Article last updated: 13th April 2020
Important Disclaimer: This article is general in nature and should not be taken as financial or taxation advice for your specific business.
Covid-19 is presenting commercial challenges to Australian retail on a scale that most have never experienced before.
However, there are a plethora of nationwide and state-based financial support programs available to help retailers navigate these turbulent times.
These measures cover all the core areas of expenditure and investment for retailers including:
- Rent/lease/other property costs
- Payroll tax
- Tax deductions for investment in business assets
- Grants and loans
- Debt relief
- IT & Digital
- Utility bills
- Imports & exports assistance
We’ve collected all of these major national and state-based programs together in one place so you can check if you’re leveraging all the support available to your retail business.
Federal Government and Nationwide Programs:
Rent relief for commercial tenants
The Government has announced a range of measures to help commercials renters. This includes a temporary hold on evictions and a mandatory code of conduct for commercial tenancies to support small and medium sized enterprises (SMEs) affected by coronavirus
Hold on evictions for renters
Evictions will be put on hold over the next 6 months for commercial and residential tenants in financial distress, who are unable to meet their commitments due to the impact of the coronavirus.
Rent Reductions and More – The Code of conduct for commercial tenancies
This code applies to tenants that are:
- a small to medium sized business with an annual turnover of up to $50 million
- eligible for the JobKeeper Payment (see details on this below)
Rent reductions will be based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants.
The policy will include a mutual obligation requirement on the small and medium sized businesses and not-for-profit tenants to continue to engage their employees through the JobKeeper Payment where eligible, and if applicable, provide rent relief to their subtenants.
Australian and foreign banks, along with other financial institutions operating in Australia, are expected to support landlords and tenants with appropriate flexibility as they work to implement the mandatory Code.
The Government is also waiving rents for all its small and medium enterprises and not-for-profit tenants within its owned and leased property across Australia.
The code and its principles will be implemented and regulated by your relevant state or territory. The code includes a common set of 14 principles. These include that:
- landlords must not terminate leases for non-payment of rent during the COVID-19 pandemic (or reasonable recovery period)
- tenants must stay committed to their lease terms (subject to amendments)
- landlords must offer reductions in rent (as waivers or deferrals) based on the tenant’s reduction in trade during COVID-19
- benefits that owners get for their properties (e.g. reduced charges, land tax, deferred loan payments) should be passed on to the tenant (in the appropriate proportion)
JobKeeper Payment to cover employee wages
Businesses impacted by the coronavirus will be able to access a subsidy to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee until 27 September 2020. Employers (including not-for-profits) will be eligible for the subsidy if, at the time of applying:
- their business has a aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their turnover has fallen by more than 30 per cent or more; or
- their business has an annual turnover of $1 billion or more (for income tax purposes) and they estimate their turnover has fallen or will likely fall by more than 50 per cent; and
- the business is not subject to the Major Bank Levy.
- The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and can confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
The JobKeeper Payment will also be available to sole traders or self-employed people.
Further information is available at: https://www.business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business/JobKeeper-Payment-for-sole-traders
Boosting cash flow for employers
The Boosting cash flow for employers measure will be done through two sets of cash flow boosts delivered from 28 April 2020 to support employers to retain employees. Through the Australian Taxation Office (ATO), the Government will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses, delivered through credits in the activity statement system, when eligible businesses lodge their activity statements.
You will be eligible to receive the cash flow boost if you are a small or medium business entity, including not-for-profit organisations, sole traders, partnership, company or trust that:
- held an ABN on 12 March 2020 and continues to be active
- has an aggregated annual turnover under $50 million (generally based on prior year turnover)
- made eligible payments you are required to withhold from (even if the amount you need to withhold is zero)
You don't need to apply, the cash flow boost is a tax free payment to employers and is automatically calculated by the Australian Taxation Office (ATO). There are no new forms required.
For further information, see: https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/
Apprentices and trainees wage subsidy
If you employ an apprentice or trainee you may be eligible for a wage subsidy of 50 per cent of their wage paid from 1 January 2020 to 30 September 2020. Register for the subsidy from early April 2020.Employers will be reimbursed up to a maximum of $21,000, per eligible apprentice or trainee ($7,000 per quarter).
For further information, see: https://www.australianapprenticeships.gov.au/
Increased Instant Asset Write-Off (Tax Deduction)
The Instant Asset Write-Off (IAWO) provides cash flow benefits for businesses to immediately deduct purchases of eligible assets they invest in such as equipment and software (except in-house developed software).Under instant asset write-off eligible businesses can:
- immediately write off the cost of each asset that cost less than the eligible threshold
- claim a tax deduction for the business portion of the purchase cost in the year the asset is first used or installed ready for use.
Effective from 12 March 2020 and until30 June 2020, the instant asset write-off threshold has now been:
- increased from $30,000 to $150,000
- Expanded to include businesses with aggregated annual turnover of less than $500 million
The threshold applies on a per asset basis, so eligible businesses can immediately write‑off multiple assets.
From 1 July 2020 the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.
Investment in retail management software such as Retail Express and/or our integrated Shopify eCommerce solution are eligible under the instant tax write-off scheme. There is a need to demonstrate any claimed assets are ‘in-use’ or ‘installed ready to use’ for them to be eligible for the write-off in the current financial year. With our expert implementation approach, we are able to install within the required time-frames for those retailers who enquire soon. However, it is essential that you seek the advice of taxation professional if you are looking to take advantage of the instant asset tax write off to account for your businesses unique circumstances.
Accelerated Depreciation Deductions - Backing Business Investment (BBI)
A time limited 15 month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions.
Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost. To be eligible to apply the accelerated rate of deduction, the depreciating asset must:
- not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules
- be new and not previously held by another entity (other than as trading stock)
- be first held on or after 12 March 2020
- first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021.
- Under the measures, different rules apply depending on whether or not an entity is using the simplified rules for capital allowances for small businesses.
Access to new, unsecured loans
Under the Scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months. SMEs with a turnover of up to $50 million will be eligible to receive these loans. The Government will provide eligible lenders with a guarantee for loans with the following terms:
- Maximum total size of loans of $250,000 per borrower.
- The loans will be up to 3 years, with an initial 6 month repayment holiday.
- The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.For further information, see https://treasury.gov.au/coronavirus/sme-guarantee-scheme
Deferral of Loan Repayments - Australian Banks Business Relief
If your business has been adversely impacted by COVID-19 your bank will allow you to defer principal and interest repayments for all loans attached to the business for a period of six months. While the interest will be capitalised and paid off over the life of the loan. Support now extends to 98% of all businesses with a loan from an Australian bank.
While you won’t make any principal or interest payments for the six months, interest will continue to be accrued, it can then be paid off over the life of the loan once repayments begin again, or the length of the loan can be extended. This is a discussion that should be had between you and your bank.
To be eligible, you must have less than $10 million total debt to all credit providers. You need to be current, and not in arrears as of 1 January 2020. It does not matter how many people you employ. Some banks are applying these criteria flexibly, so if you fall outside please contact your bank to discuss your situation.
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will also be able to defer business loan repayments for six months. These businesses are generally much larger and employ a greater number of people.
For further information, see https://www.ausbanking.org.au/covid-19/the-business-relief-package/
Temporary Debt relief for financially distressed businesses & directors
The elements of the package are:
- A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive
- A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition
- Temporary relief for directors from any personal liability for trading while insolvent
- Providing temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the coronavirus health crisis.
- The Australian Taxation Office (ATO) will tailor solutions for owners or directors of businesses that are currently struggling due to the coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Electricity and gas network relief package
Small businesses that are temporarily closed due to COVID-19 may be eligible for full electricity and gas tariff relief under a financial support package organised by Energy Networks Australia. Eligibility criteria apply, including usage figures and time limits. For more information, visit Energy Networks Australia.
Australian Capital Territory
Payroll tax deferral
All ACT businesses with Australia-wide wages of up to $10 million can defer their 2020-21 payroll tax, interest free until 1 July 2022. Businesses will need to complete a simple online application form to confirm their eligibility by visiting the ACT Revenue Office website at: www.revenue.act.gov.au
Eligible businesses will need to lodge their payroll tax returns as normal but will not be required to make the associated payment at the usual time. If the deferred amount is paid before 1 July 2022, no interest will be charged. Interest will be applied to any outstanding deferred amounts from 1 July 2022.For those who lodge their payroll tax assessment monthly, deferral can commence for their July 2020 payroll tax liability, which is usually payable by 7 August. For those who lodge their payroll tax assessment annually, they can defer payment of their full 2020-21 payroll tax liability, which is usually payable in July 2021.
Rental relief to tenants of ACT Government owned properties
The ACT Government will review rent charges for commercial tenants of ACT Government properties whose operations have been significantly impacted by COVID-19. Commercial tenants that can demonstrate this may receive rental relief for up to six-months from 1 April 2020 will need to email ACT Property Group at: ACTPGExecutiveSupport@act.gov.au
For further information on latest support available from the state government, see https://www.covid19.act.gov.au/economic-support/economic-survival-package/supporting-local-businesses-and-the-economy
Business Improvement Grant
A $10,000 grant to purchase goods and services to make permanent physical improvements to your business (land and / or building) that help its operations and customer experience. You can apply if you are a business or enterprise that:
- services its customers or clientele from a shopfront premises
- has a valid legal entity and holds a valid Australian business number (ABN) from the date the program was announced (18 March 2020)
- is not an excluded recipient - refer to the terms and conditions
- has its principal place of doing business physically located in the Northern Territory (NT)
- offers goods and / or services to the public
- was offering its services wholly or substantially in the NT for at least one month at the time of applying for a grant.
Eligible works include:
- buying new equipment
- new shop fit outs
- physical changes to attract customers.
For work valued at more than $10,000, the co-contribution by the Territory Government is limited to $10,000 on a dollar-for-dollar basis up to a maximum grant of $20,000.
Small Business Survival Fund
This fund is specifically targeted at supporting industries such as retail, hospitality, tourism and entertainment businesses. Eligible businesses will be able to apply for two payments:
- an immediate survival payment of between $2,000 and $50,000 to help offset the immediate cost pressures on businesses
- a rapid adaption payment of between $1,000 and $5,000 to help businesses make the necessary changes they need to help adapt to the new operating environment.
New South Wales
Payroll tax changes
The NSW Government has deferred payroll tax payments for all businesses for 6 months in response to the COVID-19 pandemic. Businesses with payrolls of $10 million or less will also be eligible for a 25 per cent reduction in their annual liabilities for 2019-20, when they complete their annual reconciliation. These businesses will save around $450 million in payroll tax in 2019-20.The key changes include:
- Tax-free threshold increase from $900,000 to $1 million.
- Deferral of payroll tax for business with payrolls over $10 million for 6 months (up to $4 billion deferred).
- An additional 3-month deferral for businesses with payrolls of $10 million or less who received a 3-month waiver on payroll tax in the first package.
For more information about payroll tax changes, visit Revenue NSW https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/payroll-tax
Small Business Grant
The NSW COVID-19 Small Business Support Grant of $10,000 will be available to eligible NSW small business owners. The application form will be available on the Service NSW website by 17 April.
To be eligible, businesses will need to:
- have between 1-19 employees and a turnover of more than $75,000
- a payroll below the NSW Government 2019-20 payroll tax threshold of $900,000
- have an Australian Business Number as at 1 March 2020, be based in NSW and employ staff as at 1 March 2020
- be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020
- use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice
- provide appropriate documentation upon application.
Deferral of rents of government-owned property
The NSW government will be deferring rents for 6 months for commercial tenants with less than 20 employees in all Government-owned properties. For further information on latest support available from the state government, see https://preview.nsw.gov.au/covid-19/businesses-and-employment
Payroll tax support
- refunds of payroll tax for 2 months
- a payroll tax holiday for 3 months
- deferral of paying payroll tax for the 2020 calendar year.
Jobs Support Loans
Expressions of interest are now open for a $500 million loan facility to support Queensland businesses, impacted by COVID-19, to retain employees and maintain their operations.
The loan facility will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period.
For further information see: http://www.qrida.qld.gov.au/current-programs/covid-19-business-support/queensland-covid19-jobs-support-scheme
Business groups with annual Australian wages of up to $4 million will receive a six month payroll tax waiver. Eligible business groups will not be required to pay any payroll tax in the months of April to September 2020.
The payroll tax waiver is expected to provide maximum assistance of $84,150 over the six months to an estimated 2,400 business groups. Business groups with annual Australian wages above $4 million that can demonstrate they have been significantly impacted by COVID‑19 will, upon application, be able to defer payroll tax payments for the six months from April to September 2020. For these eligible business groups, payroll tax payments that were due to be paid from April to September will now be due from October 2020.
Further information is available at https://www.revenuesa.sa.gov.au/grants-and-concessions/covid19-relief
$10,000 Emergency Cash Grants for Small Businesses
Small businesses and not-for-profit entities that employ South Australians who have been highly impacted by the COVID-19 pandemic may be eligible to receive a $10,000 grant to support the operation of their business.
The grant is being funded from the State Government’s $650 million Jobs Rescue Package. To be eligible, businesses and not-for-profits including eligible sporting and community organisations will need to:
- Employ people in South Australia.
- Have annual turnover of more than $75,000 (GST exclusive).
- Have an annual payroll of less than $1.5 million, and not be entitled to a payroll tax waiver under COVID-19 support measures introduced by the South Australian Government.
- Have an ABN and were carrying on the operation of the business in South Australia on 1 March 2020.
- Have been subject to closure or highly impacted by COVID-19 related restrictions^.
- Apply by 1 June 2020.
- Use the funds to support activities related to the operation of the business.
Job Accelerator Grants Criteria Relaxed
The Government is relaxing the existing Job Accelerator Grant (JAG) criteria requiring an employer to have maintained their overall employment levels to be eligible for their second JAG payment. The Government understands that due to the impact of COVID-19, some employers may not be able to meet this criteria.Applications for the second JAG payment from 1 February to 30 June 2020 will be assessed on staffing levels as at 31 January 2020 rather than the relevant anniversary date.
Further information is available at https://www.revenuesa.sa.gov.au/grants-and-concessions/covid19-relief
Business Continuity Grant
To assist small business fight the economic impact of COVID-19 and prepare the foundation to set Tasmania up for a rapid recovery when the situation eases, one-off grants of up to $750 are available through the Business Continuity Grant.
Further information is available at: https://www.business.tas.gov.au/covid-19_business_support_packages/business_continuity_grant2
Business Support Loan Scheme
Loans from $20 000 up to $250 000 are available to assist eligible businesses for the purpose of supporting business continuity, viability and sustainability during the Coronavirus period. The loans are now open.
For further information, see:https://www.business.tas.gov.au/covid-19_business_support_packages/business_support_loan_scheme
Small Business Hardship Grant
For small businesses in the identified sectors that are experiencing severe financial hardship, grants of $15,000 grants will be made available.
For further information, see:https://www.business.tas.gov.au/covid-19_business_support_packages/small_business_hardship_grant
Small Business Emergency Support Grant
To assist affected small businesses in the identified severely impacted industries, grants of $2500 are available through the Department of State Growth as one off emergency support payments.
For further information, see:https://www.business.tas.gov.au/covid-19_business_support_packages/small_business_emergency_support_grant
Businesses with annual Victorian taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived. Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year. The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year. These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year.
For further information, see: https://www.sro.vic.gov.au/coronavirus
Business Support Fund
Eligible businesses can apply for a one-off $10,000 grant which can be used towards costs such as utilities, rent and salaries, and activities to support business continuity planning.
For further information, see: https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund
- Payroll tax will be waived from March to June 2020 for employers, or groups of employers, whose Australian taxable wages are less than $7.5 million at 30 June 2020.
- A one-off grant of $17,500 will be given to employers, or groups of employers, whose annual Australian taxable wages for 2018-19 were more than $1 million and less than $4 million. Grants will automatically be paid by cheque from July.
- JobKeeper Payments - Wages paid by employers that are subsidised by the Australian Government’s JobKeeper Payment are exempt from payroll tax. The exemption does not apply to any part of wages that are not subsidised.
- The payroll tax threshold will be increased to $1 million on 1 July 2020. This replaces the previously announced increase planned for 1 January 2021. The threshold increase will be reflected in Revenue Online when it comes into effect in July. The initial threshold increase to $950,000 that came into effect on 1 January 2020 is already reflected in Revenue Online for employers lodging monthly and quarterly returns. Employers who cancel their registration as a result of the increase will need to wait until the annual reconciliation function is available in August 2020 for adjustments to be made to their tax liability.
For the latest information see: https://www.wa.gov.au/government/multi-step-guides/payroll-tax-employer-guide/covid-19-relief-payroll-tax-employer-guide
Interest free and late payment arrangements for taxes
Affected businesses can apply for interest free payment arrangements and for late payment penalties to be waved for a range of taxes and duties, including payroll tax, transfer duty, landholder duty, vehicle licence duty or land tax.
Rental payments on government owned buildings
The WA Government will waive rental payments for small businesses and not-for-profit groups in State Government-owned buildings for six months.
Power and water bills
- One-off $2,500 credit on electricity bills for small businesses that consume less than 50MWh per annum.
- Power and water disconnections will not occur and interest will not be charged on deferred payments until 30 September for small businesses facing financial difficulty due to COVID-19. Please note: This applies to Synergy and Horizon Power customers.