The federal budget delivered on 6 October 2020 will help put SMEs back where they belong. This is at the forefront of economic recovery as we continue to stand firm in the face of the COVID-19 pandemic. Here are the details:
Instant asset write-off (IAWO) extended
The existing concession, to write off 100% of new asset purchases as an expense in the current tax year, has been extended. It has been partly replaced by ‘temporary full expensing’ to 30 June 2022.
Assets purchased prior to 6 October and must be installed and ready for use by 30 June 2021 to be eligible for a full write-off in the FY 2021. Each individual asset must not exceed $150,000 in price.
New assets purchased after the budget announcement, with no upper limit on cost, can be fully written off for tax purchases in the year they were installed and ready for use, until 30th June 2022. This includes the cost of any improvements to existing assets.
Second-hand assets can be fully written off until June 2022 if your annual turnover is under $50 million. For a full list of the changes made to the IAWO, click here.
Employer-provided retraining (as opposed to further training for a current role), previously subject to fringe benefits tax, will be exempt from the tax from 2 October 2020. This will help SMEs retain and/or retrain employees whose roles have become redundant as a result of COVID-19.
From 1 April 2021, on-site employee parking spaces previously subject to FBT, plus electronic devices provided to employees (e.g. phones and laptops), will be exempt from the tax for all businesses with an annual turnover below $50 million.
SMEs will fewer than 200 employees hiring a new or re-engages apprentice or trainee between 1 July 2020 and 31 March 2021 will qualify for a 50% wage subsidy. The subsidy is worth up to $7,000 per quarter per employee.
If you engage a new employee starting on or after 5 October 2020, the subsidy continues to 30 September 2021, and capped at $27,000.
This is an extension of the previous 50% subsidy scheme applicable only to businesses with fewer than 20 employees, in place from 1 January 2020 to 30 September 2020.
The Government is focused on getting young Australians into work. Employers will be given credit for each new job they create for 16 to 35 year-olds. The details are:
- $200 per week credit for 16-to-29-year-olds
- $100 per week credit for 30-to-35-year-olds
Employee eligibility is limited to working a minimum of 20 hours per week. These employees must have been receiving either of the below for at least one month in the three months before they were hired.
- Youth Allowance, or
- Parenting Payment
It’s all good news, but a bit complicated
Contact your Finance Broker if you’re struggling to get your head around the budget details. We’re here to help you take advantage of concessions and rebates on asset purchases and new employees. Give us a call today on (08) 9321 2120 or send us an email via firstname.lastname@example.org