If you’ve received a government support grant or payment recently to help your business recover from COVID-19 or a natural disaster, it’s important to check if you need to include the payment in your assessable income.
Grants are generally treated as assessable income, and you may be able to claim deductions if you use these payments to:
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purchase replacement trading stock or new assets
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repair your business premises and fit out
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pay for other business expenses.
However, some grants are declared non-assessable, non-exempt (NANE) income. This means you don’t need to include them in your tax return if you meet certain eligibility requirements.
NANE grants include but not limited to:
You can only claim deductions for expenses associated with NANE grants if they relate directly to earning your assessable income. Assessable income includes things like wages, dividends, interest and rent. You can’t claim expenses related to obtaining the grant, such as accountant fees.
We understand that unexpected circumstances, such as natural disasters, can affect your ability to run a business. We offer a range of tools and services to help small business owners meet their tax and super obligations. To find out more about the support small business owners can access, visit www.ato.gov.au/SBsupport.
You might also be interested in the NewAccess for Small Business Owners programExternal Link and the free confidential, practical support it provides to help small businesses stay on track.
Remember, your registered BAS or tax agent can help you with your tax.
Some government support payments aren’t taxable.
Speak to us today if you need more information or any help with claims.
Source: ato.gov.au October 2023
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/newsrooms/small-business-newsroom/has-your-business-received-a-support-payment.
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