Tax offsets and asset write offs for small businesses in Budget 2020

With the Coronavirus forcing Australia into its first recession for 29 years, Josh Frydenberg has unveiled his plans to kickstart the economy.  

Here are the key points for small businesses:

• As predicted, personal income tax cuts are to be fast-tracked, with some getting it in their pay packets, others at tax time.
   
• Instant asset write-offs have been expanded to businesses with turnover of up to $5 billion until June 30, 2022, covering 99 per cent of businesses, costing $26.7 billion.
   
• Small and medium businesses can claw back thousands in tax with a new carry-back scheme with losses incurred to June 30, 2022 to offset profits booked since 2018-19.
   
• Small businesses will be able to apply “full expensing” to second-hand assets.
   
• To help the nation get back to work, a new JobMaker hiring credit will encourage businesses to take on young workers. It will be paid for a year at $200 a week for those aged under 30, and $100 a week for those aged 30 to 35. New hires must work at least 20 hours a week to be eligible. Estimated to support 450,000 jobs and all businesses except major banks eligible.
   
• To help eligible businesses retain apprentices and trainees, a 50 per cent wage subsidy is being offered.

The Budget does not contain any changes to the JobKeeper Payment Scheme, with the government gradually reducing the payments to wean the economy off government support.

Call in at your local TaxAssist Accountants. We’re here to guide and support you and your business through these difficult times.

Date published 7 Oct 2020 | Last updated 7 Oct 2020