Treasurer to unveil new tax break for business
Businesses giving their workers opportunities to retrain and upskill will be rewarded with a tax break, the Morrison Government has announced.
In a move to boost skills training as the economy rebuilds from the COVID-19 pandemic, Treasurer Josh Frydenberg has announced the exemption to fringe benefits tax (FBT), which comes into effect immediately.
The tax, which was introduced in 1986, had applied to businesses that provided training to workers that was not sufficiently connected to their role.
They were also hit with the 47 per cent tax if they trained employees for other prospective employment, if they were made redundant.
The new rules encourage employers to help workers transition to new employment opportunities within or outside their business.
Mr Frydenberg said the exemption made it easier and reduced the costs for businesses to retrain and upskill employees.
"As the Prime Minister has said, the jobs and skills we'll need as we come out of the crisis are not likely to be the same as those that are lost," he said.
"These changes will help more Australians find work as part of our plan for economic recovery.
Those who receive training by way of a salary packaging arrangement or through federally supported places at universities do not apply.
The Government will also consider changing arrangements for workers who undergo training at their own expense.
More than 43,000 businesses paid FBT in the 2018-19 financial year, generating $3.8 billion in revenue, according to Australian Taxation Office data.
In another new Budget measure, the Federal Government will provide $105 million in tax concessions to attract and retain workers as part of its COVID recovery plan.
Under the package, enterprises with an annual turnover between $10 million and $50 million will be able to access up to 10 small business concessions for the first time.
From July 1, eligible businesses will be able to immediately deduct certain start-up expenses and certain prepaid expenditure.
FBT-related concessions will start when the new taxation year begins on April 1, 2021.
Then, from July 1, 2021, the remaining concessions will begin and eligible businesses will also have a two-year amendment period apply to income tax assessments for the 2021-22 financial year and onwards.
Mr Frydenberg said allowing small businesses to keep more of what they earnt meant they could keep operating, pay their bills, and retain or hire more staff.
"Australia's more than 3 million small and medium businesses are the engine room of our economy, which is why reducing their tax burden is critical in ensuring they not only survive the crisis, but continue to invest, grow and create jobs as the economy recovers."
Originally published as Treasurer to unveil new tax break