2020/21 Budget - What does it mean for my Business?

Oct 7, 2020

The Government have announced several measures designed to support businesses through the Coronavirus induced recession. The measures announced include:

Personal Income Tax Cuts

Tax cuts for individuals have been brought forward from 2023 to 2021. For more information read our article 2020/21 Budget - What does it mean for me?

JobMaker Hiring Credit

A scheme that gives employers an incentive to add new jobs and employ people under 35 years old. Employers can receive up to $10,400 ($200 per week) to employ young people in a newly created job if they have been on JobSeeker, Youth Allowance (Other) or Parenting Payment in one of the last three months. For more information read our article JobMaker Hiring Credit

Outright deduction for Capital asset purchases

Businesses with turnover of less than $5 billion will be able to deduct the full cost of new capital assets acquired from the 7th of October 2020 and first used or installed by 30 June 2022. Business with turnover of less than $50 million will be able to fully deduct the cost of new or used capital assets in that period. Small businesses with turnover of less than $10 million will also be able to deduct the full balance of their existing depreciation pool up until 30 June 2022.

Loss Carry Back for Companies

Companies with turnover of less than $5 billion will be able to carry back tax losses made in the 2020, 2021 or 2022 Financial Years to offset previously taxed profits in 2019 or later financial years. These Companies will be able to obtain a refund of up to the amount of tax paid in 2019 or later unless the tax has already been paid to shareholders as a franking credit. This will be able to be claimed in their 2021 or 2022 Tax Returns.

Super Guarantee

The budget was silent on the scheduled increase in the Superannuation Guarantee rate from 9.5% to 10%. This is due to happen from the 1st of July 2021. There may be an update to this in the next budget due in May 2021.

Apprentice wage subsidy

A 50% wage subsidy is available to businesses who take on a new Australian apprentice between 5 October 2020 and 30 September 2021. The subsidy is limited to $7,000 per quarter ($28,000 per annum).