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Federal Budget and how your Small Business is Impacted

COVID-19 Response Package

  • Fringe benefits tax will not be incurred by businesses where COVID-19 tests are provided to employees to attend a place of work (also, tax deductible for individuals). Start date 1 July 2021.

Varying the GDP uplift factor for tax instalments

  • The ‘uplift factor’ for GST instalments for the 2022/23 year has been reduced to 2%.  That is, the ATO will calculate regular instalments based on the previous year plus 2 per cent, instead of the 10 per cent per the statutory formula. This will provide cashflow benefits to small businesses. Start date 1 July 2022.

Modernisation of PAYG instalment systems

  • Businesses may choose to have their pay as you go (PAYG) instalments calculated based on current financial performance (extracted from business accounting software) – this is intended to support business cash flow by ensuring instalments reflect current performance of the business. Start date 1 January 2024.

Primary Producers – increasing concessional tax treatment for carbon abatement income

  • Proceeds from the sale of Australian Carbon Credit Units and biodiversity certificates generated from farm activities are to be treated as primary production income for the purposes of concessional tax treatment (that is, the Farm Management Deposits scheme and tax averaging). Start date 1 July 2022.

Skills and training boost

  • Small Businesses (turnover <$50m) can deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees. Start date 29 March 2022 to 30 June 2024.

Technology investment boost

  • Small Businesses (turnover <$50m) can deduct an additional 20 per cent of the cost incurred on business expenses and depreciable assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services. Annual expenditure cap of $100,000. Start date 29 March 2022 to 30 June 2023.

Smarter reporting of taxable payments reporting system data

  • Businesses will be able to report Taxable Payments Reporting System data (businesses that make payments to contractors may need to report these payments to the ATO) on the same lodgement cycle as their activity statements, thereby lowering compliance costs for taxpayers – Start date 1 January 2024.

Making COVID-19 business grants non-assessable non-exempt

  • The existing measure which enables payments from certain state and territory COVID-19 business support programs to be non-assessable non-exempt for income tax purposes, has been extended to 30 June 2022. In SA this applies to the Tourism and Hospitality Support Grant and the Business Hardship Grant.