Practice makes perfect: why your medical practice needs Medicare Easyclaim with Tyro EFTPOS
The dust is settling on the first Federal Budget delivered since the pandemic began and the pundits have shared their views, but what does it really mean for small businesses?
As the nation – and its economy – continues to grapple with the pandemic and the uncertainty that accompanies it, the Government announced a number of measures it has designed in a bid to support Australian businesses and generate jobs.
These measures include changes to taxation arrangements, incentives for employing young Australians and insolvency reforms related to refinancing.
Below are some of the SME-related components of the 2020-21 budget.*
Temporary full expensing
• Designed to reduce the after-tax cost of eligible assets, providing a cash flow benefit.
• From 7:30pm (AEDT) on 6 October 2020 until 30 June 2022, businesses with turnover up to $5 billion can deduct the full cost of eligible depreciable assets of any value in the year they are first used or installed ready for use.
• The cost of improvements made during this period to existing eligible depreciable assets can also be fully deducted.
• Eligible businesses that acquire eligible new or second-hand assets under the enhanced $150,000 instant asset write-off by 31 December 2020 also have an extra six months, until 30 June 2021, to first use or install those assets.
Temporary loss carry-back
• Allows companies to access their losses earlier, by way of a cash refund, to support their cashflow, maintain staff and enable future investment.
• Companies with turnover up to $5 billion will be able to offset tax losses against previous profits on which tax has been paid to generate a refund.
• Losses incurred in 2019–20, 2020–21 and/or 2021–22 can be carried back against profits made in or after 2018–19 and eligible companies may elect to receive a tax refund when they lodge their 2020–21 and 2021–22 tax returns.
The JobMaker Hiring Credit
• From 7 October 2020, eligible employers will be able to claim $200 a week for each additional eligible employee they hire aged 16 to 29 years old; and $100 a week for each additional eligible employee aged 30 to 35 years old.
• To be eligible, the employee must have received the JobSeeker Payment, Youth Allowance (Other), or Parenting Payment for at least one of the previous three months at the time of hiring.
• There is more information about this initiative, including eligibility requirements and FAQs, in the Budget Fact Sheets.
• A new formal debt restructuring process for small businesses to provide a faster and less complex mechanism for financially distressed but viable firms to restructure their existing debts.
• A simplified liquidation pathway for small businesses to allow faster and lower-cost liquidation, increasing returns for creditors and employees.
• More detail can be found in this fact sheet.
The information above includes some of the key take-outs as they relate to SME’s more information about the broader budget can be found at https://budget.gov.au/2020-21/content/overview.htm