The Australian Government has announced several new tax changes that could impact your small to medium enterprise (SME) for 2021.
With the end of the financial year fast approaching, here are the main changes that your SME might need to consider.
The main changes that might impact you
1. New Online services for businesses
Online services for business will be the new place for businesses to manage their tax and super online, replacing the Business Portal. This will offer options like, downloading information to CSV or HTML, and adding hyperlinks to the lodgement. If you lodge electronically, then you don’t need to send a paper form, and you may be able to get an extra two weeks to lodge and pay your BAS.
2. Company tax rate
The company tax rate for base rate entities has been lowered from 27.5% in 2020 to 26%. A base rate entity is a company with aggregated turnover of less than $50 million that derives 80% or less of its income from dividends, interest, royalties, rent and net capital gains.
3. Full expensing of depreciating assets
Businesses with an aggregated turnover of less than $5 billion that purchased and first used/installed depreciating assets after 6 October 2020 can fully expense the cost of depreciating assets.
4. Loss carry-back measures
Loss carry-back provides a refundable tax offset. 2021 is the first year the new loss carry-back measures can be used to provide a refund to companies when they lodge their 2021 tax returns.
5. Immediate tax deduction for start-up expenses
2021 is the first year that medium sized businesses with an aggregated turnover of $10-50 million will be able to claim an immediate tax deduction.
6. If you provide a work car to your employees
If you provide a work car to your employees, you may need to pay fringe benefits tax (FBT). If you need help, the ATO offers a short online course all about the fringe benefit tax.
Want to know more? Please click here for more information regarding on the topics covered in this article, or speak with an advisor.
Disclaimer: While we do want you to get the most out of the end of financial year and stay updated with tax changes, please note that we are not tax advisors! For tax and financial advice, talk to your advisor, hop on the ATO (Australian Taxation Office) website or consult a registered tax advisory business or BAS agent.
