Tax relief for individuals and businesses announced in Budget pass the Parliament
Tax cuts for 11 million Australians will flow in the coming weeks after the Federal Government secured the passage of the legislation through the Parliament.
The tax relief package, for both individuals and business, is part of our COVID-19 Economic Recovery Plan for Australia to create jobs, rebuild our economy and secure Australia’s future.
The Australian Taxation Office (ATO) will update its schedules next week, with software payroll companies to update over the coming weeks, to get more money into the pockets of hard-working Australians as quickly as possible.
Tax relief for individuals
From 1 July 2020:
the low income tax offset will increase from $445 to $700;
the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.
The Government is also providing additional targeted support to low-and middle-income Australians.
In 2020‑21, low-and middle-income earners will receive a one-off additional benefit of up to $1,080 from the low and middle income tax offset (LMITO).
Tax relief for business
Businesses with a turnover of up to $5 billion are now able to immediately deduct the full cost of eligible depreciable assets as long as they are first used or installed by 30 June 2022.
To complement this, the Government will also temporarily allow companies with a turnover of up to $5 billion to offset tax losses against previous profits on which tax has been paid.
Businesses with an aggregated annual turnover between $10 million and $50 million will, for the first time, be able to access up to ten small business tax concessions.
Under the changes passed by the Parliament the Government will also enhance previously announced reforms to invest an additional $2 billion through the Research and Development Tax Incentive.