The ATO has announced a PAYG package which is intended to deliver cash flow relief through a 20% discount in the December quarter PAYG instalment for small businesses with a turnover under $2 million.
Small business entities are only required to pay 80% of the instalment amount shown on the monthly or quarterly BAS ending December 2008 and can further vary their instalments based on the reduced amount in accordance with the existing law.
This instalment amount is due on or before 2 March 2009 for most small business taxpayers. For those small business taxpayers electing to report and pay the goods and services tax on a monthly basis, the due date is 21 January 2009.
This reduction does not apply to taxpayers who calculate their instalments based on the instalment rate notified by the ATO. Their payments will automatically adjust when they apply the given rate to their actual income for the quarter.
As part of its initiatives to avoid a recession in Australia, the Government has announced the introduction of an investment allowance for capital expenditure incurred by business between midnight on 12 December 2008 and 30 June 2009. The investment allowance involves an additional tax deduction of 10%.
The investment allowance will be available for businesses who start to hold or start to construct an asset after 12.01am AEDT 13 December 2008 and before the end of June 2009. Assets must be ready for use by the end of June 2010 in order to qualify for the allowance.
The allowance will be applicable to most new tangible depreciating assets - which includes most items of plant and equipment - over $10,000 which are acquired or ordered by the end of the current financial year. Where an asset is partly used for private or non-taxable purposes, only the portion that is used for a taxable purpose in carrying on a business will count towards meeting the threshold.
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