A quick recap as JobKeeper 2.0 has been announced. Time is starting to run out for instant deductions on plant purchases.
JobKeeper has been extended with payments now continuing for qualifying businesses until July 2021. There has been changes made where there is now 2 separate rates and entities will need to pass a decline in turnover test each quarter.
To qualify for JobKeeper post September through to December 2020 you need to satisfy the decline in the turnover test for only the September quarter. The JobKeeper payment rates will also decrease where employees working less than 20 hours will receive $750 per fortnight and employees being employed for more than 20 hours will receive $1,200 per fortnight.
To qualify for JobKeeper beyond December 2020 through to March 2021 you will only need to satisfy the decline in turnover test for the December 2020 quarter. Payments are reduced again with employees working less than 20 hours receiving $650 per fortnight and over 20 hours receiving $1,000 per fortnight.
Businesses that qualified under the eligible business participant rule are still included in the extended JobKeeper but will need to pass the new turnover tests as well to continue receiving payments.
To determine whether businesses qualify for the higher JobKeeper payment rate you will need to look back at hours worked by eligible employees or business participants in February 2020.
The $150,000 instant asset write off is now into its final 6 months. Remember this can be for new or used equipment and it is $150,000 GST excl per item of plant. There is no cap on the number of items of plant that a business can purchase under this arrangement. The equipment must be installed and ready for use and paid for by the 31 December 2020 to qualify.
Accelerated depreciation applies to new assets only, with a value of more than $150K, and is in place until June 2021. It allows you to deduct 57.5 percent of the purchase price of the asset in the first year. Again, this is per item of plant and there is no cap on number of items purchased. The plant will also have to be installed and ready for use and paid for by the 30 June 2021 to qualify.
As always, seek advice from your accountant to ensure you qualify for the above.
HOW CAN RSM HELP?
If you are impacted by the proposed changes to the JobKeepeer program and require further guidance please contact your local RSM office.