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). …
CONCESSIONS TO REDUCE YOUR TAX BILL
Check if you’re eligible for any of these concessions in your tax return: Small business income tax offset. If you run a business with a turnover less than $5 million as a sole trader, partnership or trust, you can reduce your tax bill by up to $1,000. This is different from the low and middle income tax offset, which you may also be eligible for. Simply report your net small business income in your individual tax return. We’ll then work out the offset amount you’re eligible for and include it in your assessment. Lower company tax rate. If you operate …
$150,000 TAX INSTANT ASSET WRITE OFF CAR LIMIT
If your business is eligible to claim the instant asset write-off, you need to consider the car limit. The car limit is the maximum depreciation expense you can claim for a car. The car limit applies to the cost of some passenger vehicles. It applies to passenger vehicles designed to carry a load less than one tonne and fewer than nine passengers. It does not apply to motorcycles or similar vehicles, or to vehicles fitted out for use by people living with a disability. The car limit is: $57,581 for the 2019–20 income tax year $59,136 for the 2020–21 income tax …
8 STRATEGIES TO FOCUS ON OVER THE NEXT 6 MONTHS
Businesses have focused on urgent issues during COVID-19, such as the safety of their employees and customers, and changes in technology for their business to continue to operate productively. The critical next step is to maintain cash flow by managing revenue and expenses. History teaches us valuable lessons regarding the importance of managing cash during a downturn. Companies that successfully navigated prior crises pursued cash-flow strategies radically generous with customers and partners — and aggressive with revenue and expenses management. We’ve compiled a list of eight strategies for businesses to focus their efforts over the next few months – including …
