The recent bushfires across much of the country are a reminder that as well as the more obvious immediate devastation inflicted on people’s property, these destructive events can also mean loss of income for many affected people — not only directly, but also in terms of damage done to workplaces, income-earning tools of trade, vehicles and essentials such as computers and other equipment.
The Tax Office says that if you are affected by natural disaster, such as bushfires, floods or storms, you need not worry about your tax affairs right away. It says it will give you time to deal with your more immediate problems first, and later can help you to sort out your tax affairs.
More time to lodge, pay and respond
The Tax Office says that your tax obligations can generally be put to one side until you have dealt with the immediate effects of the disaster – whether you are affected yourself or are helping those affected. It can allow more time to settle tax debts, or if you are unable to lodge your return or activity statement, or cannot immediately deal with any other correspondence that may be in train.
The Tax Office also says that if a business owner is unable to lodge a superannuation guarantee charge (SGC) statement, it can give you more time to lodge, although you will still be liable for the SGC and the nominal interest component (NIC) will continue to accrue. You may be able to vary the amount of your next instalment if you are liable to pay your tax by instalments under the PAYG Instalments system.
Early access to your money
If you are expecting a refund from an income tax return or activity statement, the Tax Office may be able to arrange for your refund to be issued as a priority. In limited circumstances, you may be able to access your superannuation to assist you and your dependants, but special consideration will need to be sought.
Assistance payments
After a natural disaster, it may be the case that you receive assistance from government authorities, charitable institutions, employers, your family, a trade union or other sources. Most one-off assistance payments are tax free, but regular Centrelink payments remain taxable.
Damaged or destroyed property
If your property is damaged or destroyed in a disaster, you may receive an insurance payment. How this is treated for tax purposes depends on the type of property and whether or not the property is income- producing. Repairs to income-producing properties are generally tax deductible in the year you incur them. However, this depends on whether the work you do restores the original condition or goes beyond remedying the damage to the point where it is an improvement or a complete replacement. Talk to this office for guidance.
Reconstructing your tax records
If your records have been lost or destroyed — whether you are an individual, in business, or responsible for a self-managed superannuation fund — talk to this office about how we can help. The Tax Office can also provide assistance to help reconstruct your tax records and make reasonable estimates where necessary.
Fuel tax credits
Following a disaster, you may need to use taxable fuel (such as diesel or petrol) for generating electricity for domestic purposes; you may then be eligible to claim fuel tax credits. Businesses that are registered for goods and services tax (GST) can claim credits for the fuel tax included in the price of fuel used in eligible business activities to run machinery, plant, equipment and heavy vehicles. Non-profit organisations that are not registered for GST can claim credits for fuel used in operating emergency vehicles or vessels.
