1. Updates to the instant asset write off
The instant asset write off allows businesses to instantly depreciate the cost of any eligible assets they own, reducing their tax burden. Assets must be purchased and installed at a cost of $150K or less to be eligible.
The federal budget launched an extension to this initiative so businesses now have the opportunity to instantly depreciate assets up until June 30 2023.
Businesses turning over up to five billion dollars can now take advantage of the IAWO as well, so if you’re looking to invest in new assets for your business, such as vehicles, machinery, furniture or fit outs, now’s a great time to stock up.
2. Loss carry-back provisions extended
Loss carry-back provisions allow businesses to deduct this financial year’s taxable loss against previous years taxable profit, resulting in an immediate refund of taxes at tax time. These provisions have been extended which will give businesses a huge cash boost this EOFY.
3. Funding for infrastructure creates thousands of new jobs
Funding for infrastructure will not only result in safer roads and faster commutes, but new jobs for thousands of Aussies.
In fact, $110 billion will go towards improving road safety through the National Economic Recovery Plan, Local Roads and Community Infrastructure Program and Road Safety Program.
New job opportunities will be created in each state, filtering through to smaller contractors across the country. In addition, extension of HomeBuilder, the New Home Guarantee and the First Home Super Saver Scheme will continue to drive home construction, buoying trades and building services.
4. Funding for training and apprenticeships to help obtain skilled workers
Over the last financial year, many Australian businesses have struggled to find workers with the right skills and qualifications to service growing demand.
Part of the budget has been allocated to training and apprenticeship programs, expecting to support 170,000 new apprentices and trainees entering the workforce.
More specifically, $2.7 billion will be put towards the Boosting Apprenticeship Commencements program and businesses will receive a 50% wage subsidy for any apprentice or trainee (capped at $7K per quarter) they sign up by 31 March 2022.
5. Support for arts, tourism and international education systems
After the massive dry spell instigated by COVID-19 within the arts industry, the Government will be supporting recovery through funding and grants.
We’ll see $300 million go towards kickstarting products, festivals and events supporting artists, independent cinemas and other organisations within the creative space.
These grants should assist in boosting the industry and propelling it towards recovery. We’ll also see support for international education providers with grants of up to $150K to invest in infrastructure, expertise and new teaching solutions.
6. Tax breaks for biotech, booze and gaming sectors
Good news for Australian medical and biotechnology patents: any profits made from July 1 2022 will receive a tax cut of 8%. The current tax rate on profits is 25% and it will soon be down to 17%.
Digital gaming developers will also benefit with a 30% refundable tax offset capped at $20 million per year. This has been enforced in an effort to support the entertainment industry.
Finally, eligible Australian brewers and distillers will receive a full refund on any excise they pay (capped at $350,000, up from $100,000) per financial year. This will cost the Government an estimated $55 million annually.
For more information on the 2021 budget and your eligibility, visit the Government’s 2021-22 budget review. If you have any questions around the instant asset write off or your finance eligibility this EOFY, feel free to give us a call on 1300 780 568 or use our online loan finder.
Emilio is a Business Analyst here at Valiant. He draws on his passion, insight and understanding of small business to help our talented team of lending experts better understand their customers' needs.