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TAX BREAKS FOR BUSINESS IN THE OCTOBER FEDERAL BUDGET
- Extension of instant asset write-off
- JobMaker Hiring Credit
- Loss carry-back provisions
- Research and development
JOBMAKER HIRING CREDIT PASSES THE PARLIAMENT
On 11.11.2020 the Federal Government passed legislation to establish the JobMaker Hiring Credit, giving businesses access to up to $200 per week for each eligible employee. The legislation is now awaiting assent.
The JobMaker Hiring Credit is a fixed amount of $200 per week for an eligible employee aged 16 to 29 years and $100 per week for an eligible employee aged 30 to 35 years paid quarterly in arrears by the Australian Taxation Office.
The scheme will operate for the period from 7.10.2020 to 6.10.2022.
To be eligible, the employee must have been receiving JobSeeker Payment, Youth Allowance (Other) or Parenting Payment for at least one of the previous three months, assessed on the date of employment.
Employees also need to have worked for a minimum of 20 hours per week of paid work to be eligible, averaged over a quarter and can only be eligible with one employer at a time.
The hiring credit is not available to an employer who does not increase their headcount and payroll.
INSOLVENCY REFORMS TO SUPPORT SMALL BUSINSS
On 12.11.2020 the Federal Government introduced legislation into the Parliament to progress the most significant changes to Australia’s insolvency framework in 30 years as part of their economic recovery plan to keep businesses in business and Australians in jobs.
By moving from a rigid one-size-fits-all “creditor in possession” model to a more flexible “debtor in possession” model, it will allow eligible small businesses to restructure their existing debts while remaining in control of their business.
For those businesses that are unfortunately unable to survive the economic impacts of the Coronavirus outbreak, a new simplified liquidation pathway will be introduced for small businesses to allow faster and lower-cost liquidation.
Following the passage of legislation through the Parliament, these new insolvency processes will be available for small businesses from 1.1.2021.Read Newsletter
JOBMAKER PLAN – BRINGING FORWARD THE PERSONAL INCOME TAX PLAN
The Government has announced that stage 2 of its Personal Income Tax Plan will be brought forward and apply for the 2020-21 income year.
The low-and middle-income tax offset will continue to be available for the 2020–21 income year but will not apply for the 2021–22 income year and later years.
If enacted the measure will:
- Increase the low-income tax offset (LITO) from $445 to $700 and adjust the phase out rules
- Increase the top threshold of the 19% personal income tax bracket from $37,000 to $45,000, and
- Increase the top threshold of the 32.5% personal income tax bracket from $90,000 to $120,000
ATO UPDATE: JOBKEEPER 80-HOUR THRESHOLD FOR EMPLOYEES
ATO recently updated guidance on the 80-hour test or higher rate of JobKeeper payment.
An employee will satisfy the 80-hour threshold, if in their 28-day reference period, the total of the following is 80 hours or more:
- Actual hours they worked
- Hours they were on paid leave
- Hours they were paid for absence on a public holiday
According to the ATO, if an eligible employee satisfies the 80-hour threshold, the employer can claim the tier 1 (higher) payment rate for them.
If they do not meet the 80-hour threshold, the employer can only claim the tier 2 (lower) payment rate for them.
APRA CLARIFIES ‘WORK TEST’FOR SUPERANNUATION CONTRIBTUIONS
In October, the Australian Prudential Regulation Authority (APRA) confirmed individuals whose incomes are subsidised by the JobKeeper scheme will be considered by registrable superannuation entities (RSE) to be ‘gainfully employed’ for the purpose of the ‘work test’, and can therefore make personal superannuation contributions.
According to APRA, RSE licensees need not distinguish between individual members who are working reduced hours or those who have been stood down, and can assume that all members whose incomes are subsided by the JobKeeper scheme satisfy the ‘work test’ for the purpose of voluntary superannuation contributions.Read Newsletter
LEGISLATION PASSES THROUGH THE SENATE TO ALLOW AUSTRALIANS TO CHOOSE THEIR SUPERANNUATION FUND
Legislation giving Australians the power to choose their own superannuation fund, instead of being forced into a fund because of enterprise bargaining agreements passed the Senate on 25.8.2020.
The Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 will allow around 800,000 Australians to make choices about where their hard-earned retirement savings are invested, representing around 40 per cent of all employees covered by a current enterprise agreement.
These changes also build on the Government’s earlier reforms which protect superannuation accounts from being eroded through the capping of fees on low balance accounts and requiring insurance to be provided on an opt-in basis for new members under 25 years of age.
CHANGING BUSINESS STRUCTURES
Many small businesses change their business structure from a sole trader to more complex company or trust structures, especially when the environment changes. This can lead to errors.
Some of the common errors identified by the ATO include:
- Reporting income for the wrong entity
- Claiming expenses incurred by another entity as business expenses
- Personal use of business bank accounts
EXTENSION OF TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES
The Federal Government will continue its regulatory relief for businesses that have been impacted by the Coronavirus crisis by extending temporary insolvency and bankruptcy protections until 31 December 2020.
Regulations have been made to extend the temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The changes also extend the temporary relief for directors from any personal liability for trading while insolvent.
SMSF REGULATIONS TO ALLOW SIX MEMBERS UNDER NEW LEGISLATION
SMSFs are often used by families as a vehicle for controlling their own superannuation savings and investment strategies. For larger families, the only real option is to create two SMSFs – in so doing incurring additional costs.
In September, the Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill 2020 was introduced.
This partially implements the measure to allow an increase in the maximum number of allowable members in self-managed superannuation funds and small APRA funds from four to six.Read Newsletter
NEW RULES FOR THE SHARING AND GIG ECONOMY INTERNATIONAL IMPLICATIONS
In July 2020, the OECD released the “Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy”
- This provides a framework to be enacted in relevant individual tax jurisdictions allowing collection of information from digital platforms on the sellers of accommodation (such as Airbnb), transport (Uber), food delivery (Uber Eats) and other task- or time-specific services
- This automatic exchange of information among participating countries will allow the information to find its way to the tax administrations of the country of residence of the seller of the services, as well as of the country where rental accommodation is situated if different, and will be used to check whether the income has shown up in a local tax return
- The expected implementation time is 2-5 years
ATO REMINDS BUSINESSES PAYING CONTRACTORS TO CHECK IF THEY NEED TO LODGE TAXABLE PAYMENTS ANNUAL REPORT
The ATO has reminded businesses that pay contractors for certain services that they needed to lodge a Taxable Payments Annual Report (TPAR) with the ATO by 28 August 2020.
This is the first year that businesses that pay contractors to provide road freight, information technology, security, investigation, or surveillance services may need to lodge a TPAR with the ATO.
This is in addition to those businesses providing building and construction, cleaning, or courier services that are already required to report.
INCREASING THE INSTANT ASSET WRITE OFF
From 12 March 2020, the Government increased the instant asset write off (IAWO) threshold from $30,000 to $150,000 and expanded access to include all businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
On 9 June 2020, the Government announced it would extend the $150,000 instant asset write-off by six months until 31 December 2020 to give eligible businesses additional time to invest. This extension has been legislated.
The higher IAWO threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.Read Newsletter
RENTAL PROPERTIES AND TAX TIME
- Residential property owners cannot claim any deductions for costs incurred in travelling to residential rental property unless they are in the rare situation of being in the business of letting rental properties
- Taxpayers that take out a loan to purchase a rental property can claim interest (or a portion of the interest) as a tax deduction. However, directing some of the loan money to personal use, such as paying for living expenses, buying a boat, or going on a holiday is not deductible use
- Repairs or maintenance to restore something that is broken, damaged or deteriorating in a property you already rent out are deductible immediately. Improvements or renovations are categorised as capital works and are deductible over a number of years
- If a property is not genuinely available for rent, you need to limit your deductions to the days when it is
PAYG AND GST INSTALMENTS – NO GDP ADJUSTMENT
Every year the ATO adjusts GST and pay as you go (PAYG) instalment amounts using a formula known as the gross domestic product (GDP) adjustment. This is based on data published the Australian Bureau of Statistics.
On 19 June 2020, royal assent was received to suspend indexation for GST and PAYG instalments for the 2020–21 income year in response to COVID-19. This means from 1 July 2020, there will be no GDP adjustment used to work out quarterly GST and PAYG instalment amounts for the 2020-21 income year.
PAYG instalment variations for the 2019–20 income year do not carry over to the new income year. You will need to vary your instalments again for the 2020–21 income year if your instalment amounts will result in them paying too much tax for the year.
ATO TO REVIEW HARDSHIP SUPER PAYMENTS
- The ATO intends to take action against people who exploit the federal government’s COVID-19 financial hardship early release super scheme for the purpose of gaining a tax advantage. This is known as the “re-contribution strategy”.
- The ATO collects real-time data on how much workers are paid, with employers required to report income to the ATO each time an employee is paid under the Single Touch Payroll system which include information such as salaries and wages, pay-as-you-go tax withholding and superannuation
- While superannuation withdraws under the scheme are tax free. However, in the event an applicant is later found to be ineligible, the cash will also be treated as assessable income on which tax will have to be paid
RIDE SOURCING NOW CONSIDERED ‘TAXI TRAVEL’
The ATO has confirmed that for fringe benefits tax (FBT purposes, the taxi travel exemption has been extended to include ride-sourcing vehicles. The change is because of amendments to the Fringe Benefits Tax Assessment Act 1986, which are now law.
The change means any benefit arising from travel by an employee using a registered taxi or ride-sourcing provider (other than in a limousine) is now exempt from FBT subject to meeting certain criteria.
Because the changes apply from 1 April 2019, the 2020 FBT return instructions have been updated to help employers who may need to amend their FBT return.Read Newsletter
JOBKEEPER AND JOBSEEKER
Taxpayers who have received JobKeeper payments from their employer, do not need to do anything different.
The JobKeeper payments will be included as salary wages and/or allowances.
Sole traders who have received JobKeeper payments on behalf of their business will need to include the payments as assessable income for the business.
The ATO will load the JobSeeker payment information into the individuals tax return at the Government Payments and Allowances section, once it is ready.
WORKING FROM HOME EXPENSES
The ATO has announced a temporary ‘short-cut method’ of 80 cents per hour that applies from 1 March 2020 to 30 June 2020.
This covers all deductible expenses and can be used by multiple people working from home in the same house.
People claiming the shortcut method should include the amount at the ‘other work-related expense’ section of the tax return and include ‘COVID-hourly rate’ as the description.
Taxpayers can still choose to use on of the other existing methods to calculate their expenses for working from home if they prefer.
Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 may be able to claim a deduction for:
- Face Masks
- Anti-Bacterial Spray
INSTANT ASSET WRITE-OFF FOR ELIGIBLE BUSINESSES
On 9 June 2020, the government announced it will extend the $150,000 instant asset write-off until 31 December 2020.
Eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.
Instant asset write-off can be used for:
- Multiple assets if the cost of each individual asset is less than the relevant threshold
- New and second-hand assets
A RETURN TO THE CHILD CARE SUBSIDY
On 8 June 2020, the Federal Government announced it will resume the Child Care Subsidy (CCS) to support families to access affordable childcare.
From 13 July, the CS will return, along with new transition measures to support the sector and parents as they move back to the subsidy.
JobKeeper will cease from 20 July for employees of a CCS approved service and for sole traders operating a childcare services.
The Government will pay approximately $2 billion in CCS this quarter to eligible families.
The CCS is means-tested to ensure that those who earn the lease receive the highest level of subsidy.Read Newsletter
EOFY – Year End Tax Planning Tips 2019-2020
Below are some tax planning tips that are covered in more detail in our newsletter:
- Check eligibility for small business tax regime
- Maximise depreciation deductions
- Review salary sacrifice arrangements
- Make trust resolutions by 30 June
- Seeking professional advice when starting a business
- Write-off bad debts
Ongoing Tax Planning Issues
Our newsletter covers other tax strategies that should be considered such as:
- Salary Sacrifice Bonus into Superannuation
- Superannuation – government co-contribution
- Eligibility for super concessional contributions
- Transition to retirement income streams
- Medicare Levy Surcharge and Private Health Insurance Rebate
ATO Recovery Data Matching
In terms of focus areas for compliance activities, the ATO continues to closely monitor:
- Claims for work-related expenses that are unusually high close to others across comparable industries and occupations
- Excessive rental properties expenses
- Non-commercial rental income received for holiday homes
- Interest deductions claimed for the private proportions of loans
- People who have registered for GST but are not actively carrying on a business
COVID-19 ATO Questions & Answers
The ATO has published some Q & A regarding COVID-19 and the below topics:
- Work-Related Car Expenses
- Residential Rental Properties
- Short-Term Rental Properties
SUPERANUATION GUARANTEE AMNESTY
On 6 March 2020 the government introduced a superannuation guarantee (SG) amnesty (the amnesty).
The amnesty allows employers to disclose and pay previously unpaid super guarantee charge (SGC), including nominal interest, that they owe their employees, for quarter(s) starting from 1 July 1992 to 31 March 2018, without incurring the administration component ($20 per employee per quarter) or Part 7 penalty.
In addition, payments of SGC made to the ATO after 24 May 2018 and before 11:59 PM 7 September 2020 will be tax deductible.
Employers who have already disclosed unpaid SGC to the ATO between 24 May 2018 and 6 March 2020 don’t need to apply or lodge again.
Employers who come forward from 6 March 2020 need to apply for the amnesty.
The ATO will continue to conduct reviews and audits to identify employers not paying their employees SG. If the ATO identifies these employers before they come forward, they will not be eligible for the benefits of the amnesty. They will also be required to pay:
- SG shortfall
- nominal interest(10%)
- administration component ($20per employee per quarter)
- Part7 penalty (up to 200% of the SGC).
In addition, payments of the SGC won’t be tax deductible.
Paying super is an important part of being an employer. If you’re not eligible for the amnesty, or you have unpaid super for quarters that are not eligible, you must still lodge an SGC statement.
The law does not allow the ATO to vary the due date for lodgement of an amnesty application.
SMALL BUSINESS SUPERANNUATION CLEARING HOUSE
The Small Business Superannuation Clearing House (SBSCH) is a free service you can use to make super guarantee (SG) contributions. Eligible businesses are those with 19 or fewer employees or an annual aggregated turnover of less than $10 million.
Your business can pay your SG contributions as a single electronic payment to the SBSCH. If you make super payments by EFT or BPAY using your credit card account, you may be charged a fee by your financial institution.
The SBSCH will then distribute the payments to each employee’s super fund. Your SG obligations are met as soon as your payment and instructions are accepted by the SBSCH. The SBSCH is SuperStream compliant.
In this event you are not already using this service refer to www.ato.gov.au/Business/Super-for-employers/Paying-super-contributions/Small-Business-Superannuation-Clearing-House/.
If you still require assistance contact this office.
WORKING FROM HOME TAX DEDUCTIONS
The ATO has announced a special compliance guideline for employees and business owners claiming deductions for additional costs incurred while working from home due to COVID-19. The new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.
Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate. The requirement to have a dedicated work from home area has also been removed.
The running costs that are typically incurred when working from home include:
- lighting, heating, cooling and cleaning costs, electricity for electronic items used for work (to the extent the cost exceeds the amount normally spent if not working from home),
- the decline in value and repair of home office items such as furniture and furnishings in the area used for work,
- phone and internet expenses,
- computer consumables, stationery, printer cartridges and
- the decline in value of a computer, laptop or similar device, and printers
So, for example, if 25 hours of a working week is conducted at home for the 12 weeks up to 30 June 2020, $240 can be claimed as a deduction (25 x 12 x 0.80).
There is no change to the rules regarding deductions for occupancy costs such as rent, mortgage payments and rates. These are generally only deductible if a taxpayer has a place of business at home (e.g. a doctor’s surgery) or for certain itinerant employees not provided with an employer workplace.
As always the taxpayer must have incurred the expense, not have been reimbursed, have incurred the expense in gaining or producing assessable income and have evidence of the expense.
WORKING FROM HOME BEFORE 1 MARCH 2020
Claims for working from home expenses prior to 1 March 2020 cannot be calculated using the shortcut method and must use the pre-existing working from home approach and requirements.
For 2019/2020, taxpayers can calculate a deduction for working from home running costs by using a fixed rate of 52c per working hour, but only to cover those expenses listed at 1 and 2 above.
For other types of working from home costs (3-5 listed above) the taxpayer has to keep records of the actual costs incurred and work out the work-related portion. This method is also available for 1 and 2 costs as well, instead of 52c per hour if a taxpayer prefers and has the supporting records.
WORKING FROM HOME CLAIMS FOR 1 MARCH TO 30 JUNE
There are three ways that you can choose to calculate your additional running expenses for the 1 March – 30 June period:
- Claim a rate of 80 cents per work hour for all additional running expenses
- Claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device
- Claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis
The ATO is also reminding people that the three golden rules for deductions still apply. Taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.
Which method should you use?
The 52c and 80c per hour methods are simplified methods for calculating your tax deduction. However, the actual methods may give you a higher tax deduction, if you’re prepared to keep the necessary records.
The necessary records would include receipts and bills for the relevant expenses and a four-week representative diary of your asset and service usage. It would make sense to keep a four-week representative diary for the period before 1 March 2020 and then another for the period up to 30 June 2020.
For expenses like electricity, you will need a basis of apportionment such as floor space used for work purposes relative to total work space in the house.
Come tax time, your tax agent can help you navigate the different methods and calculate the best tax deduction for your circumstances.
‘ROBODEBT’ CLASS ACTION
A Class Action has begun against the Commonwealth of Australian regarding overpayment notices issued to hundreds of thousands of Australians affected by the government’s robodebt scheme. Those that are considered to be part of the class action will receive notices from Centrelink about the class action under orders from the federal court.
You maybe a member of the class action if you:
- At any time after 1 July 2010 received from Centrelink on one or more payments of:
- Newstart Allowance
- Youth Allowance
- Disability Support Pension
- Austudy Allowance
- Age Pension
- Carer Payment
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow A Allowance
- Widow B Allowance
- In respect of correspondence from the Commonwealth Government at any time after 1 July 2015:
- Received notification from them that after reviewing information obtained from Centrelink and from the Australian Taxation Office (ATO) requested you to check, confirm or update your employment information during the time you received the payment, and
- Then was issued with notification that you had received an overpayment of one or more centrelink payments, and
- Received a request or demand for repayment of any overpayment debt
- Have paid and had paid on their behalf the debt and/or
- Have not been informed by the Commonwealth Government that no recovery action will be pursued.
Robodebt is a part-automated process in which recipients of government benefits are sent letters asserting that they owe the government money because they have been overpaid.
If you have received one of these letters you are automatically part of the class action as a class member and do not have to do anything.
The only action that is required is whether you want to opt out from the class action. You would consider this if you do believe that your overpayment was correct or if you have had it waived already by the Commonwealth.
Any questions regarding this class action should be direct to:
1300 001 356
JOBKEEPER ALTERNATIVE TESTS & KEY DATES
Generally businesses will use the basic test, which is based on GST turnover. An alternative test has been made available for some cases where the normal comparison period is not appropriate. The following are the eligible circumstances:
- Commenced business after the relevant comparison period but not on or after 1 March 2020 (the business did not exist in March 2019)
- Acquired or disposed or part of the business after the relevant comparison period (the business is not the same business as it was in March 2019)
- Undertook a restructure after the relevant comparison period
- Business had a substantial increase in turnover
- Affected by drought or natural disaster
- Has irregular turnover (excluding cyclical or regular seasonal variance in their turnover)
- Is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover
You only need to satisfy the fall in turnover test once – you don’t need to test your turnover in the following months or quarters.
However, there are ongoing monthly turnover reporting requirements.
In order to receive the Jobkeeper payment for the period 30 March 2020 to 26 April 2020 you MUST finalise your application before 31 May 2020.
Going forward the key dates for Jobkeeper are as follows:
|JobKeeper Fortnight||Period relating to each JobKeeper Fortnight||Employees are paid on or before ^|
|1||30 March – 12 April||8 May*|
|2||13 April – 26 April||8 May*|
|3||27 April – 10 May||10 May*|
|4||11 May – 24 May||24 May*|
|5||25 May – 7 June||7 June|
|6||8 June – 21 June||21 June|
|7||22 June – 5 July||5 July|
|8||6 July – 19 July||19 July|
|9||20 July – 2 August||2 August|
|10||3 August – 16 August||16 August|
|11||17 August – 30 August||30 August|
|12||31 August – 13 September||13 September|
|13||14 September – 27 September||27 September|
* You have until 31 May to enrol for JobKeeper if you intend to claim for wages paid for JobKeeper fortnights in April and May.
^ When paying eligible employees, you do not need to adjust your pay cycle through your existing payroll solution.
If you usually pay your employees less frequently than fortnightly, the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a monthly pay cycle, your employees must have received the monthly equivalent of $1,500 per fortnight.
SA STATE GOVERNMENT $10,000 GRANT – LAST CHANCE
Small businesses and not-for-profit entities that employ South Australians who have been highly impacted by the COVID-19 pandemic may be eligible to receive a $10,000 grant to support the operation of their business.
You must meet the edibility criteria which was published in our previous newsletter which you can find here:
The applications for the Grant will closing on 31ST MAY 2020
If you are currently receiving a Centrelink benefit that is being assess under the income test method, you will see an increase in your payments.
That is because as of 1 May 2020 the deeming rates have been reduced from:
- 1% to 0.25% and
- 3% to 2.25%
Deeming is a set of rules used to work out the income created from your financial assets. These include investment properties, bank balances and superannuation assets.
ILLEGAL EARLY RELEASE OF SUPER
Illegal schemes will cost you a lot more than the super you withdraw. There are server fees and penalties. Promoters of schemes encouraging the illegal early release of super may face prosecution and civil or criminal penalties
Withdrawing your super early unless you meet a condition of release is illegal
Generally, can only withdraw your super when you reach retirement
You can legally withdraw your super early when you meet specific medical conditions or are experiencing severe financial hardships
FRINGE BENEFITS TAX EXEMPTION WILL NOW INCLUDE RIDE SHARING SERVICES
Legislative amendments have been introduced into Federal Parliament to the existing fringe benefits tax (FBT) exemption for certain taxi travel to include a broader range of transport services including ride sharing services
Changes will apply to the 2019 – 2020 FBT year onward
If you don’t have the documentary proof (or access to) then you can’t make a claim
Can only claim a tax deduction for a donation of cash of $2 or more made to an organisation that is endorsed by the ATO as a Deductible Gift Recipient (DGR)
Australian Business Number Register allows potential donors to check whether an organisation has the DGR status
If you receive a benefit or consideration for the expenditure, then you cannot claim a tax deduction. An example of this could be raffle tickets or outlay for a social function such as a charity ball
IMPORTANT CHECKS FOR EMPLOYERS WHEN HIRING A CONTRACTOR
Before hiring a contractor review the following case scenarios:
- Ability to subcontract or delegate
- Basis of payment
- Equipment, tools and other assets
- Commercial risks
- Control over the work
NO TAX ON BUSHFIRE DISASTER PAYMENTS
$2 billion recovery fund
8th January, the Morrison government announced that Australians will not pay tax on federal disaster assistance they receive (Effective as of 4th February 2020)
SIMPLIFIED DEPRECIATION RULES – INSTANT ASSET WRITE-OFF
Instant Asset write off in its 4th year of operation
From 2 April 2019, the instant asset write-off has been expanded to include business with a turnover from $10 million to less than $50 million
As of 1st July 2020, the threshold for instant asset write-off will revert to $1,000
INCREASED SMALL BUSINESS INCOME TAX OFFSET
To increase to 13% in 2020-21
To increase to 16% from the 2021-22 income year
Capped at $1,000
LOWER COMPANY TAX RATE CHANGES
For the 2018-2019 income year, company base rate to be 27.5% if they are a base rate entity
The below conditions must be met for a company to be considered a base rate entity
- Turnover less than the threshold – $50 million for the 2018-2019 income year
- 80% or less of their assessable income is base rate entity passive income