By Chris Smith
Federal Budget – Key Takeaways
On 29 March, and with an election just around the corner, Treasurer Josh Frydenberg released the Federal Budget for 2022/23.
The budget included only a few announcements impacting SME business owners, which we have summarised below.
Included in this summary is a reminder of the upcoming end dates for covid stimulus measures from last year’s budget.
- Additional 20% deduction for small business entities for expenditure and purchase costs of depreciable assets (up to a cap of $100k) for costs up to 30 June 2023 (any costs from budget night to 30 June 2022 will be claimable in the FY 2023 year)
- Additional 20% deduction will be claimable for small business entities for costs incurred in providing external training courses for employees (claimed in FY 2023)
- Tax deductible RAT / PCR testing (related to attending work)
- Single Touch Payroll data sharing with the States (which will likely increase audit activity in relation to Payroll Tax)
- Temporary full expensing of depreciable assets will end on 30 June 2023 as originally announced last year (bear in mind, in order to have the full expensing, the assets MUST be installed and ready for use by 30 June 2023)
- Tax loss carry back (announced last year) will also end 30 June 2023
- LMITO increased to $1,500 (phases out at individual income of $126k)
- Temporary reduction in fuel excise (for 6 months)
- No changes to the future individual tax rate cuts (from previous budgets)
- Reduction in minimum pension drawdowns extended for 2023
- Super Guarantee – still scheduled to increase to 10.5% from 1 July (Note – the ATO is significantly increasing the ATO audit activity relating to Employee Super (SGC))
- Extension of the ATO Tax Avoidance Taskforce to 30 June 2025 (expect increased audit activity for HNW groups)
- PAYG Instalments – January 2024 to calculate estimated tax based on accounting software (we need to wait to see how this will play out, and how much access the ATO will require to your direct software live feed)
We will be considering all of the above, and much more during our annual tax planning process.
For more information on these budget announcements and potential planning opportunities, please do not hesitate to contact our office.
The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls WA before making any decision to discuss your particular requirements or circumstances.