<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Small businesses will be able to claim tax refunds on income losses under a suite of new measures outlined in the </span><a href="https://www.9news.com.au/federal-budget" rel="" target="_blank" title="federal budget"><span>federal budget</span></a><span> aimed at giving the struggling sector a boost.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government announced tonight it is reintroducing a two-year loss carry back policy, set to take effect from July 1 this year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It was last in effect during the COVID-19 pandemic, and Treasury figures showed it supported more than 70,000 companies, 95 per cent of which had less than $10 million in turnover.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>LIVE UPDATES: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-live-updates-jim-chalmers-latest-politics-news-headline/f09409ce-c24e-4941-91e5-b797305ed61f" rel="" target="_blank" title=""><strong><span>Treasurer unveils 'most important budget in decades'</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-winners-losers-workers-first-home-buyers-property-investors-ndis/55ede4e3-2ea7-4315-93f9-0f08ca98d2b3" rel="" target="_blank" title=""><strong><span>The winners and losers from the federal budget</span></strong></a><span></span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The now-permanent measure outlined in the budget will allow businesses with up to $1 billion in turnover who make a loss in the current income year to use that loss to get a refund against tax paid in the prior two income years.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This will couple with the government permanently extending the $20,000 small business instant asset write-off, meaning any small businesses who make a business-related purchase of less than $20,000 can immediately deduct that amount from taxable profit.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/national/federal-budget-2026-tax-refunds-offered-to-small-business-losses/db4828b2-8887-4873-a35c-738c4dbea424" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>That particular benefit is only available to businesses with turnover of under $10 million.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>REFORM REVEALED: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-changes-to-negative-gearing-capital-gains-tax-discount-explained/0a2e7bcf-5c7b-42bc-88d1-788c34aa9eb2" rel="" target="_blank" title=""><strong><span>Chalmers takes a razor blade to negative gearing and CGT discount</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>TAX OFFSET: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-government-unveils-250-dollar-tax-relief-minimum-tax-on-wealth-trusts/885f4657-b89b-431d-8f0d-330459a1dfe9" rel="" target="_blank" title=""><strong><span>More than 13 million Aussies to get $250 tax bonus</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In one of the Treasury's nuts-and-bolts explainers about how it worked, it posted the example of a hypothetical coffee shop that generated $40,000 taxable income and paid $10,000 tax for 2025-26.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In 2026-27, the coffee shop decided to expand, purchasing a new coffee machine for $19,000, new tables and chairs for $19,000, and outdoor heaters for $17,000.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>All these assets were immediately deducted from the $40,000 taxable income for the year, allowing the coffee shop owners to report a $15,000 tax loss.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-whats-in-budget-for-different-generations/1bd719f1-f052-4915-93c4-5d541011b533" rel="" target="_blank" title=""><strong><span>Is this budget for the kids? What's on offer for boomers through to Gen Alpha</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Not only, therefore, do they pay no tax for 2026-27, but they can carry that back to the tax paid last financial year, and receive a refund of $3750 - based on the 25 per cent tax rate against their $15,000 loss.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The measure is at the heart of what the government says is $3.5 billion worth of measures aimed at supporting small businesses in the budget.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It's estimated the loss carry back policy will cost the government $2.3 billion from 2027-28, to 2029-30.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/federal-budget-2026-nightmare-scenario-for-australians-if-middle-east-war-continues/886d30df-d354-4f3d-a538-498595984a98" rel="" target="_blank" title=""><strong><span>Budget reveals Australia could be on verge of being hit by nightmare scenario</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government believes that the policy will benefit up to 85,000 businesses.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Meanwhile, the government has boasted that the small business write-off will cut a collective $32 million from compliance costs, and save 366,000 hours on record keeping.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This is about tax relief and tax reform to make our economy work for more Australians, businesses and future generations," Treasurer Jim Chalmers said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Start-ups are the recipients of similar support, with loss refundability for them arriving in 2028-29.</span><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government will also work to attract more venture capital down under, by increasing some asset caps for global and local investors - including super funds.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It says the collective aim of these measures is to encourage investment, "sensible" risk-taking, and innovation for a more "dynamic and resilient" economy.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>To this end, the government has flagged big cuts to "red tape" and regulatory costs it claims will deliver businesses $10.2 billion a year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>A $7.6 billion expansion of the government's Trusted Trader program will allow small businesses to deliver more efficient exports to markets such as the European Union, with whom Australia signed a recent trade agreement.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><em><span>NEVER MISS A STORY:</span></em></strong><strong><span> </span></strong><em><span>Get your breaking news and exclusive stories first by following us across all platforms.</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><ul><li><strong><em><span>Download the 9NEWS App here via</span></em></strong><strong><span> </span></strong><a href="https://apps.apple.com/au/app/9news/id1010533727" target="_blank"><strong><em><span>Apple</span></em></strong></a><strong><span> </span></strong><strong><em><span>and</span></em></strong><strong><span> </span></strong><a href="https://play.google.com/store/apps/details?id=nineNewsAlerts.nine.com&amp;hl=en_AU&amp;pli=1" target="_blank"><strong><em><span>Google Play</span></em></strong></a><strong></strong></li><li><strong><em><span>Make 9News your preferred source on Google by</span></em></strong><strong><span> </span></strong><a href="https://9.nine.com.au/8x987w" target="_blank"><strong><em><span>ticking this box here</span></em></strong></a><strong></strong></li><li><strong><em><span>Sign up to</span></em></strong><strong><span> </span></strong><a href="https://login.nine.com.au/edm?client_id=nineatnine" target="_blank"><strong><em><span>our breaking newsletter here</span></em></strong></a><strong></strong></li></ul></div></div>