Government Support Grants

Government Support Grants

 

Tax issues for businesses that have received a support payment

 

Taxpayers who have received a government support grant or payment recently to help their business recover from COVID-19 or a natural disaster should check if they need to include the payment in their assessable income.

 

Grants are generally treated as assessable income, and taxpayers may be able to claim deductions if they use these payments to:

 

  • purchase replacement trading stock or new assets;
  • repair their business and fit out; or
  • pay for other business expenses.

 

However, some grants are treated as non-assessable, non-exempt (‘NANE’) income. This means taxpayers don’t need to include them in their tax return if they meet certain eligibility requirements.

 

Non-assessable, non-exempt grants include but are not limited to COVID-19 business support payments, natural disaster grants, and water infrastructure payments.

 

Taxpayers can only claim deductions for expenses associated with NANE grants if they relate directly to earning their assessable income, including wages, dividends, interest and rent. Taxpayers cannot claim expenses related to obtaining the grant, such as accountant’s fees.

 

Ref: ATO website, Small Business Newsroom, 12 October 2023

 

 

 

Are you looking for an advisor that will keep you up to date and provide guidance and tips like in this blog? Then why not contact me at our Falconbridge office or Luera office in Blue Mountains office to arrange a one-on-one consultation. Just Book Free Consulation up on the right to find the appointment options.

 

Yan Qi CA

 

 

 

 

Mobile: 0403 050 779

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.