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Budget stimulus for self-employed, small business people

Thursday, October 08, 2020

We’ve tried to pick out the key things from the massive Morrison government Covid-19 business recovery package. These are the things that seem most relevant for self-employed, small business people.

Below is our summary and links to key ATO information. Check with your accountant for application to your personal situation.

Personal income tax
Planned tax cuts are being implemented early and backdated to July this year. This is important for all self-employed people.
JobKeeper
This is extended until March 2021, depending on turnover and related eligibility requirements. Payment rates from the government are lower than before. Details here for:
New JobMaker Program
This is if you take on a new employee. You receive a job subsidy as follows:
$200 a week if you hire someone 16–29 years of age;
$100 a week if you hire someone 30–35 years of age.
Instant Asset write-off
This applies to all small–medium businesses, including sole traders. You will be able to immediately write off against your tax any new purchases for your business. There’s no limit on the value of the purchase. For example, if a tradie buys a new vehicle, the full value can be written off immediately in the year of purchase. This includes second-hand purchases.
Loss carry-back provisions
Any losses in your business that you’ve made now can be offset against profits you made last year (2018–19). That is, you’ll get a tax refund on the tax you paid last year. This will take some of the financial sting out of any Covid-19 induced losses. Check the ATO link for details.
Other Matters
There is a range of other important initiatives, all of which are a bit too involved to summarise. Attached, however, is relevant information extracted from media releases from the Small Business Minister, Michaelia Cash. It covers:
  • USA-style ‘Chapter 11’ bankruptcy protections for small businesses;
  • Access to small business credit;
  • Further small business tax concessions when you employ people;
  • Fringe Benefit exceptions when you train staff;
  • More apprenticeships.
Link is here.

It’s a pretty impressive package!
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