With the implications of the increase to the small business turnover test and the circulation of Fringe Benefit Tax (‘FBT’) being called out date and old fashioned, we all wonder how long FBT will be around for.

The increase of the small business entity turnover threshold has been increased from $10 million to $50 million from 1 April 2021.  It will also be exempt from the 47 per cent fringe benefit tax on car parking benefits provided to employees if the parking is not provided in a commercial car park.  In addition multiple work-related portable electronic devices provided to employees will be exempt from FBT, even if the devices have substantially identical functions.

As of 1 July 2020, an immediate deduction may be given for newly eligible businesses for start-up expenses, such as professional, legal and accounting advice.  Furthermore certain prepaid expenditure where the payment covers a period of 12 months or less which ends in the next year is also eligible for an immediate deduction.  The 2022 financial year has many changes ahead of us, with eligible businesses being able to access simplified trading stock rules, remit pay-as-you-go (‘PAYG’) instalments based on GDP adjusted notional tax, and settle excise duty and excise-equivalent customs duty monthly on eligible goods.

The ATO have also lowered the four-year amendment period for eligible business to be a two-year amendment period for income tax assessments for income years starting 1 July 2021.  In addition, the 2022 financial year will see the Commissioner of Taxation’s power to create a simplified accounting method determination for Goods and Services Tax (‘GST’) purposes will be expanded to apply to businesses below the $50 million aggregated annual turnover threshold.

Presently FBT is payable if an employer provides training to its employees that is not sufficiently connected to their current employment.  FBT will now see an exemption for employers-proving retraining and reskilling for employees.  It will apply for employees who are redeployed to a different role in the business and the exemption will apply from 2 October 2020.  The FBT exemption will encourage employers to help workers transition to new employment opportunities within or outside their business.  It does come with an exception that it will not extend to retraining acquired by way of a salary packaging arrangement or training provided through Commonwealth supported places at universities, which already receive a benefit.

However another significant potential change is a Government consultation on current arrangements for workers who undertake training at their own expense to deduct retraining/reskilling for future employment. As at the moment the deductions are limited to training related to their current employment.  If this change does go through, the deduction of reskilling for a potential job offer could potentially be deductible.  All we can do is wait and see what the 2022 financial year brings us.