Businesses with an aggregated annual turnover between $10 million and $50 million will have access to up to ten small business tax concessions.

The changes are estimated to support an additional 20,000 businesses and their employees according to a joint press release from the Treasurer Josh Frydenberg and Assistant Treasurer Michael Sukkar.

The original press release can be found here: Expanding Access to Small Business Tax Concessions

How the updated small business tax concessions will be rolled out

The expanded concessions, as part of the 2020-21 Budget will apply in three phases:

  • From 1 July 2020, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure.
  • From 1 April 2021, eligible businesses will be exempt from the 47 per cent fringe benefits tax on car parking and multiple work-related portable electronic devices, such as phones or laptops, provided to employees.
  • From 1 July 2021, eligible businesses will be able to access the simplified trading stock rules, remit pay as you go (PAYG) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods. Eligible businesses will also have a two- year amendment period apply to income tax assessments for income years starting from 1 July 2021.

In addition, from 1 July 2021, the Commissioner of Taxation’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50 million aggregated annual turnover threshold.

What types of concessions will be available?

More details will be made available as further information is released on these measures, however it’s likely to align the the existing small business tax concessions including:

  • Simplified depreciation and the instant asset write-off;
  • Accelerated depreciation;
  • Deductions for professional expenses for start-ups;
  • Small business restructure rollovers;
  • Simplified trading stock rules;
  • Immediate deduction for prepaid expenses;
  • Two-year amendment periods;
  • Increased small business income tax offset;
  • PAYG instalment concessions;
  • Simplified BAS

If you have any questions regarding this announcement and opportunities it may provide to assist your business, please get in touch with the Quill Accounting Team.