Tax Updates

Budget announcement 6th October 2020

Individuals

The government has rejigged its $158 billion income tax plan, bringing forward tax cuts due to kick in mid-2022 and backdating them to July.
- Essentially, if backed by Labor, the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000, while the top threshold for the 32.5 per cent tax bracket will be lifted from $90,000 to $120,000.
- The announced changes are hoped to be implemented by the end of this month and will see those earning between $45,000 – $90,000 pocket an additional $1,080 this financial year.
- Employees earning more than $90,000 will take home some $2,565 extra, while people earning over $120,000 are set for the maximum benefit.
The Government’s also keeping the Low and Middle Income Tax Offset for an extra year.
The budget papers show the Government isn’t planning on increasing the base rate of the JobSeeker unemployment benefit.
- They also show the additional coronavirus supplement, currently $250 a fortnight, will end at the end of December, returning the benefit to its pre-pandemic rate.
- But speaking before the Budget, Social Services Minister Anne Rushton said there would be more announcements about JobSeeker before the end of the year — so watch this space.

https://www.facebook.com/watch/?v=1428453744211711

https://www.dailymail.co.uk/news/article-8821831/Tax-cuts-giving-11million-Australians-money-pockets-pass-parliament.html

https://au.finance.yahoo.com/news/tax-cuts-2020-budget-broken-down-095531619.html

Businesses

As announced by the Treasurer, from 7:30pm (AEDT) on 6 October 2020 until 30 June 2022, businesses with turnover up to $5 billion will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed. The cost of improvements to existing eligible depreciable assets made during this period can also be fully deducted.
- The changes also mean any losses incurred up to June 2022 can be offset against prior profits made in the last two years, to the 2018-19 financial year.
Companies with turnover up to $5 billion will be allowed to offset losses against previous profits on which tax has been paid, to generate a refund, Treasurer Josh Frydenberg announced on Tuesday.
- The tax refund would be limited by requiring that the amount carried back is not more than the earlier taxed profits and that the carry-back does not generate a franking account deficit.
- The tax refund will be available on election by eligible businesses when they lodge their 2020–21 and 2021–22 tax returns.
- Currently, companies are required to carry losses forward to offset profits in future years. Read more here
The subsidy will be available to employers Australia-wide who engage an Australian apprentice or trainee from 5 October 2020 until the 100,000 cap is reached.
From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure.
From 1 April 2021, eligible businesses will be exempt from the 47 per cent fringe benefits tax on car parking and multiple work-related portable electronic devices, such as phones or laptops, provided to employees.
From 1 July 2021, eligible businesses will be able to access the simplified trading stock rules, remit pay-as-you-go (PAYG) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods. Eligible businesses will also have a two-year amendment period apply to income tax assessments for income years starting from 1 July 2021.
- Additionally, from 1 July 2021, the Commissioner of Taxation’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50 million aggregated annual turnover threshold.