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  • Budget boost to small businesses

    13 October 2020

    Measures announced as part of 2020-21 Federal Budget that will boost small businesses include:

    • JobMaker Plan – temporary full expensing to support investment and jobs.
    • Increase to the small business entity threshold.

    The JobMaker Plan: eligible businesses with an aggregated turnover under $5 billion will get an immediate tax deduction for the full cost of new eligible depreciable assets acquired, start to use or installed ready for use between 7:30pm AEDT on 6 October 2020 and 30 June 2022.

    For small and medium sized businesses (with aggregated turnover under $50 million), full expensing also applies to eligible second-hand assets.

    The existing enhanced instant asset write-off incentive has been extended for 6 months to 30 June 2021 and is available for assets first used or installed ready for use before that date.

    Small businesses (with aggregated turnover under $10 million) can deduct the balance of their simplified depreciation pool at the end of the income year while full expensing applies.

    The provisions that prevent small businesses from re-entering the simplified depreciation regime for five years if they opt out of the regime will continue to be suspended.

    The increase in the small business entity turnover threshold from $10 million to $50 million per annum will expand access to several small business tax concessions.

    The increased access to concessions will apply from different start dates so make sure you are aware of when each concession starts for your business.

    Pending legislation, from 1 July 2020 newly eligible businesses can immediately deduct:

    • certain start-up expenses – for example, professional expenses and legal and accounting advice
    • certain prepaid expenditure where the payment covers a period of 12 months or less and ends in the next income year.

    The fringe benefits tax related exemptions for eligible businesses will start from 1 April 2021

    We will provide further information on tax concessions applicable from 1 July 2021, as soon as it's available.

    Remember, registered tax agents can help you with your tax.

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