Mar 12, 2020
What are the incentives for employers?
The Government intends to boost cash flow for employers with a turnover less than $50 million by refunding 50% of the Pay As You Go (PAYG) withholding amounts up to a maximum of $25,000. This will apply for payments starting 1 January 2020 and ending 30 June 2020 (including all months/quarters for that period). In addition, there will be a minimum payment of $2,000. These incentives will also be tax-free and will be paid within 14 days of lodging activity statements.
There are additional incentives for small businesses where the Government will subsidise 50% of wages paid to apprentices or trainees from 1 January 2020 to 30 September 2020.
What changes are proposed to the instant asset write-off?
The current instant asset write-off allows small businesses to immediately deduct the cost of new business assets costing less than $30,000. This concession will be expanded to allow for the immediate deduction of assets with values up to $150,000 for the financial year ended 30 June 2020. This concession will apply to businesses with aggregated turnovers not exceeding $500 million (up from $50 million).
If a business is not eligible for the new write-off, there will be an additional “business investment incentive” available until 30 June 2021 that accelerates depreciation deductions for businesses that meet the new turnover test ($500 million). These businesses may deduct 50% of the cost of eligible assets on installation, with the remaining amount being depreciated per the existing rules.
When will the incentives take effect, and when will they become law?
The dates of effect for each incentive are different.
The Government intends to legislate these incentives by 31 March 2020 (in time for the start of the June quarter).
To discuss how these proposed incentives may be able to help your business please contact us.