Rateseeker Round-up: July Business and Finance News
As we kick off a new financial year, many small businesses are feeling the crunch as a result of ongoing COVID-19 restrictions in Australia’s capital cities. In turn, major lenders have introduced solutions to help SMBs weather the storm, including deferrals on existing loans.
This month, the Australian Taxation Office (ATO) has reminded small businesses to take advantage of payment plans and small business tax cuts as FY22 gets into full swing.
Missed the latest news? We’ve rounded up the biggest updates from the business and finance industry below.
Banks offer three-month loan deferrals to SMBs
Recognising the ongoing challenges presented by the latest round of lockdowns, Australia’s major lenders are offering loan deferrals to all small businesses that meet certain criteria.
To qualify, businesses must:
- Have a turnover of less than $5 million and loans of less than $3 million
- Have loans in good standing. This means that either repayments must be up to date or the business must be engaged in a payment program.
Need assistance with your business loans? Speak to a member of the Rateseeker team today. We’ll work with you to find the best solution for your situation.
ATO offers payment plans for SMBs
With the 2020/21 Financial Year well behind us, the Small Business Ombudsman has reminded businesses to be proactive at tax time and take advantage of the ATO’s SMB payment plans.
Recent reports have shown a decline in small business payment plan arrangements over the past three years. However, as more businesses cope with extended lockdowns, now is the perfect time for businesses to take advantage of this system to manage any financial hardships.
“Small businesses are strongly encouraged to get on the front foot by lodging now and reaching out to the ATO – either online or by phone – for a tailored payment plan, if having difficulties meeting payment obligations. The ATO has told my office it is also introducing a system for payment plans in arrears to give small and family businesses a chance to get back on track rather than falling into default and having to start again.”Bruce Bilson, Small Business Ombudsman
New Government initiatives take effect
The start of the new financial year also signals the beginning of a series of new federal government initiatives for small businesses. From 1 July 2021, the tax rate for businesses with a turnover below $50 million has decreased from 26% to 25%. For unincorporated small businesses such as sole traders, the tax discount rate has increased to 16%.
Other initiatives that have come into effect include:
- Large businesses that are awarded government contracts valued above $4 million must now pay their suppliers with subcontracts of up to $1 million within 20 calendar days, or pay interest.
- R&D entities with an aggregated turnover of less than $20 million are now generally entitled to an R&D tax offset rate equal to their corporate tax rate plus an 18.5% premium.
- Automatic mutual recognition of occupational licences has come into effect across NSW, Victoria, the ACT and the Northern Territory.
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