Small Business Tax Concessions | Federal Budget 2020-21 Considerations

Small Business Tax Concessions | Federal Budget 2020-21 Considerations

The Government is expanding the availability of a variety of small business tax concessions to extend to medium sized businesses by lifting the aggregated annual turnover threshold from $10m to $50m, providing tax relief and reducing red tape for businesses.

The Government proposes to extend small business tax concessions (currently available to entities with an aggregated turnover of less than $10m) to entities with an aggregated turnover of less than $50m, in three phases.

The first phase is retrospective from 1 July 2020. This phase allows immediate deductions for eligible businesses for certain start-up expenses (including raising equity and obtaining advice on business restructuring and/or expansion). Businesses within this threshold will also have immediate deductions available for certain other prepaid expenses (including rent, interest and leasing expenses).

The second phase is available from 1 April 2021. This phase will allow Fringe Benefit Tax (FBT) exemptions for eligible businesses on the provisions of benefits including car parking and work-related portable electronic devices.

The final phase will be available from 1 July 2021. This phase will include a number of concessions available to eligible businesses.

These concessions will include:

• Simplified trading stock rules;
• GDP – adjusted PAYG instalments (instead of needing to calculate actual instalment income);
• Monthly settlement of excise and excise-equivalent duty;
• Two-year period of amendment for income tax returns; and
• Simplified accounting methods for GST.

These concessions will allow small and medium sized businesses to obtain a variety of benefits and allow growth to the industry.

Co-written by Ally Evans & Chelsea Fennell

The information contained in this blog is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. In all cases, you should consult with a professional advisor familiar with your factual situation for advice concerning specific matters before making any decisions. By reading this blog, you confirm your understanding of this disclaimer.