Here is a simple, jargon free summary of the budget measures that affect individuals and small businesses:
Individuals
Tax Cuts
Tax cuts that were due to come into effect in 2022 have been brought forward to 1 July 2020. How much you will save depends on your level of income:
| Income | Tax Savings |
| $25,000 | $245 |
| $50,000 | $1,080 |
| $100,000 | $1,530 |
| $150,000 + | $2,430 |
If you are an employee your employer will reduce the amount of tax withheld from your regular salary or wage. If you are self employed your PAYG Instalments will reduce.
Granny Flat Arrangements
A capital gains tax exemption will be enacted for arrangements where elderly or disabled Australians transfer title of a residential property to a family member in exchange for the promise of ongoing housing and care. Previously the existence of a formal agreement resulted in CGT consequences. This meant many agreements remained informal and left the elderly or disabled person open to financial or other abuse. The family member who receives the property may still be liable for CGT when they dispose of the property at some time in the future. Both parties should consult with their tax advisors.
Small Business
Instant Asset Write Off
Businesses can now claim an immediate deduction for any depreciable asset purchased after 7:30 pm on 6 October 2020 until 30 June 2022. There is no limit on the value of the asset for small businesses (turnover less than $50 million).
The asset can be new, an improvement to an existing asset or a second hand asset.
Small businesses with a turnover less than $10 million will be able to claim the entire balance of their small business pool as at 30 June 2021 and 30 June 2022.
JobMaker Hiring Credit
Employers who create new jobs and hire eligible young people will receive weekly credits for up to 12 months:
- $200 a week for workers aged between 16 and 29
- $100 a week for workers aged between 30 and 35.
The young people must have been recipients of either JobSeeker, Youth Allowance or Parenting payment in one of the three months prior to them being hired.
The credit will be claimed quarterly in arrears.
Fringe Benefits Tax
An exemption for FBT will apply to employers who pay for retraining and reskilling of redundant or soon to be redundant employees.
The government is also relaxing the record keeping requirements for FBT from 1 April. If the ATO considers that a business has adequate existing records they will no longer need to create specific records for FBT purposes.
Loss Carry Back
This measure only applies to corporate tax entities. Companies that make losses in the 2020, 2021 or 2022 tax years will be eligible for a refund of tax paid in the 2019 tax year onwards.
GQ Tax 