With all children now back at school, things are starting to head to a new form of normal. Shops and businesses are beginning to open and people are starting to return to work. The Government has recently announced that JobKeeper payments will stop on 20 July for childcare businesses and their employees. This late July period is also crucial as indications are the Government will finalise a review of the JobKeeper scheme and examine whether other industries should similarly be cut off before the end of September deadline initially set out in the scheme.
However the recent announcements have not all been terrible for taxpayers. There have been two announcements which will benefit taxpayers. The first is the extension of the $150,000 immediate asset write off from 30 June 2020 to 31 December 2020. This gives eligible businesses the opportunity to upgrade and improve their assets prior to year end and receive an immediate benefit by being able to claim a deduction in full for the business related portion of the asset. The extension is a practical one and gives businesses a chance to utilise the generous thresholds later this year when their finances improve.
The second announcement was that the 2021 GST and PAYG instalments would not be indexed. These instalments are prepayments of GST and income tax and are based on the last lodged tax return. Usually these figures are then indexed to reflect the expected growth in income and the impact on the tax owed. In the 2020 year, these instalments were increased 5% on the 2019 figures. This relief will keep these instalments lower and assist with the cash flow of taxpayers and businesses in the 2021 year. It is important to note that this relief does not reduce or impact the final tax owed. It merely reduces the amount of tax required to be prepaid throughout the year.
With the 2020 financial year quickly coming to an end, if you need any assistance or tax planning advice, please do not hesitate to contact us.