There’s a lot to digest in this year’s pandemic-recovery federal budget.
So today we’ve chosen to focus on just a few key budget announcements we feel may help SMEs manage finance and debt in the years to come.
Great news for small businesses keen to invest in their future: they can continue to write off the full value of assets purchased until 30 June 2023.
The popular scheme, called ‘temporary full expensing’, is an expanded version of the popular instant asset write-off scheme.
It allows businesses, both big and small, to immediately write off any eligible depreciable asset, at any cost, until 30 June 2023.
This can help improve your cash flow by allowing you to reinvest the funds back into your business sooner.
To complement this, the federal government’s ‘loss carry back’ provision has also been extended to 30 June 2023.
“This is a tax initiative that effectively allows a small business to carry back tax losses from 2022/23 income year to offset previously taxed profits as far back as 2018/19, to support business recovery,” explains Small Business Ombudsman Bruce Billson.
Small businesses will soon be able to apply to the Administrative Appeals Tribunal (AAT) to pause or modify ATO debt recovery actions where the debt is being disputed.
“Small businesses disputing an ATO debt in the AAT will get a fairer go by stopping the ATO from relentlessly pushing on with debt recovery actions against a small business, while the case is being heard,” Mr Billson explains.
Currently, small businesses are only able to pause or modify ATO debt recovery actions through the court system, which can be expensive and time-consuming.
“Under the proposed changes, small businesses can save thousands of dollars in legal fees, not to mention up to two months waiting for a ruling,” adds Mr Billson.
The AAT will be able to pause or modify ATO debt recovery actions, such as garnishee notices, interest charges and other penalties until the dispute is resolved.
“It means that rather than spending time and money fighting in court, small business owners can get on with what they do best – running and growing their business,” says Mr Billson.
While it’s all well and good to have the AAT pause ATO debt recovery instead of the courts, the fact remains that many small businesses will still need to pay their ATO debt back.
So if the ATO is seeking a tax debt from your business, get in touch to discuss finance options for repaying them sooner, and giving you some breathing space.
And if we backtrack to the beginning of this article, being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the ‘temporary full expensing scheme’ won’t be of much use to you.
So if you’d like help obtaining finance to make the most of temporary full expensing for your business – whether it’s this financial year or next – reach out to us today.
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