From 7.30pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows for businesses with an aggregated turnover of less than $5 billion to deduct the business portion of the cost of eligible new depreciating assets. These must be first held and first used, or installed ready for use for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 until 30 June 2022.
For small and medium sized businesses (aggregated turnover of less than $50 million), temporary full expensing also applies to the business portion of eligible second-hand depreciating assets.
Businesses can also apply temporary full expensing to the business portion of the cost of improvements made to eligible depreciating assets. This applies even if those assets were acquired before 7.30pm (AEDT) on 6 October 2020.
If temporary full expensing doesn't apply to an asset, you may still be able to apply the existing instant asset write-off.
Under instant asset write-off, eligible businesses can immediately deduct the business portion of the cost of an eligible new or second-hand depreciating asset where it costs less than the relevant threshold amount.
For each asset first used or installed ready for use between 12 March 2020 and 30 June 2021, and purchased by 31 December 2020, the instant asset write-off threshold amount is $150,000 (up from $30,000). Eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).
Examples of assets that you may be able to claim as an immediate deduction under temporary full expensing or the instant asset write-off include power tools, leaf blowers, lawn mowers, nail guns, ladders, tool boxes, high-pressure water cleaners, concrete mixers, sheds, shelving and computers, laptops and tablets.
For more information about the instant asset write-off, including eligibility criteria and the different thresholds, visit the ATO website.
The government has prioritised skills development as part of its JobMaker Plan. The government’s plan will support getting people into jobs and ensures that Australians have the right skills for the jobs of the future.
As part of its economic response to COVID-19, the Australian Government is focused on supporting businesses to keep apprentices employed and to support fast re-engagement with employment and training.
The $1.2 billion Boosting Apprenticeship Commencements wage subsidy will support businesses and group training organisations to take on new apprentices and trainees, to build a pipeline of skilled workers to support sustained economic recovery.
This assistance will support 100,000 new apprentices across Australia and is in addition to the Supporting Apprentices and Trainees wage subsidy which is helping small and medium businesses to keep their apprentices and trainees in work and training.
Under this measure, eligible employers can receive assistance in reimbursement in arrears of 50% of the Australian apprentice’s gross wage, up to $7,000 per quarter, per eligible Australian apprentice.
Employers of any size, or industry, Australia wide who engage an Australian apprentice from 5 October 2020 through to 30 September 2021 may be eligible under this program.
The wage subsidy will pay 50% of the wages for eligible, new or recommencing apprentices or trainees, up to $7,000 per quarter through until 20 September 2021, for up to 100,000 apprenticeship commencements.
The subsidy is not available for any apprentice receiving any other form of Australian government wage subsidy, e.g. Supporting Apprentices and Trainees or JobKeeper.
The $1.3 billion Supporting Apprentices and Trainees wage subsidy is designed to target the retention of existing Australian apprentices, in recognition of the significant investment already made in their training. In July 2020, it was announced that an additional $1.5 billion would be made available to support the expansion and extension of the measure.
Under this measure, eligible employers can receive assistance in the form of a wage subsidy reimbursed in arrears at 50% of the apprentice’s or trainee’s wage, up to $7,000 per quarter.
In addition, employers of any size, including group training organisations may also be eligible for the subsidy if they re-engage an apprentice or trainee who lost their job from an eligible small or medium business.
Eligible employers can apply for a wage subsidy of 50% an eligible apprentice or trainee’s wages paid until 31 March 2021. In addition to the existing support for small businesses, medium-sized businesses may be eligible for the subsidy, for wages paid from 1 July 2020 to 31 March 2021.
1. Your small business may be eligible if:
2. Your medium-sized business may be eligible if:
Any employer (including all small, medium or large businesses and group training organisations) who re-engages an apprentice or trainee displaced from an eligible small or medium business may also be eligible for the subsidy.
In a move to entice employers to take on additional employees aged between 16 and 35, the government has invested $4 billion in a new JobMaker hiring credit scheme.
Under the program, eligible employers will have access to a credit for each new job they create for additional eligible employees between 7 October 7 2020 and 6 October 2021. They can claim the hiring credit for eligible employees for up to 12 months from their employment start date.
The credit will be:
Businesses with an aggregated turnover of less than $500 million are able to accelerate their depreciation deductions on the purchase of certain new depreciable assets. This applies to eligible assets acquired and first used or installed ready for use from 12 March 2020 until 30 June 2021 and may be used when the cost of the asset exceeds the instant asset write off threshold.
Eligible businesses, for the 2019–20 and 2020–21 income years, may be able to deduct the cost of new depreciating assets at an accelerated rate using the backing business investment – accelerated depreciation rules. For each new asset, the backing business investment – accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose. You claim the deduction when lodging your tax return for the income year.
The usual depreciating asset arrangements apply in the subsequent income years that the asset is held. If you are eligible for backing business investment – accelerated depreciation, you can choose to not apply these rules to an asset. The choice can be made on an asset-by-asset basis but cannot be changed once made. You make the choice in your tax return and you must notify ATO by the day you lodge your tax return for the income year in which the choice relates.
As part of the government’s economic recovery plan to create jobs, rebuild our economy and secure Australia’s future, an additional 10,000 first home buyers are now able to build or purchase a new home sooner under the extension to the First Home Loan Deposit Scheme.
The additional 10,000 places are available for the 2020-21 financial year to support the build of a new home or purchase of a newly built home. This allows first home buyers to secure a loan to build a new home or purchase a newly built dwelling with a deposit of as little as 5 per cent, with the Australian Government guaranteeing to a participating lender up to 15 per cent of an eligible loan.
One measure that offers considerable help for Australian businesses affected by economic downturn as a result of coronavirus is the tax-free cash flow boost. This offers eligible businesses who employ people credits totalling $20,000 up to $100,000, generally equal to the amount withheld from wages and salaries paid to employees. It’s automatically delivered as credits in the activity statement system when the March to September 2020 statements are lodged.