As part of its support for businesses in the midst of this COVID-19 crisis, the Queensland Government has made a number of announcements on payroll tax relief that is being offered.
With a lot on their mind and a long way to go in this COVID-19 crisis, business should not forget their state tax obligations and should, where possible, take advantage of the Government’s relief offerings.
WHAT IS BEING OFFERED?
As at Tuesday 24 March 2019, the state taxes relief package offers:
- refunds of payroll tax for 2 months;
- a payroll tax “holiday” for 3 months;
- a deferral of payment for payroll tax for the remainder of the 2020 calendar year.
This applies to any businesses, whether based in Queensland or other states and territories, who have a Queensland payroll tax liability.
ELIGBILITY REQUIREMENTS FOR THE REFUND, HOLIDAY OR DEFERRAL
Employers (or part of a group of employers) who pay $6.5 million or less in Australian taxable wages, may receive an email from the Office of State Revenue about a:
- a refund of your payroll tax for 2 months
- a payroll tax holiday (i.e. no payroll tax to be paid) for 3 months.
Employers can also apply for a deferral of payroll tax for the 2020 calendar year.
Employers who do not receive an email, or are unsure about their eligibility, can complete the refund/holiday application form online.
Employers (or part of a group of employers) who pay more than $6.5 million in Australian taxable wages and have been negatively affected (directly or indirectly) by coronavirus, can apply for a:
- deferral of payroll tax for the 2020 calendar year;
- refund of payroll tax for 2 months.
The Office of State Revenue has said that a business is directly or indirectly affected by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other factors are negatively affected compared with normal operating conditions.
The deferrals are just that, a deferral only, and they are not a waiver or release of any obligation to pay the liability to the Office of State Revenue. The Office of State Revenue is proposing to work with affected businesses to create payment plans doe the deferred liabilities. Businesses should ensure that the terms of the deferral are agreed with the Office of State Revenue, including when unpaid tax interest may be imposed.
With this in mind, businesses will need to budget for the liability to ensure that they can meet the obligation when the deferred payment falls due.
WHAT ELSE CAN BUSINESSES DO TO EASE THE PAYROLL TAX BURDEN?
Where time and money permits, business owners should still be considering:
- whether or not they have a payroll tax liability – including whether taxable wages have been properly calculated;
- whether any payroll tax group which is formed is correct and whether any entities could be excluded from the group (on exercise of the discretion by the Commissioner to exclude them);
- whether there are any exemptions, such as the contractor exemptions, which could apply to reduce their payroll tax liability.
Failure to act to determine whether or not a business has a payroll tax liability now could mean that businesses are unable to access the deferral scheme. Applications for the deferral package can only be made while the package is available. There is no specified end date as yet, so acting now ensures that applications are made within time.
HOW CAN WE HELP?
McInnes Wilson Lawyers can help with a range of payroll tax matters including:
- preparing and completing applications for access to the Queensland Government’s relief package;
- providing advice on exemptions to assist in reducing payroll tax liabilities;
- reviewing payroll tax groups to determine whether there are entities that could, subject to the Commissioner’s discretion, be excluded;
- preparing applications for the exercise of the Commissioner’s discretion to exclude entities from a payroll tax group;
- reviews of assessments issue to ensure that they have been properly calculated;
- preparing objections to assessments.