Ground-breaking support to help NSW businesses grow and create jobs
From $1,500 digital vouchers for smaller enterprises to cover government fees and charges, to relief from payroll tax, and a 3-year extension of the Business Connect program, NSW businesses are set to benefit from tax relief and other support measures designed to improve cash flow and help hire more staff as the State Government moves forward with its COVID-19 stimulus and economic recovery plan outlined in the 2020-21 NSW Budget.
Small businesses make up 97.5% of businesses in NSW and are a prime focus of the NSW Government’s 2020-21 Budget. If businesses are supported in post-COVID-19 recovery, they are more likely to stay in business, keep people in jobs and create new jobs as part of the State’s economic recovery.
With numerous businesses impacted by drought, bushfire and COVID-19, this year it is important that support is available at this critical time.
Key Measures
Key NSW Budget business and employment support measures include:
- 2-year payroll tax rate cut from 5.45% to 4.85%. More information on the payroll tax changes will be made available on the Revenue NSW website.
- Permanent increase in payroll tax threshold from $1 million to $1.2 million. These tax cuts, worth $2.8 billion, will provide an average saving of around $34,000 a year for the next two years for businesses liable for payroll tax.
- $500 million Out & About program providing NSW residents with $100 of digital vouchers to redeem on dining out and entertainment activities to boost businesses and encourage spending locally. For information on the Out & About scheme, visit nsw.gov.au. Information on the digital vouchers will become available on the Service NSW website in coming weeks.
- $472 million for new digital vouchers worth $1,500 which can be used by small businesses under the payroll tax threshold towards the cost of government fees and charges.
- More than $39 million funding boost for the Business Connect program, extended for three more years to support small businesses in accessing business advice.
- $5 million for the NSW Small Business Commission to establish a new tendering support service under a 4-year program, assisting small business to prepare and submit Government tenders.
- $2 million to continue the Small business rebate program, providing up to $500 to support small business owners and sole traders who buy and install safety equipment; and
- Temporary extension to 28 March 2021 of the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles for retail tenants only with an annual turnover of less than $5 million. Landlords who provide rent reductions between 1 January 2021 to 28 March 2021 to eligible retail tenants experiencing financial distress due to the COVID-19 pandemic can apply for land tax relief of up to 25% on the land leased for the 2021 land tax year.
- As a longer-term tax reform objective, the NSW property tax system has been flagged for reform around its inefficiencies and barriers to homeownership. The next step will invite public feedback on a possible transition away from the current transfer duty (stamp duty) and land tax system and move instead to a property tax system to boost long-term economic growth.
Need help?
If you would like more detailed information, you can read the full NSW Budget 2020 – 2021 Overview and the NSW Treasurer’s Speech.
For further assistance to interpret these changes and how they may affect your individual circumstances or your business, please contact your Allan Hall Advisor on 02 9981 2300.