Ahead of the 2020-21 Federal Budget, the Government has announced a range of new tax concessions for small and medium sized businesses.
For the first time, the Treasurer said businesses with an aggregated annual turnover between $10m and $50m will have access to up to 10 small business tax concessions, to be delivered in 3 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% FBT 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 PAYG instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods;
- the time limit for the ATO to amend income tax assessments will be reduced from 4 to 2 years for eligible business for income years starting from 1 July 2021; and
- the Commissioner’s power to create a simplified accounting method determination for GST purposes will be expanded to apply to businesses below the $50m aggregated annual turnover threshold.
FBT exemption for retraining employees
The Government also announced that it will provide an FBT exemption for employer-provided retraining and reskilling, for employees who are redeployed to a different role in the business. The FBT exemption will apply from 2 October 2020 (ie the date of announcement).
Currently, FBT is payable if an employer provides training to its employees that is not sufficiently connected to their current employment. For example, a business that retrains their sales assistant in web design to redeploy them to an online marketing role in the business can be liable for FBT. By removing FBT, the Treasurer said employers will be encouraged to help workers transition to new employment opportunities within or outside their business.
However, the FBT exemption will not extend to retraining acquired by way of a salary packaging arrangement or training provided through Commonwealth supported places at universities, which already receive a benefit.
In addition, the Government said it will consult on “potential changes” to the current arrangements for workers that undertake training at their own expense. In this respect, the Government acknowledged that the current rules, which limit self-education deductions to training related to current employment, may act as a disincentive to retrain and reskill to support their future employment needs.
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