The budget didn't contain much for small businesses. Some measures were extended and some important super guarantee rules are proposed to change. The sectors hardest hit by the pandemic continued to be ignored despite their businesses continuing to be impacted.
Outright deduction for Capital asset purchases
Once again the main measure aimed at business is the extension of accelerated depreciation which seems to have been a part of every budget for the last decade. The ability for businesses to deduct the full cost of new capital assets has been extended to 30 June 2023. The asset must be installed and ready for use by that date.
Loss Carry Back for Companies
Another measure that was extended was the loss carry back for Companies that was introduced last year. This measure would now apply to allow Companies to carry back losses made in the 2020, 2021, 2022 and 2023 Financial Years to offset previously taxed profits in 2019 or later years. These Companies would 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, 2022 or 2023 Tax Returns.
Removal of $450 threshold for Super Guarantee Contributions
It is expected that from 1 July 2022, employers will be required to pay super to all employees regardless of how much they earned in a month. Previously no super was required for employees who earned under $450. This will require amendments to be made to payroll software. We will await to see how simple the payroll software providers make the change.
Increase of Super Guarantee to 10%
While not mentioned in the budget, the previously legislated increase to super guarantee contributions to 10% is set to go ahead from 1 July 2021. Most payroll systems should update this automatically but please check whether this has happened in your first pay run of July.