2020 Federal Budget

Wednesday 7th October 2020

2020 Federal Budget

Wednesday 7th October 2020
Written by Scott Brooks

The Government is spending - here’s how it might affect you:

1. Increased asset write-off thresholds

  • Existing $150K instant asset write-off threshold extended to 30 June 2021 - essentially applies to assets already purchased but not yet installed/used
  • No depreciation limit on assets purchased from 7.30pm 6 October 2020 and first installed or used prior to 30 June 2022

2. Small business loss carry back

  • Companies will be able to offset losses against previous taxable profits to generate a refund of previously paid tax
  • Losses available to carry back from FY2020, FY2021 and FY2022 to offset taxed profits from 2018-19 or later income years
  • First opportunity to obtain the refund will likely be on lodgement of FY2021income tax return

3. Personal tax cuts

  • Previously announced personal tax cuts have been brought forward effective 1 July 2020
  • Low and middle income earners will receive tax relief of up to $2,745 for singles, and up to $5,490 for dual income families

4. Jobmaker hiring credit

  • Cash rebate to employers who hire eligible employees aged 16-35 (employee must have also been recipient of JobSeeker, Youth Allowance (Other) or Parenting Payment for at least 1 of the previous 3 months)
  • Credit of $200/week for those aged 16-29 and $100/week for those aged 30-35
  • Employees required to work a minimum 20 hours/week and employers demonstrate an increase in headcount and payroll spend for each new position

5. Apprentice support

  • Enhanced support to all business irrespective of size to receive a wages subsidy of 50% of an apprentices wages up to cap of $7,000/quarter
  • Capped at 100,000 new apprentices
  • Available until 30 September 2021

6. Small business tax concessions

  • Existing provisions extended to businesses with turnover up to $50 million
  • Allows access to immediate deductions for start up costs and prepaid expenses
  • From 1 April 2021 will allow access to some FBT exemptions - car parking and portable electronic devices
  • Simplified GST and trading stock rules

Please reach out to your Maxim advisor if you have any questions on how the above will apply to you.

Scott Brooks