Small Business Tax Changes for 2020

The Australian Federal Government has announced a range of relief and stimulus packages to help small businesses survive the COVID-19 shutdown. The main areas of support for small businesses below are all targeted, temporary, and scalable.


SME guarantee scheme

To support small to medium businesses during the upcoming months with access to funding for additional working capital, the Government will provide SME lenders with a 50% guarantee on any new unsecured loans. Any business with up to $50 million turnover that pass the credit assessment processes of lenders will be eligible for up to $250,000.

The scheme will be available until 30 September 2020 through participating lenders, for unsecured loans up to 3 years, and come with an initial repayment holiday for the first 6 months.


Instant asset write-off threshold increases

The threshold for instant asset write-off has risen until 30 June 2020 from the usual $30,000 up to $150,000. This higher threshold applies to either new or second hand assets installed after 12 March 2020 in businesses that have an annual aggregated turnover of below $500 million.

At this stage, the Federal Government hasn’t announced specific details regarding how to access this incentive.


Accelerated investment depreciation

In order to provide support for economic growth and investment over the short term, businesses can deduct an additional 50% off asset costs between 12 March 2020 and 30 June 2021. Businesses purchasing new depreciable assets which have a turnover of under $500 million will be eligible to claim brand new assets that are able to be depreciated within Division 40 of the Federal Income Tax Assessment Act 1997.

While no specific details regarding how to access this incentive have been announced as yet, depreciation is usually claimed back via business tax returns.


More information

For further information or a more detailed overview of these tax changes, including fact sheets, are all available via the Australian Treasury website.



Small Business Tax Changes for 2020

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