YOUR 2020-21 FEDERAL BUDGET HIGHLIGHTS
The 2020-21 Federal Budget was released this week; here are some of the key updates you need to know!
CHANGES TO PERSONAL INCOME TAX RATES
Changes to the personal income tax rates that were due to apply from the 1st July 2022 will now apply from the 1st July 2020. These changes include:
increasing the upper threshold of the 19% personal income tax bracket from $37,000 to $45,000
Increasing the upper threshold of the 32.5% personal income tax bracket from $90,000 to $120,000
JOBMAKER HIRING CREDIT
A JobMaker Hiring Credit is being introduced to incentivise businesses to take on additional young job seekers. Employers will receive for up to 12 months:
$200 a week for each additional eligible employee they hire aged 16 to 29 years old
$100 a week for each additional eligible employee aged 30 to 35 years old
From 1st February 2021, the JobMaker Hiring Credit can be claimed quarterly in arrears by the employer from the ATO.
The amount of the credit is capped at $10,400 for each additional new position created AND the total credit claimed by an employer cannot exceed the amount of the increase in payroll for the reporting period in question.
UNCAPPED IMMEDIATE WRITE-OFF FOR DEPRECIATING ASSETS
A temporary tax incentive will be introduced to support new investment and deliver significant cash flow benefits to businesses.
Businesses with an aggregated annual turnover of less than $5 billion will be able to claim an immediate deduction for the full cost of an eligible depreciating asset in the year the asset is first used or is installed ready for use if;
The asset was acquired from 7:30 pm AEDT on 6 October 2020
The asset was first used or installed ready for use by 30 June 2022
SUPPORTING THE MENTAL HEALTH OF AUSTRALIANS IN SMALL BUSINESS - COVID19 RESPONSE PACKAGE
To support the mental health and financial well-being of small businesses impacted by the COVID-19, the Government is providing:
$4.3 million towards expanding Beyond Blue’s NewAccess program in partnership with the Australian Small Business and Family Enterprise Ombudsman
$2.2 million to expand a free accredited professional development program that builds the mental health literacy of trusted business advisers so that they can better support small business owners in times of distress. This is delivered through Deakin University
INSOLVENCY REFORMS TO SUPPORT SMALL BUSINESS
The following insolvency reforms are being introduced as of the 1st January 2021 to support small businesses:
The introduction of a new streamlined process to enable eligible incorporated small businesses in financial distress to restructure their debt
Simplifying the liquidation process for eligible incorporated small businesses
Support for the insolvency sector
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