With a major focus on the continued recovery of Australia’s economy from the pandemic, Josh Frydenberg’s recently-announced 2021-22 Federal Budget had its share of both winners and losers.
Business owners as a whole, it seems, look to be in the list of winners, with the Budget providing extensions to several of the programs put in place last year which we’ll get into in a moment, as well as the addition of a few new initiatives that look quite promising.
So without further ado, let’s get into the key takeaways for business owners in the 2021-22 Federal Budget.
1. Extension of instant asset write-off scheme
For any businesses that have a turnover of up to $5 billion, you’ll continue to be able to write off the entire value of any work-related eligible asset such as commercial equipment or a commercial vehicle that has been purchased between the last Budget right through to 30 June 2023.
To break things down a bit for clarity’s sake, businesses with a turnover of up to $50 million are able to instantly write off both new and secondhand business-related assets as long as it has been purchased before 31 December 2021 and installed or in use earlier than June 2023.
And while these rules all apply to businesses with an annual turnover between $50 million and $500 million, the value of the purchased asset has a cap of $150,000.
If you’re operating a business that has a turnover of between $500 million and $5 billion you’re not actually able to purchase a secondhand asset to be eligible, however you can indeed purchase something new without any cap on the cost.
The icing on the cake is that any and all businesses with a turnover up to $5 billion can additionally make improvements to existing assets and these improvement costs are also able to be instantly written off.
2. Extension of JobTrainer program
You may or may not remember the premise of the JobTrainer program which came into effect last year. In short, the Government subsidises 50% of new or recommencing trainees’ and apprentices’ wages.
Although this was scheduled to finish up in September this year, the 2021-22 Federal Budget has in fact extended this by another 12 months, enabling another 170,000 trainees and apprentices to secure employment.
This means you’re able to take on apprentices/trainees without as much of a financial burden, enabling you to get the help you need and ensuring they get the training they need for their careers ahead.
3. Extension of loss carry-back measures
Provided your annual turnover is less than $5 billion, the Government has extended your ability to offset any losses you’ve suffered between the coronavirus pandemic’s inception and June 2023 (this was otherwise finishing in June 2022) against the tax that was paid in the 2018/19 financial year.
Putting it simply, if your business experienced any decline in profits because of the pandemic, you can claim back a portion of the tax your business paid in the previous financial year.
4. Potential to pause/modify ATO debt recovery actions
If your business has a turnover of under $10 million a year, the Government has announced that should the ATO be conducting any debt recovery actions against your business you’re now able to apply to the Administrative Appeals Tribunal (AAT) to have these actions either modified or paused.
This can provide you some breathing room (and a bit of stress relief!) to focus wholly on your business’ operations and getting everything back on track.
5. Investment into the digital economy
When COVID-19 hit, businesses everywhere had to revise the way things were done. One of the biggest shifts - if not the biggest - was in the digital space; because staff weren’t able to go into the office anymore, working from home became the norm. Which meant (very quickly) implementing digital solutions for meetings, to access company servers, consistent communication avenues… the list goes on.
Which is why the Federal Government announced a $1.2 billion Digital Economy Strategy within the Budget. This strategy includes allocations for upskilling staff with digital technologies as well as investments into artificial intelligence research and industry capability and other digital initiatives.
Make the most of the 2021-22 Budget by speaking with us
With over two decades’ worth of experience assisting businesses just like yours, you can rest assured we’ll find the ideal financing solution for you every single time. And with the extension of the instant asset write-off scheme, we’re here to find you the best commercial finance deals out there so your business can grow into something truly spectacular. Whether you’re after one or more new work vehicles, equipment finance or something else, we’ve got you covered.
So if you’d like to ensure you’re getting everything you can from this year’s Budget, give the team at Stratton Finance a call right now on 1300 787 288. Alternatively, you can message us online and you’ll hear back from us soon.
Disclaimer: Nothing in this article should be assumed as personal advice. You should consider whether the information is appropriate to your needs, and where appropriate, seek advice from a professional financial adviser.