Last night the Morrison Government handed down one of the most important Federal Budgets in modern history. With 2020 being nothing short of a nightmare for small business owners, from fires to floods to COVID, we know we weren’t the only ones eager to see what support measures were to be put in place.
Unsurprisingly, this budget is one of the most stimulatory budgets ever handed down with significant spending in a plethora of areas including infrastructure, health and employment, coupled with widespread tax cuts and incentives. Whilst all of these measures will help strengthen the Australian economy in the coming months, in this article we will be directly focusing on measures that affect small business owners.
Loss carry back for Businesses.
The Government has announced that businesses (with a turnover under $5 billion) will be allowed to offset their losses against previous recorded profits. “This will provide a targeted cash flow boost that businesses across the country desperately need,” said Treasurer Josh Frydenberg.
So how does this work? Business losses incurred up to 2021‑22 can be offset against profits made in or after 2018‑19. Businesses can elect to receive a tax refund when they lodge their 2020‑21 and 2021‑22 tax returns. This means if your business has/ will occur a loss in the period listed above you are able to claim that against previous year profits, not wait until your business makes profit again in the future, injecting some much needed capital back into your business.
A major temporary measure put in place to help Australia SME’s get back on their feet is changes to tax incentives. 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. Examples of such assets include:
Josh Frydenberg said “Small businesses will buy, sell, deliver, install, and service these purchases.” “It will unlock investment, expand the productive capacity of the nation and create tens of thousands of jobs,”
Is this something your business would like to take advantage of? If so, check out our business asset loans here. We provide loans for a wide range of assets that can help your business grow, improve or achieve efficiencies. We give you peace of mind for your asset purchase, with no credit check done until after pre-approval. Balloon payments are acceptable and vehicles can be more than 15 years old at the end of term, giving you more flexibility in your purchase decisions.
Job maker hiring credit.
The JobMaker Hiring Credit provides businesses with incentives to take on additional employees that are young job seekers (aged 16 to 35 years old). Businesses will receive a JobMaker hiring credit of $200 per week for every worker aged up to 30 and $100 a week if they hire an eligible young person aged 30 to 35 years, payable for the next 12 months for new hires who work at least 20 hours per week. This provides SME’s with a regular payment for eligible new hires to help ease the financial burden of expanding your workforce.
Apprentice & trainee subsidy.
The subsidy is available to businesses who engage an Australian apprentice or trainee from 5 October 2020 until the 100,000 cap is reached. Employers will be eligible for 50% of the wages for a new or recommencing apprentice or trainee for the period up to 30 September 2021, up to $7,000 per quarter.
We’re still backing Australian businesses.
Everything we do is focused towards helping YOUR business grow. Quick and easy access to funds means that you can take advantage of a situation without the red tape. Plus, our rates and terms are market leading, giving your business more flexibility in the structure of your business loan. You can view our range of business loan products here.
Please note all information is general in nature and you should talk with an accountant to check your eligibility for these measures.