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Australian Deductions, Schemes & Grants - Must Read for Small Businesses

The end of the financial year is a busy time for business owners, but you may be entitled to certain grants, deductions and stimulus packages designed to help small businesses and their employees. Read on for a brief summary, including COVID-19 related support and assistance. 


JobMaker Hiring Credit 


 This scheme is designed to incentivise businesses to hire job seekers between the ages of 16 and 35. Employers are entitled to make payment claims every three months for up to 12 months, for each employee hired between 7 October, 2020, and 6 October, 2021.  

Each employer and employee will need to meet the eligibility criteria, which can be found on the Australian Taxation Office website.

Please note, you cannot claim the JobMaker Hiring Credit and JobKeeper payments simultaneously. 


Backing Business Investment - Accelerated Depreciation


The backing business investment was created to allow eligible businesses to deduct the cost of new depreciating assets at the accelerated depreciation rate, for the 2019-20 and 2020-21 financial years. The deduction applies to assets first used or installed and ready for use in the income year.

Eligible and ineligible assets can be found on the Australian Taxation Office website.


Working From Home Deductions - COVID-19


Working from home deductions are relevant for your employees who are spending money on eligible items and services, and there are three ways for these costs to be calculated:

  1. The shortcut method: for the periods 1 March to 30 June 2020, and 1 July, 2020 to 30 June, 2021, 80 cents for every hour worked at home can be claimed to cover additional costs. No additional items can be claimed (such as the cost of a desk) as this amount covers all items, and deductions are only allowed where employees have spent their own money.

  2. The fixed rate method: for running expenses at a rate of 52 cents for every hour worked. This may include furniture value decline, electricity and repairs.

  3. The actual cost method: for running expenses at the actual cost of each item or service. This may include internet, phone and other expenses. 

These methods may also have additional tax benefits. 

 

Instant Asset Write-off

 
The instant asset write-off enables eligible small businesses in Australia to claim immediate deductions for certain purchases. The scheme is designed to allow businesses to claim the total anticipated depreciation of an asset at one time. 

The threshold for annual turnover and asset amounts have recently changed:

  • Asset value: $150,000 (previously $30,000)
  • Aggregated turnover: less than $500 million (previously $50 million)

Read our FAQ document about the instant asset write-off and what it could mean for your business today. 


Coronavirus SME Guarantee Scheme 


This scheme has been developed to enable eligible businesses to access additional funding, by guaranteeing 50% of new loans provided to SMEs from approved lenders. The first phase has now closed, but phase two supports businesses in recovery from the impact of the Coronavirus and helps lenders offer credit to SMEs at low interest rates. 

Phase two started on 1 October, 2020 and closes on 30 June, 2021. Find out if you’re eligible and apply for a loan at The Treasury website.


Export Assistance Grant NSW

This grant offers funding of up to $100,000 to businesses exporting goods or services prior to COVID-19, or prior to a significant environmental event like a flood. Funds may be used for market research, costs associated with moving to online delivery, e-commerce development and more. Apply via Service NSW.


Small Business Income Tax Offset


Also referred to as the unincorporated small business tax discount, this tax offset can reduce tax payments up to $1,000 per year. Sole traders running small businesses or with a share of small business income from a trust of partnership are eligible, provided they have a turnover of under $5 million from the 2016/17 financial year on. Find out if you’re eligible at the Australian Taxation Office website.

 

Please note, this list was accurate at the time of writing but conditions for eligibility and support may have changed. Visit the links listed for more information.

Sources

Australian Taxation Office
https://www.ato.gov.au

Service NSW
https://www.service.nsw.gov.au/ 

The Treasury 
https://treasury.gov.au/



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