As the new tax year came into force, here are a few key changes that small businesses should be aware of.
Spouse contributions into super
From July 1, 2020, the age limit for spouse contributions into superannuation will increase from 69 to 74 years.
Company tax rate for small businesses reduced
The corporate tax rate for small and medium companies with turnover under $50 million will reduce to 26% in the 2020-21 year, from the current 27.5%. This rate will reduce further to 25% in 2021-22.
Single Touch Payroll begins for closely held businesses
From July 1st 2020, closely held payees (someone who is directly related to the entity) will need to start reporting through Single Touch Payroll (STP).
Instant asset write-off extended
From 1st July 2020, the $150k threshold for the immediate write-off for assets acquired by businesses with aggregated turnover of less than $500 million has been extended.
Early access to super (second instalment)
For those who were financially affected by COVID-19 and accessed up to $10k of their superannuation in the 2019–20 year, they can also access a further $10k in the 2020-21 year by 24th September 2020.
Increased small business income tax offset
You can claim the small business income tax offset if you are a small business sole trader or have a share of net small business income from a partnership or trust. For the 2020–21 income year, the small business income tax offset increases to 13% in 2020–21 and to 16% from the 2021–22 income year.
Backing business investment – accelerated depreciation
From 12 March 2020 until 30 June 2021, the Backing business investment measure provides a time-limited (15-month) investment incentive to support business investment and economic growth by accelerating depreciation deductions. Depending on whether you are using the small business simplified depreciation rules or not, will determine the percentage claim you are eligible for in relation to the asset purchase. For more information on this measure, please contact us.
MSI Taylor – your Brisbane Small Business Accountant
With the ever-changing horizons concerning tax and other legislation, it is vital you have an accountant who can give you trusted and up-to-date advice. For tax, business advice and financial planning, contact us for a consultation or call us on (07) 3512 8888.