Yesterday (9th August 2021) The ATO announced additional changes to the alcohol excise on take-away beer to give brewers some relief during lockdown. To learn more about these changes, visit https://www.ato.gov.au/business/excise-on-alcohol/excise-on-beer/ or speak to your accountant or trusted financial advisor to learn how you can benefit from these changes.
There has been a lot of buzz in the beer industry media about the increase to the excise refund cap, from $100,000 to $350,000 announced in the budget and what this means to craft brewers.
However, there are 2 other measures that deserve your attention and a call to your accountant to see how they can be applied to your business.
The first is ‘Temporary Full Expensing’. A big deal was made of the instant asset write off measures announced during covid, but many brewers were still suffering the financial effects of lockdown and weren’t in a position to take advantage of this scheme.
Temporary full expensing is essentially an extension of the instant-asset-write-off scheme with an extended time frame and no caps for many businesses. If you are considering buying new equipment or upgrading existing facilities now or in the next year or so, you should definitely speak to your accountant sooner rather than later to plan the most effective way make these business investments.
The second item to consider is the ‘Loss Carry Back Tax Offset. While brewers around the country have been bracing for the effects of lockdown, the government has approved This is probably the most overlooked because it has only been formalized on 25th June 2021. While many brewers have been facing significant business turmoil as the country enters extended lockdowns, the government has approved this measure which could prove a cash flow lifeline to many brewers
The general idea is that usually when your business makes a loss, you carry that forward and when your business makes a profit you can offset that profit against the carried forward loss to reduce your tax.
With the loss carry back tax offset, if your business has made profits in the past and you paid tax on these, and then you made a loss in this financial year, you could offset the loss this year, against previous profits and claim back the taxes you paid in prior years.
This could give you a cash flow boost NOW that can be used to give immediate benefit to your business.
For more information about this program visit https://www.ato.gov.au/business/loss-carry-back-tax-offset/
We encourage you to contact your accountant as soon as possible to discuss if your business is eligible for these programs and the benefits they can bring to you.