It is the end of the financial year, and the tax season is beginning again. The COVID-19 pandemic has significantly impacted all of us including businesses, families, and the economy. The Australian Government has released various tax relief measures and support to help business and individual taxpayers. We discuss some of the various tax measures available below.

 Income Tax Measures for Businesses

 Instant Asset Write Off

• The instant asset write-off threshold increased from $30,000 to $150,000 and eligibility was extended to businesses with an aggregated turnover less than $500 million (up from $50 million).
• The $150,000 instant asset write-off applies for assets purchased up to 31 December 2020 and installed and ready for use up to 30 June 2021.

 Accelerated Depreciation

• A 15-month investment incentive (from 12 March 2020 to 30 June 2021) to accelerate depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation (or capital allowance) rules applying to the balance of the asset’s cost.
• Small businesses using simplified depreciation pools can deduct 57.5% of the cost of a new depreciating asset if the cost of the asset is above $150,000 (already fully deductable under the instant asset write off regime if the cost is less than $150,000). This is a significantly larger deduction which otherwise would be 15% of the cost of the asset.

Temporary Full Expensing of Eligible Assets

• The full cost of an eligible capital asset that is acquired after 7:30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2022 can be deducted upfront. To be eligible for this incentive, businesses must have an aggregated annual turnover of less than $5 billion.
• Small and medium-sized businesses with an aggregated annual turnover of less than $50 million) can fully deduct second-hand assets purchased and installed during the eligible period.

Temporary Loss Carry-Back for Corporate Tax Entities

• Eligible companies with aggregated turnover up to $5 billion will be able to offset tax losses against prior year taxed profits to generate a refund.
• Losses incurred in the 2019-20, 2020-21 or 2021-22 income years may be carried back against profits made in or after the 2018-19 income year.

Please click here to read more details about this regime in our March 2021 newsletter.

Income Tax Measures for Individuals

 Home Office Expenses

• An alternative shortcut method to claim working from home expenses at 80 cents per hour can now be applied up until 30 June 2021.

Please click here to read more about the 80 cents per hour method.

The Australian Government has implemented the above tax measures to assist individuals and businesses through the COVID-19 crisis. When preparing your tax return for the 2021 financial year, keep the above concessions in mind as they could save you tax! ·