BUSINESS BOOSTERS: 2022 GOVERNMENT TAX INCENTIVES

Election years can be confusing for small to medium-sized business owners, especially when the wait is on to see what will be on the table in a new Federal budget. With a change in government, small to medium-sized businesses in the transportation and automotive sector are waiting to see where things will go from here. While Australia waits on the much-anticipated October-November 2022-2023 budget from the new Albanese government, there are still many ongoing benefits available for small to medium businesses. This blog addresses what is out there right now and what small to medium-sized businesses can do to make the most of existing tax incentives that can boost business bottom lines.

TEMPORARY FULL EXPENSING

Temporary full expensing is still available for eligible businesses with an aggregated turnover of less than $5 billion. Temporary full expensing is a process allowing eligible businesses to deduct the full cost of an eligible depreciating asset of any value. The business portion of the cost of eligible new depreciating assets can be deducted. These assets must be first held and first used, or installed ready for use for a taxable purpose, between 7.30pm (AEDT) on 6 October 2020 until 30 June 2023. Small to medium-sized businesses can apply temporary full expensing to the business portion of eligible second-hand depreciating assets. Click here for more information. Temporary full expensing can be applied to portions of the cost of improvement to eligible depreciating assets. Under temporary full expensing, small businesses can also deduct the balance of their small business pool at the end of the income years ending between 6 October 2020 and 30 June 2023. Check out the Australian Taxation Office’s information on temporary full expensing to learn more.

INCREASED SMALL BUSINESS INCOME TAX OFFSET

Small business sole traders and those with a share of net small business income from a partnership or trust can claim the small business income tax offset. If your small business turns over less than $5 million, then the small business income tax offset applies to you. The offset is based on your business tax returns, so making sure those are as up to date as possible to be able to claim back your income tax offset makes the process much smoother.

EXPANDED ACCESS TO SMALL BUSINESS CONCESSIONS

Simplified stock trading rules, pay-as-you-go (PAYG) instalment concessions, two-year amendment periods and excise concessions are generally reserved for businesses with a turnover of less than $10 million. However, from the 1^st of July 2021 this changed to incorporate businesses which are not classed as small business but have a turnover of less than $50 million. Businesses that are not deemed ‘small’ businesses because their turnover is $10 million or more but less than $50 million can also access these small business concessions:

• Simplified trading stock rules
• PAYG instalments concession
• A two-year amendment period
• Excise concession

There has been no announcement yet of an end date for this concession.

GRANTS FOR SMALL TRANSPORT AND AUTOMOTIVE BUSINESSES

Aside from exploring the tax incentives available to small businesses, another strategy for boosting your business is looking into the grants available from the ATO (Australian Taxation Office). Whether you are looking to improve the ventilation systems of your business’ office or warehouse to improve working conditions, are an Aboriginal business owner looking to strengthen your product and business capacity, looking to pick up a big infrastructure job in Western Australia or are a small business based in New South Wales in the recovery stages of flooding - there are hundreds of options available. While the grants vary in capacity, it can still be a great boost to small businesses especially after the upheaval of the past few years. Navigating tax incentives and ATO grants can be tricky business, but the payoff can make all the difference to your business account and get you back on the tools or on the road faster. Want to learn more about ways to support your small to medium business? Check out Cybersecurity: changing face of crime for small business to get the info on how to protect your business from cybercrime.