GST for small business: Everything you need to know
With the Australian Federal Government’s 2021 Budget handed down on 11 May, we’ve delved into the detail to bring you a summary of business-related measures, promises and initiatives.
What does the budget mean for you? Read on to find out.
The instant asset write-off has been extended until 2023.
Also extended is the loss carry back scheme, which allows eligible businesses to use tax losses from the 2022-23 financial year to offset taxed profits from as far back as the 2018-19 financial year.
The SME Recovery Loan Scheme, designed to support COVID economic recovery, has been extended, including the possibility of repayment holidays.
2. For tax time
The small business company tax rate will drop from its current level of 27.5 percent to 26 percent in 2020/2021 and then further to 25 percent in 2021/2022.
Any business in dispute with the Australian Tax Office (ATO) via the Administrative Appeals Tribunal (AAT) will appreciate ‘fair go’ measures that include a pause on debt recovery actions while a case is being heard.
3. Study and business support
JobTrainer is extended for an additional 12 months, allowing SMEs to employ apprentices and trainees with a 50 percent wage subsidy (up to $28,000 per year).
For businesses needing support to grow, funding for locally-embedded Entrepreneurship Facilitator Programs has been extended.
A nationwide ‘shop local’ campaign will be funded (to the tune of $8 million).
For those wanting to undertake courses (or encourage their staff to), the first $250 spent on an education course is no longer excluded from an individual’s deductions.
4. Digital and deregulation
The Digital Solutions aspect of the Australian Small Business Advisory Services will be expanded (to the tune of $12.7 million) in its aim to help business adopt digital tools for growth and efficiency.
Investment in ‘regtech’ (regulatory technology) will support smaller employers to comply with modern awards and ensure accurate payrolls.
To reduce the admin involved in the 1.2 billion invoices exchanged each year across Australia, businesses will be supported to adopt e-invoicing.
SME participation in federal government procurement will be strengthened.
5. Announcements for specific sectors
Aviation, tourism and arts sectors will benefit from COVID-related targeted support measures.
For trades-based businesses that work across state and territory lines, there will be investment into automatic mutual recognition of licences.
Franchise-based businesses should be aware of the new mandatory Franchise Disclosure Registry, aiming to increase transparency.
For digital game developers there will be provisions to support this growing industry.
For businesses with intellectual property costs, the ‘economic life’ of intangible assets like patents and copyrights will be able to be self-assessed.
Businesses in northern Australia will benefit from an insurance guarantee for cyclone and flood damage from July 2022, funded to the tune of $10 billion.
Craft brewers and distillers can benefit from tax breaks of up to $250,000.
And on a personal note
We understand that there’s a strong link between your business and personal lives.
For Parents of young children (and those considering starting a family) there will be increases to childcare subsidies (to the tune of $1.7 billion) and extra funding for preschool services.
For anyone earning under $126,000 per year, the Low and Middle-Income Tax Offset has been extended (providing up to $1,080 of tax relief).
In addition, there’s further funding for the Ahead for Business program, a program that supports small business owners with the important task of protecting and improving their mental health.
Keen to read more?
For further reading:
Australian Small Business and Family Enterprise Ombudsman: 2021 Budget summary
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