Collins Hume Blog

Can this dollar help charities to buck the trend?

The Australian Mint's Donation Dollar is designed to be donated to a charity of your choice.

Ever since the COVID-19 crisis, donations have been trending down this year.

That's why, in a global first, the Australian Mint has started circulating the green and gold "Donation Dollar". There's one coin being minted for every Australian. That's 25 million in total. The coin is different to any other dollar. It is not a collectable. It's a bold initiative aimed at prompting donations to charities who are struggling to maintain the great work they do in the community.

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Has COVID-19 devalued your business?

If you are selling your business, merging, acquiring or inviting in new investors, you need to understand the value of your business. 

But, to what degree does the pandemic impact on value? Should you discount or hold firm to pre COVID-19 performance on the basis that 'we're going to come out of it eventually'?

Fair market value is the price that would be negotiated in an open market between a knowledgeable, willing but not too anxious buyer and a knowledgeable, willing but not too anxious seller dealing at arm's length within a reasonable time frame. Value and price may not be the same thing. The price you are offered (or offer), will often depend on the anxiousness of the parties. For example, a seller that does not need to sell where the business being sold adds synergy value to the purchaser, may look to obtain a premium on value. And, even where a quick sale is required it may not be discounted if the liquidated asset value of the business remains high (i.e., the assets of the business are worth more broken up and sold off than as a whole).

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My business received a grant from the State Government...

Do I pay tax on it?

Short answer; probably.

Income tax
Grants are likely to be taxable unless they are specifically excluded from tax.

If the grant relates to your continuing business activities, then it is likely to be included in assessable income for income tax purposes. The position can be different in cases where the payment is made so that the entity can commence a new business or cease carrying on a business.

GST
Government grants are not generally subject to GST unless the grant is for a supply of something. The ATO has indicated that the cashflow boost and JobKeeper payments are not subject to GST, this seems to be on the basis that they are not consideration for a supply.

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The COVID-19 pandemic has implications well beyond the economy

It has changed how business operates and how consumers act. 

While comparisons are made to the 2008 Global Financial Crisis and the recessions of the 1980s and 1990s, the reality is, we have no case study. There is no rule book for the post pandemic road to recovery as this is not an economic event. The pandemic pulls the economy up short curtailing both supply and demand; businesses are not operating at capacity and fewer people are working. 

The Federal Budget is released on 6 October and we're expecting to see the Government invest heavily in job creating projects. Many of these will be focussed on infrastructure. Each of these projects will have a flow through effect to the broader economy. We'll bring you our insights the day after the budget and you should loom to see if there are opportunities your business can capture.

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Help to rebuild your business

Below is a range of financial support available to help NSW businesses survive bushfire, COVID-19 or drought.

If you need help assessing if you're eligible for one of these grants, or filling in an application, please contact the team at Collins Hume on 02 6686 3000.

Supporting recovery at work during COVID-19
The NSW Government's State Insurance Regulatory Authority offers financial assistance to employers who help people injured at work, or on the roads, get back to work during COVID-19.

These programs are designed to benefit both employers and employees. There are a range of financial incentives available including 'Support4work' a $4,000 grant to eligible small businesses that support their injured employees recovery at work. Read more…