunately, don’t appear to directly qualify for any State government support under this announcement. The Government is asking all businesses to do whatever they can to support their workers.

2. Payroll Tax Refunds

Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with annual payroll of less than $3 million.  Payments from the Government are due to commence Friday 27 March 2020.

Who? How do I qualify?  How much is the refund? What about the next 4 months to June 2020?
Monthly payroll tax payers Your ‘annual payroll’ (total taxable wages) for the 2020/21 year is less than $3 million. However much you’ve already paid towards your 2021 year PRT liability so far. Appears you won’t pay monthly payroll tax for the next 4 months.
Annual payroll tax payers Same as above. You won’t have paid any payroll tax yet.  Refund or credit likely to come post lodgement of annual PRT return in July 2020. Same as above.

Notes:

  • The maximum PRT benefit would be $113,975 for an employer with the maximum of $2,999,999 of taxable wages.
  • Payroll tax exempt not-for-profits don’t appear to qualify for relief but should approach the government under the Business Support Fund (see below).
  • Employers with total annual taxable wages of $3 million or more appear not to qualify for relief.
  • The SRO has confirmed the $3 million threshold is determined ‘per employer’ and not on a ‘payroll tax group’ basis. Therefore each employer that has annual wages below $3 million will be eligible for the refund.

3. Payroll Tax Deferral

The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.  This means payroll tax will be accruing and payable by 1 January 2021.

  • Following the Victorian Government’s announcement on 10 July 2020, eligible businesses with up to $10 million in payroll can now defer their payroll tax liabilities for the first half of the 2020/21 financial year.

4. Payroll tax and WorkCover premium exemption

On 5 May, the Victorian Government announced that Victorian businesses participating in the JobKeeper scheme will be exempt from Payroll Tax and WorkCover premium on:

  1. payments to employees that are currently stood down; and
  2. payments above a part-time employee’s usual salary to meet the minimum $1,500 fortnightly JobKeeper payment requirement.

This means that businesses will not have to pay more Victorian tax to keep certain staff under the JobKeeper scheme, and provides more incentive for Victorian businesses to retain workers throughout the crisis.

5. Rent Relief from Victorian Government Landlords

Commercial tenants in Victorian State government buildings can apply for rent relief, this is a move private landlords are also being encouraged to undertake.

6. 2020 land tax

2020 land tax payments will be deferred until at least 1 January 2021 for landholders who own at least one (1) non-residential property and have total taxable landholdings below $1 million. Eligible landholders will be contacted by the SRO and may subsequently request a refund for any 2020 land tax already paid.

7. Victorian Government Early Invoice Payment

The Government will pay all outstanding supplier invoices by Friday 27 March 2020.

8. Hospitality Sector

Liquor licensing fees will be waived for 2020 for affected venues and small businesses. If you’ve already paid your fee, you’ll receive a refund.

  • The Victorian Government will be dedicating $30 million in funding to support hospitality businesses operating in the night-time economy hardest hit by the COVID-19 restrictions. Register your interest to stay up-to-date.

9. Business Support Fund

$500 million will be contributed to establish a Business Support Fund. The fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail. It has been established to support those businesses who are too small to access payroll tax refunds.

  • Following the Victorian Government’s announcement on 10 July 2020, businesses in metropolitan Melbourne and the Mitchell Shire affected by the renewed stage-3 restrictions may be eligible to receive a further $5,000 grant.

10. $500M Working for Victoria Fund

The Victorian State Government will establish a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. The fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food.

11. Job Matching Program

The Government will also facilitate job matching to help Victorians find short-term or casual roles.

12. $500M Rent Relief Package

On 15 April, the Victorian Government announced that it will provide $420 million in the form of 25% land tax discounts for landlords who provide rent relief to commercial and residential tenants impacted by COVID-19.  Land tax payment deferrals to March 2021 will also be provided.

The Victorian State Government will also impose a 6-month ban on rental increases on commercial and residential properties, as well as a 6-month ban on evictions for rent non-payment to protect residential and small and medium-sized business tenants experiencing rental distress as a result of COVID-19.  Businesses will be eligible for these measures if they have annual turnover less than $50 million and have experienced more than a 30% fall in turnover.

An $80 million rental assistance fund will also be created to further support residential renters that can demonstrate financial hardship due to COVID-19. To be eligible, renters will need to revise their rental agreements with their landlords and  Consumer Affairs Victoria, have less than $5,000 in savings, and still be paying at least 30 per cent of their income in rent.

13. $20M CBD Business Support Fund

The Victorian Government has also announced a separate $20 million CBD Business Support fund to assist small businesses operating in Melbourne’s CBD.

14. Mental Health Support for Small Businesses

The Victorian Government will invest $26 million in mental health support to help Victorians small businesses owners cope with the challenges of running their businesses during the covid-19 crisis.

15. Regional Tourism Businesses

  • You may be eligible to recover up to $255 per night for up to five nights for each room cancelled due to the renewed stage-3 restrictions, provided the refunds were made in full.
  • The Victorian government will also be assisting with marketing campaigns to promote regional tourism during the lockdown.

The 2020-21 Victorian Budget will be deferred and there will likely be more economic stimulus provided by the Victorian Government.

Victorian Government – Other Covid-19 Support Information

Business Victoria hotline on 13 22 15:

Useful links to information relevant to businesses:

Existing Payroll tax concessions for regional business and businesses impacted by the bushfire crisis – the 2021 year payroll tax rate has been halved to 2.425% for regional businesses:

We will endeavour to keep you updated as the details of these measures become available. We are committed to supporting you through these challenging times, please contact your William Buck adviser if you’d like to discuss what this means for you.

Victorian Government’s Economic Survival Package – What it means for you

Jonathon Larosa

Jonathon is a Director in our Tax Services division. He works across the technology, manufacturing and financial services industries. Jon’s expertise are in taxation for international businesses, IPO tax strategy and strategic business planning.

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