2020/21 Federal Budget
3. Changes affecting companies 3.1 Temporary loss carry back for eligible companies The Government has announced that it will introduce measures to allow companies with a turnover of less than $5 billion to carry back losses from the 2020, 2021 or 2022 income years to offset previously taxed profits made in or after the 2019 income year. This will allow such companies to generate a refundable tax offset in the year in which the loss is made. The tax refund is limited by requiring that the amount carried back is not more than the earlier taxed profits and that the …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.4 Uncapped immediate write-off for depreciable assets The Government has announced it will introduce the following changes to the Capital Allowance provisions: (a) Businesses with an aggregated annual turnover of less than $5 billion will be able to claim an immediate deduction (what the Budget terms as ‘full expensing’) for the full (uncapped) cost of an eligible depreciable asset, in the year the asset is first used or is installed ready for use, where the following requirements are satisfied: The asset was acquired from 7:30pm AEDT on 6 October 2020 (i.e., Budget night). The …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.3 Tax-free business support grants The Government has announced that the Victorian Government’s Business Support Grants for small and medium businesses, as announced on 13 September 2020, are non-assessable, nonexempt income for tax purposes. The Government may extend this arrangement to similar future grants from all States and Territories on an application basis. Eligibility for this treatment will be limited to grants announced on or after 13 September 2020 and for payments made between 13 September 2020 and 30 June 2021 …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.2 JobMaker Hiring Credit 2.2.2 Who is an eligible employer? An employer is able to access the JobMaker Hiring Credit if the employer: has an ABN; is up to date with tax lodgement obligations; is registered for Pay As You Go withholding; is reporting through Single Touch Payroll; is claiming in respect of an ‘eligible employee’; has kept adequate records of the paid hours worked by the employee they are claiming the hiring credit in respect of; and is able to demonstrate that the credit is claimed in respect of an additional job that …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.2 JobMaker Hiring Credit 2.2.1 Who is an eligible employee? Employees may be employed on a permanent, casual or fixed term basis. To be an ‘eligible employee’, the employee must: be aged (i.e., at the time their employment started) either: 16 to 29 years old, to attract the payment of $200 per week; or 0 to 35 years old to attract the payment of $100 per week; have worked at least 20 paid hours per week on average for the full weeks they were employed over the reporting period; have commenced their employment during …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.2 JobMaker Hiring Credit The Government will introduce a JobMaker Hiring Credit to incentivise businesses to take on additional young job seekers. From 7 October 2020, eligible employers will be able to claim $200 a week for each additional eligible employee they hire aged 16 to 29 years old and $100 a week for each additional eligible employee aged 30 to 35 years old. New jobs created until 6 October 2021 will attract the credit for up to 12 months from the date the new position is created. The JobMaker Hiring Credit will be …
2020/21 Federal Budget
2. Changes affecting business tax payers 2.1 Expanding access to Small Business Tax Concessions The Government has announced that it will expand the concessions available to Medium Sized Entities to provide access to up to ten Small Business Concessions. For this purpose, a Medium Sized Entity is an entity with an aggregated annual turnover of at least $10 million and (less than) $50 million. The expanded concessions will apply in three phases, as follows: From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure. From 1 April 2021, eligible businesses will …
2020/21 Federal Budget
1. Personal income tax changes 1.2 Changes to the Low Income Tax Offset (‘LITO’) The Government announced that it will also bring forward the changes that were proposed to the LITO from 1 July 2022, so that they will now apply from 1 July 2020 (i.e., from the 2021 income year), as follows: The maximum LITO will be increased from $445 to $700. The increased (maximum) LITO will be reduced at a rate of 5 cents per dollar, for taxable incomes between $37,500 and $45,000. The LITO will be reduced at a rate of 5 cents per dollar, for taxable …
2020/21 Federal Budget
1. Personal income tax changes 1.1 Changes to personal income tax rates The Government has announced that it will bring forward changes to the personal income tax rates that were due to apply from 1 July 2022, so that these changes now apply from 1 July 2020 (i.e., from the 2021 income year). These changes involve: increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000; and increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000. These changes are illustrated in the following table (which excludes the Medicare Levy). …
