Reforms for Businesses
To stimulate the economy, the biggest changes are for Businesses this year. Below is a summary of what we felt was the most relevant sections for our small businesses. Contact our office if you would like to discuss any of the upcoming changes and how they may affect you and your business.
- Instant Asset Write off Extension
- Eligible Businesses that purchase assets under the existing $150,000 instant asset write off scheme, will have an additional 6 months to have those assets installed and ready for use.
- Temporary Full Expensing of Depreciation Assets
- Eligible Small Businesses will be able to IMMEDIATELY deduct any eligible depreciating asset purchase in full on purchase. This applies to any asset purchased from 7:30pm on 06th October 2020 until June 30, 2022.- Note this does not include Capital Works (e.g. Buildings)
- Loss Carry Back (Companies)
- Eligible Companies that have made a loss in 2020, 2021 or 2022 can elect to have the loss carried back to a previous profit year in the 2019 or later Financial year. This is designed to free up cash flow for small businesses. Tax Refunds will be limited to the relevant year taxable profits.
- Small Business Tax Concessions- Increase in Threshold
- The aggregated turnover threshold for small business has been increased to $50 million for access to tax concessions.
- JobMaker- Hiring Credit
- Eligible Employers can take on new employees and receive the following incentives for up to 12 months. (employee must satisfy criteria to be eligible
- $200 Credit per week for eligible employee between ages of 16 - 29
- $100 Credit per week for eligible employee between ages of 30 -35
- Applicable from 07th October 2020 - 06th October 2021.
- Credit is paid to the Employer in ARREARS from the ATO starting from 01 February 2021.
- Eligible Employee must have been on JobSeeker, Youth Allowance, or Parenting Payment for at least 1 month with the past 3 months prior to being hired.
- Eligible Employee must work on average 20 hours per week.
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Changes to the Individual Income Tax Rate
Individual Tax Rate cuts are being brought forward to the current financial year. (New tax tables will be introduced to accounting software from November).
The Lower income tax bracket of 19% has been increased from $37,000 - $45,000.
The Higher income tax bracket of 32.5% has been increased from $90,000 - $120,000.
This will result in extra money in your pocket of up to $2,745 for singles and up to $5,490 for working couples.
Changes are also being made to the Low Income Tax Offset.
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First Home Buyers - Deposit Scheme extended until June 30, 2021.
This will allow first home buyers to buy a new home with a deposit as little at 5%.
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