On 6 October 2020 as part of the 2020–21 Budget, the government announced an extension to certain small business concessions (which were previously available to small business entities with an aggregated turnover of $10 million) to those that have an aggregated turnover of less than $50 million per annum. The tax concessions will apply from 1 July 2020 or 1 July 2021, and the Fringe Benefits Tax (FBT) related exemptions will apply for eligible businesses in respect of benefits provided on or after 1 April 2021.
This measure is now law.
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 that ends in the next income year.
From 1 July 2021 newly eligible businesses:
- can choose to use a simplified trading stock regime, where they may choose not to account for changes in the value of trading stock for an income year, if the difference between the opening value of stock on hand and a reasonable estimate of stock on hand at the end of the year does not exceed $5,000
- will have the option to have their PAYG instalments calculated for them by us based on previously reported information
- will have two years to amend an income tax assessment for income years that start on or after 1 July 2021. The current exceptions, including for fraud or evasion, will continue to apply. Businesses can lodge an amendment application before the time limit and we may extend the time limit to give effect to the application
- will be able to apply to defer settlement of excise duty to a monthly reporting cycle, instead of the current weekly reporting cycle in respect of eligible goods
- will be able to apply to defer settlement of excise-equivalent customs duty from a weekly to monthly reporting cycle in respect to eligible goods.
In addition, from 1 July 2021 the Commissioner’s power to create a simplified accounting method determination for GST reporting purposes will be expanded to apply to businesses up to the $50 million annual aggregated turnover threshold.
From 1 April 2021 the following FBT exemptions will be extended to newly eligible businesses:
- car parking benefits provided to employees will be exempt from FBT if the parking is not provided in a commercial car park
- multiple work-related portable electronic devices provided to employees will be exempt from FBT – even if the devices have substantially identical functions.
- Concessions at a glance
- Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020External Link (Act No. 92 of 2020)