Queensland Flood Crisis: Guidance for Business Recovery

Our thoughts are with those whose lives and livelihoods have been devastated by the recent floods that have hit Queensland and Northern NSW. The devastation wreaked by the floods has had a huge impact on both individuals and businesses. As the community starts to return to work, many operations are faced with considerable challenges in restoring a ‘business as usual’ environment. For some this may take months, if not longer, to achieve.

Where do I start?

Much has been written about the ‘Black Swan’ event for businesses as a result of the GFC, but now our business community must attempt to manage a direct event that has a deeper local impact.

Managing insurance claims

We have witnessed many of our clients initiate disaster recovery plans that have enabled essential aspects of their business operations to continue, but the reality of the devastating physical damage to buildings, plant and equipment and loss of stock have forced some businesses to cease operating temporarily.

Australian Taxation Office (ATO) relief for flood impacted taxpayers

The ATO have responded to the recent Queensland floods by:

announcing that specific administration relief will be provided to impacted businesses in relation to their lodgement and payment obligations, and

Record keeping for taxation purposes

Ensure that you have as many records as possible in relation to your sales and expenses. If hard copy documentation is no longer available, consider whether the data had been entered on a computer system and whether the file is held somewhere in the form of email.

Income tax return lodgement

As a registered tax agent BDO participate in a lodgement program that allows an extension of time to lodge annual income tax returns.

Superannuation payments

Payment obligations for employee superannuation under the Superannuation Guarantee Scheme are still due – the next payment date is 28 January 2011.

Assisting employees

Many employers will seek to assist staff impacted by the floods. A Fringe Benefit Tax (FBT) exemption exists for certain emergency assistance provided to employees.

Goods and Services Tax (GST)

In addition to accessing the concessions provided by the ATO in relation to lodgement and payment extensions, it is also important to remember the following:

Fuel tax credits

Record keeping: Similar to GST, it is important to ensure you have as much data as possible to validate your fuel tax credit claims.

State taxes

The Office of State Revenue in Queensland is prepared to provide individual concessions on state tax obligations for those that have been affected by the floods.

Early release of superannuation

The Australian Prudential Regulation Authority (APRA) has advised that it will expedite written claims made for release on ‘compassionate grounds’ for those in flood affected areas, using the ATO’s flood affected postcode list (refer to the above noted website).

Financial reporting

For businesses with an obligation to lodge either a full financial report or a half year interim financial report for the year or period ended 31 December 2010, the impact of the floods on your business may prevent you from meeting the original lodgement timeframes.