As an Australian business owner, has there been any measures introduced in the 2020 federal budget that might benefit me in terms of income tax?
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Several measures announced as part of the federal budget may benefit your business. Firstly, from October 7, 2020 to June 30, 2022, any eligible business can deduct the full cost of new eligible depreciable assets of any value in the year the assets are first used or installed ready for use.
The upfront deduction also applies to improvements made to eligible depreciable assets in this period.
You will be eligible to deduct new eligible depreciable assets if your gross income - when combined with income generated by other related entities in your business' group - is below $5 billion.
This is different to the current rules which only allow full deductions for businesses with a turnover of less than $500 million on depreciable assets costing less than $150,000.
Another measure that might be available to you if you operate a company is the loss carry back rules.
Typically, when a loss is made, it can be carried forward to be offset against future profits.
However, under the new measure, you will be allowed to carry a loss made in 2020, 2021 or 2022 back to a profitable year starting from July 1, 2018, and generate an immediate refund for tax that had been previously paid.
This will only be available for groups that generate a gross income of less than $5 billion.
Lastly, if you weren't eligible for any small business concessions before, you may be eligible in the future.
From July 1, 2021, the remaining small business concessions - which include simplified trading stock rules and a two-year Australian Tax Office amendment period - will also apply to your business if it generates a total income of less than $50 million.
These changes have not yet come into effect and will only take place if they pass through Parliament and are legislated.
If you have questions or concerns, please speak to your tax adviser or contact the Findex team at albury@findex.com.au