"Today's pre-budget announcements on removing the Fringe Benefits Tax (FBT) on employer-provided retraining and expanding access to small business tax treatment are important and sensible recalibrations of taxation arrangements that will have clear benefits for both employers and employees," Innes Willox, Chief Executive of the national employer association Ai Group said today.
"These measures are a welcome sign in the lead up to the Budget that the Government is open to making it easier to do business, invest and create jobs.
"The removal of FBT on employer-provided retraining and reskilling for redeployed employees is a timely response to a long-standing disincentive to work-related training.
"This measure, which applies from 2 October 2020 will remove the tax penalty on employer-provided efforts to upskill their employees to take on new roles. It will assist businesses bring their employees along as they adapt to a changing environment and new ways of doing business. It will boost job security and reduce costs for business.
"The related announcement that the Government will consult on the tax treatment of training undertaken at an individual's own expense is also welcome and has the potential to bring the tax treatment of self-funded training into line with the realities of life-long learning.
"In relation to the small business tax measures, the expanded access to the small business tax treatment announced by the Treasurer and Assistant Treasurer ahead of the Budget next Tuesday are welcome steps in simplifying tax arrangements, improving cash flow and reducing tax paperwork for businesses with annual turnovers of less than $50 million.
"The measures will be phased in from the start of the current fiscal year and the package of measures will apply in full from 1 July 2021.
"Eligible businesses will particularly welcome the exemption of eligible businesses from FBT on car parking and work-related electronic devices to apply from 1 April 2021. These measures are particularly relevant as eligible businesses and their employees adjust to working in the COVID-19 context.
"The expanded access to the simplified tax treatment for smaller businesses from 1 July 2021 will relieve eligible businesses from a range of complexities in tax compliance. This measure will free up the time of SME owners and should reduce their accounting costs," Mr Willox said.
