It’s been a difficult year for everyone – businesses included – and we’ve had to navigate a myriad of difficult economic, health and social upheavals.
In response, with the release of the new Federal Budget, the Government announced a suite of business incentives in the hope of making it easier for businesses to invest, create jobs and quickly respond to challenges and opportunities.
There are a number of business stimulus incentives available and we’ve done the hard work for you and summarised all the opportunities for plant and equipment purchases for small, medium and large organisations.
This includes all immediate write offs, the backing business policy, business pools and the very beneficial full expensing policy announced in this year’s budget.
The tables below show qualifying dates and thresholds to make it easy for you to quickly cross check what is available for your business.
Business incentives program
The Federal Government is providing a temporary tax incentive to support new investment and increase business cash flow, which will be available to around 3.5 million businesses (approximately 99% of businesses in Australia). The incentive is intended to encourage around 200 billion worth of investment – including 80% of investment in depreciable assets by non-mining businesses.
Businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed, from 6 October 2020 until 30 June 2022. The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.
The Government is also allowing companies with turnover up to $5 billion to offset losses against previous profits on which tax has been paid, to generate a refund. Loss carry-back will be available to around 1 million companies that employ up to 8.8 million workers. Losses incurred up to 2021 22 can be carried back against profits made in or after 2018 19. Eligible companies may elect to receive a tax refund when they lodge their 2020 21 and 2021 22 tax returns.
Extension of small business tax concessions
In more good news, tax concessions have been extended to businesses with a turnover up to $50 million (up from $10 million previously).
The incentives allow access to a number of small business tax concessions, provide tax relief and reduce red tape for businesses.
The different concessions available include:
Immediate deductions for eligible start-ups and eligible prepaid expenditure.
Businesses are now exempt from paying the 47% FBT on retraining provided to employees who have been made redundant, or would soon be made redundant, so they can be given a new role in the business.
From 1 April 2021, exemptions from FBT on car parking and phones/laptops for employees.
From 1 July 2021, simplified stock trading rules, remit pay as you go instalments based on GDP adjusted notional tax, settle excise duty and excise-equivalent customs duty monthly on eligible goods, a two-year amendment period for income tax assessments for income years starting from 1 July 2021 (down from four years).
If you’d like to find out more about what incentives are available for your business, please reach out.
We’d love to talk you through all your options and help make the most of these incentives for your business.