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Workforce Education News - January 2011
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Workforce education news – special edition
January 2011: disaster relief
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Welcome
Welcome to this special edition of Workforce education news, our free email newsletter.
Workforce education news is issued regularly to employers and professional associations to provide you with updates about tax entitlements and obligations that may affect you, your employees, and members of your organisation.
This special edition contains information about what we are doing to support the communities so badly affected by flooding. This may be relevant to you and other small business operators or members of your association so feel free to pass this information on.
Extension to lodge activity statements for flood victims
We recognise that businesses in flood affected areas of Queensland, northern NSW, Victoria and Western Australia may need more time to meet their lodgment and payment obligations.
If your business address is in Queensland, the Tweed area of north-eastern NSW, Victoria or any of the identified flood affected postcodes we will automatically defer your lodgment and payment dates for December monthly activity statements from the original due date of 21 January 2011 to 21 February 2011.
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For more information about help through difficult times and a list of identified affected postcodes, refer to www.ato.gov.au and search for '00189316'.
If your business is not located within the listed postcodes and you require assistance, phone us on 1800 806 218 to discuss your circumstances and how we can help you.
You can check if your business received an automatic deferral through the Business Portal or phone our dedicated emergency support on 1800 806 218.
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How we can help people affected by natural disaster
We may be able to help you by:
- fast tracking refunds
- giving you extra time to
- pay debts
- meet activity statement, income tax and other lodgment obligations
- reconstructing tax records where documents have been destroyed, making reasonable estimates where necessary
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Phone us on 1800 806 218 when you're ready and we can discuss your circumstances and the best way to assist you. If you need help reconstructing your records, register online at www.ato.gov.au/assistancevisit
For more information about help for people affected by natural disaster, refer to www.ato.gov.au and search for '00179960'.
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For employers
Tax exemption for assistance payments paid to flood victims
On 21 January 2011, the Government announced that it will make clean-up and recovery grants, paid under the Natural Disaster Relief and Recovery Arrangements, to primary producers and small businesses affected by the flooding that has occurred since 29 November 2010, exempt from tax.
Such grants are normally treated as assessable income however the Government has decided to make these payments non-assessable, non-exempt income.
The Government also confirmed that it will make Disaster Income Recovery Subsidy Payments, paid to those affected by flooding events in Australia that commenced on 29 November 2010, exempt from income tax.
The Disaster Income Recovery Subsidy Payments, which are administered by Centrelink, provide financial assistance to employees, small business persons and farmers who have lost income as a direct result of the flooding.
For more information on assistance payments, refer to media release 016 on the Treasury website at www.treasury.gov.au
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Tax treatment of interest earned on tax-free payments
If you receive a tax-free disaster relief payment, grant, or insurance payout you might not spend it straight away. You may deposit the tax-free money in your bank account or other financial institution.
The financial institution will pay interest on the money if it has been deposited into an interest-bearing account.
Any interest earned on your tax-free relief grant, payment or insurance payment in your financial institution account will be taxable regardless of whether the relief grant, payment or insurance payment was tax free. The interest that you earned will need to be included on your tax return as interest income.
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For employees
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Claiming deductions for flood-relief donations
We will allow deductions for donations up to $10 made to 'bucket appeals' for the floods without needing to keep a receipt.
People who give to bucket appeals can claim a tax deduction equal to their contribution up to $10 in their 2010–11 tax return without the usual need to keep a receipt.
If a person makes donations over $10 in total to a number of bucket appeals in 2010–11, the person can only claim a maximum of $10 without needing to provide a receipt. Any amount above $10 will require a receipt.
Most major charities are registered as deductible gift recipients but if you are not sure whether an organisation is registered, you can check on www.abr.business.gov.au
For more information about claiming bucket donations to flood relief, refer to www.ato.gov.au and search for '00267947'.
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