As Parliament commences its first sitting week for the year, a new bill, Treasury Laws Amendment (2019–20 Bushfire Tax Assistance) Bill 2020, has been scheduled for debate.
While details on the bill have been scant, it is expected to exempt from tax Disaster Recovery Allowance payments to individuals, and payments under Disaster Recovery Funding Arrangements to small businesses and primary producers.
RSM associate director Tracey Dunn is hoping Treasury considers her recommendation to introduce a special exemption for SME employers who may not be able to meet their compulsory employee superannuation obligations on time due to the destruction of their business premises or due to evacuation.
“I appreciate that the current law is designed to protect employee entitlements. However, I believe there should be an exemption where employers are unable to meet their obligations in extreme circumstances such as natural disaster,” Ms Dunn told Accountants Daily.
“Small business owners who have lost their homes or business premises due to the bushfire emergency should not be faced with an additional administrative burden and loss of tax deductions because current superannuation guarantee legislation does not provide an exemption for natural disasters.”
Ms Dunn, who has written to Treasurer Josh Frydenberg and Small Business Minister Senator Michaelia Cash in recent weeks, is hoping the new bill will include an exemption from the imposition of administration fees, penalties and to allow tax deductibility of SGC payments for SMEs impacted by the bushfires.
Over the last month, the government has committed to a range of measures to help impacted small businesses, including extending the ATO’s automatic deferral program to 28 May 2020 to lodge and pay business activity statements and income tax returns.
Impacted businesses that pay their pay-as-you-go instalments quarterly have also been allowed to vary these instalments to zero for the December 2019 quarter and claim a refund for any instalments made in the September 2019 quarter.
Mr Frydenberg’s office was unable to provide a response at the time of publication.