The federal budget was announced on 11 May 2021 and provided a range of measures to help small business owners and businesses recover from the impact of COVID-19 and boost business confidence. Here is an overview of the announcements that are likely to have a positive impact on small businesses.
· Corporate tax rate for SME’s will drop from 27.5% to25% from 1 July 2021.
· The government has also extended its temporary full expensing of depreciable assets for business, with turnover or income below $5 billion. The measure introduced in last year’s budget will be extended for another 12 months until 23 June 2023.
· The temporary loss carry-back scheme will be extended by one year, allowing eligible companies to carry-back tax losses from the 2022-23 income year to offset previously taxed profits as far back as 2018-19 income year. Companies with aggregated annual turnover of up to $5 billion can apply tax losses incurred during previous years to offset tax paid in 2018-19 or later years.
· Small craft brewers and distillers will benefit from an increase in the cap for claims on the Excise Refund Scheme from $100,000 to $350,000 from 1 July 2021.
· The Government announced increased rights for small businesses to pause the collection of disputed debts. Small businesses can now have the confidence and peace of mind that they will be able to pause ATO debt recovery actions until their case is decided by the AAT. For more detail visit https://budget.gov.au/2021-22/content/factsheets/download/factsheet_tax.pdf
Instant asset write-off to be extended and limit lifted
- One of the best tax breaks for many businesses is the instant asset write-off, which offers a means to acquire capital assets and obtain an immediate tax deduction. Examples of ‘assets’ put forward by the government include coffee machines, forklifts, tractors, freezers and labellers.
- The scheme was due to expire on June 30, 2022, but Treasurer Josh Frydenberg announced in the Federal Budget thatit will now continue until June 30, 2023. You can read more about it and how you can use B2Bpay to take advantage here.
- There is also now no cap on the scheme, which originally has a cap of $150,000 for purchase.
Financial incentives for employing staff
- The government has also extended its temporary full expensing of depreciable assets for business, with turnover or income below $5 billion. The measure introduced in last year’s budget will be extended for another 12 months until 23 June 2023.
- $1.2 billion towards the Boosting Apprenticeship Commencements Wage Subsidy program, which will cover 50 per cent of wages, up to $7,000 per quarter for 12 months, paid to an eligible apprentice or trainee between 5 October 2020 and 30 September 2021.
- The $450 earnings threshold has been scrapped, removing the need for workers to make more than $450 in a month for their employer to pay the superannuation guarantee. https://budget.gov.au/2021-22/content/overview.htm https://budget.gov.au/2021-22/content/bp1/download/bp1_bs1.pdf
- Removal of current exclusion that applies to deductions for the first $250 spent on education courses, which will give more business owners (and their employees) a reason to learn new skills.
- Almost $130 million to encourage entrepreneurship through the New Enterprise Incentive Scheme (NEIS) and Entrepreneurship Facilitators Program support people who want to start, run and grow their own business.
Visit the budget website https://budget.gov.au for more details on the 2020-21 Federal Budget.
Boost your small business even further by using B2Bpay
Taking advantage of the simplicity of B2Bpay can help your business to:-
- Earn full credit card reward points on any business payment including purchases and also be rewarded with Qantas Points
- Improve cash flow by making use of the 55 days interest free period by using card
- Make seamless, hassle-free payments, freeing up admin time for you and your staff
- Set payments as one-off, automatic or future dated
- Keep accurate records on all purchases and payments, making tax time easier
- Earn credit card reward points and bonus Qantas Points with every payment, even utility bills, rates and ATO payments
Source: Budget 2021-22 Securing Australia’s Recovery https://budget.gov.au/
This content above was put together for information purposes only. The Content does not constitute tax and/or legal advice and should not be relied upon as such. You should seek tax, legal or other professional advice before acting or relying on any content.