The Government has announced that it will assist small and medium business through economic times by offering a stimulus package to support employers and increase investment in business assets.
With details to follow, the headline for the small business will include:
1. Up to $25,000 credit on PAYG Withholding obligations when businesses lodge their monthly or quarterly Activity Statements.
2. Increasing the immediate deduction for business asset purchases from $30,000 to $150,000.
What this means…
The $25,000 credit against your PAYG will ease immediate cash flow issues. Whilst details are yet to be confirmed, early announcements indicate that the government will offset 50 percent of an employee’s PAYG withholding obligation up to a maximum of $25,000. This means that whilst businesses won’t receive a cash handout, they will benefit from reduced Activity Statement liabilities when they lodge. Government hopes that this tax break will allow businesses to keep paying their suppliers who are also facing cash flow challenges.
The increase to the instant asset write-off threshold to $150,000 will present tax planning opportunities for businesses that will otherwise be in a tax payable position in FY20. Where instalments have been paid, the measures may provide clients with a chance to get a refund of provisional tax paid. We do caution clients to ensure that the investment will generally support business growth and not place the business in longer term financial stress. What’s next…
Hinterland Accounting Services will provide regular updates on what this means for our clients.
If you wish to discuss the impact on your business, please call us on 07 5439 0188.