I would be completely lying if I said that this years budget didn’t sneak up on me. It’s OCTOBER! I was happily assessing clients for JobKeeper 2.0 eligibility – (and when I say happily I mean frantically) and suddenly it’s BUDGET NIGHT. Traditionally, this is one of my favourite nights of the year and with this years big spending budget together lots of early drops about what was going to be announced – the stakes were high………..and it didn’t disappoint.
We’ve put together a budget overview which we will share with those who receive our newsletter covering the budget. It’s too lengthy for this blog as there was so much content in this years budget. If you’d like a copy of our budget overview, please email firstname.lastname@example.org and put “NEWSLETTER” in the subject line and we will add you to the list. This document will be sent this afternoon.
For now though, I’ll share my top 3 announcements:
Backdated to July 1, this means that for everyone who has a taxable income of $90k or less – you will now paying less tax. This has happened by moving the thresholds of income up and by increasing the low and middle income tax offset. It’s expected that the tax tables will be updated once legislated.
CAPITAL ASSET IMMEDIATE DEDUCTIONS
I’ll admit, this almost didn’t make my top 3 but based on the emails I’ve received – it’s a popular one. Obviously the Government is really keen for businesses to invest but on the flipside, those that have been really hurt by COVID aren’t in a position so this one isn’t that helpful for them.
The difference between this announcement and the current $150k immediate write off is that there is no cap on the amount of the asset and now any business with a turnover of less than $5b can claim the asset as an immediate deduction. It is expected that this will apply to assets first used or installed ready for use until 30 June 2022.
VICTORIAN BUSINESS SUPPORT GRANTS TO BE TAX FREE
An odd top three but this one is in here for precedence. State-based grants such as the Business Support Grants are generally considered taxable income unless legislation enables them to be treated as non-assessable, non-exempt income.
The Government will make the Victorian Government’s business support grants for small and medium business tax-free for tax purposes.
This program will be extended to all States and Territories on an application basis and is restricted to future grants programs. While no one hopes that Victoria or any other state or territory has a repeat of recent events, I am pleased with this tax response but will watch with interest for future announcements where support grants are provided.