2020-2021 Federal Budget: Key Initiatives

A number of measures have been announced in the 2020-2021 federal budget to support households and business, and address the impacts of the Covid-19 pandemic on business and employment.

Key initiatives from the budget include:

​Personal income tax cuts from 1 July 2020: An additional $17.8 billion in personal income tax relief, including an additional $12.5 billion over the next 12 months. The changes include bringing forward the tax cuts in Stage 2 of the Personal Income Tax Plan, as well as a one-off additional benefit from the low- and middle-income tax offset in 2020-21.​
​
Bringing forward the personal income tax plan will:

1. Increase the top threshold of the 19% tax bracket to $45,000 (from $37,000)
2. Increase the top threshold of the 32.5% tax bracket to $120,00 (from $90,000)
3. Introduce a temporary low and middle income tax offset capped at $1,080
4. Increase the low income tax offset from $445 to $700

Immediate deductions for business investment in capital assets: ​Businesses will be able to deduct the full cost of eligible depreciable assets of any value in the year they are installed. A temporary tax incentive to businesses with turnover up to $5 billion. From 7:30pm (AEDT) on 6 October 2020 until 30 June 2022, 

Changes to how companies can manage losses: Companies with turnover up to $5 billion will be able to offset losses against previous profits on which tax has been paid, to generate a refund. Losses incurred up to 2021‑22 can be carried back against profits made in or after 2018‑19.​​

The JobMaker Hiring Credit: This credit will provide businesses with incentives to take on additional employees aged 16 to 35 years old

If you have any questions about how these changes impact you, please don’t hesitate to give us a call on (08) 9791 5877.

Article Source