Here is a snapshot of the 2020/21 Federal Budget, and the proposed measures which we believe most impact Small Businesses.
I am putting this at the top of my list as it has been the clear replacement of the current JobKeeper incentive currently being run.
This is a great way to provide some additional support to your business, at a subsidised cost.The program includes 16-35 year olds, who work over 20 hours a week, employed after 7th October (today).There are two tiers:16-30 year old: receive $200/week subsidy30-35 year old: receive $100/week subsidy
This is a 12 month subsidy.
There are specific criteria to be met, so if you would like to discuss this further with us, please let me know.
2. Carried Back Losses
If you have incurred a business loss during the 2019, 2020 or 2021 financial year, then you can use them to offset profits made in the 2021 and 2022 tax returns.We are currently working through our files to determine which of our clients this applies to.
3. Reduction of Individual Income Tax Rates
This will impact all our clients who pay employees.Individual Income Tax Rates are to be reduced with an effective backdate of 1 July 2020.It isn’t clear yet if employers will need to reimburse their employees for the “overtax” having been withheld since 1 July 2020 or simply the new rates are to be introduced in the next scheduled payrun. We will keep you updated with how this turns out.
4. New apprenticeship and trainee incentives.
The Government has already introduced many apprenticeship incentives since the commencement of COVID-19. They are expanding this with further subsidies for new or recommencing apprenticeship and traineeships from 5th October 2020.Note, there is a limit of 100,000 new apprentices/traineeship.
Other Accounting Related Measures,
(which aren’t as big as the media are making them out to be):
1. Temporary full expensingThis has been a favourite for Government and media over the past few years. It means that you can claim 100% of a business asset purchase in the current financial year. Ordinarily, you can still claim 100% of the business expense, but it is apportioned over the life of the asset, and is accounted for as depreciation. So always call this a “bring forward” deduction. The Government have widened this measure to include improvements to existing assets.
2. Ability to immediately deduct certain start-up expenses and prepaid expenditure. Once again, this is simply a “bring forward” deduction.
There are many other budget announcements, however we have addressed the measures which we believe relate to you and your business. If there is any other budget measure which you would like to discuss, please reach out to one of our team members to discuss.
As always, we will keep you up to date with any evolving changes and how they may effect you and your business.