Budget Updates 2023/24
Federal Budget 2023/24
The Federal Budget 2023/24 was announced in early May. The below announcements have not been legislated and may change. Check with your accountant for more information.
Instant Asset Write Off
The Instant Asset Write Off threshold for 2024 Financial Year will be $20,000. Certain business assets costing under $20,000 which are installed and ready to use between 1st July 2023 and 30th June 2024 will be eligible for an immediate tax deduction. To be eligible, a small business must have an aggregated turnover of less than $10 million in the previous or current income year.
Payday Super
Superannuation Guarantee will be payable at the same time as salary and wages from 1st July 2026.
This will increase the compliance cost for businesses that use the ATO Super Clearing House. We encourage clients to use bookkeeping software such as MYOB, Xero, Quickbooks, Reckon, or Sage to reduce this cost to business.
Small Business Energy Incentive
For small businesses, a bonus 20% tax deduction is available for eligible expenditure that supports electrification and more efficient use of energy. This incentivises the move away from gas use. The deduction is capped at $100,000 expenditure, with a maximum bonus tax deduction of $20,000. Eligible assets or upgrades must be first used or installed ready for use between 1st July 2023 and 30th June 2024.
To be eligible, the business must have an aggregated turnover of less than $50 million in the previous or current income year.
Investments may include heating and cooling systems, upgrading to more efficient fridges and induction cooktops, installation of batteries and heat pumps. Electric vehicles, renewable electricity generation assets, capital works, and other exclusions apply.
Build to Rent Projects
The depreciation rate will increase from 2.5% to 4% for eligible new build-to-rent projects starting construction after 9th May 2023.
ATO Compliance and Audits
Additional funding will be provided to the ATO to target GST compliance, personal tax return compliance, and Super Guarantee compliance. The ATO has flagged rental properties as high risk for mistakes, so audits on this area are likely to increase. Taxpayers should consider any private use of their rental properties, and be aware that withdrawals from investment loans for personal use will change the tax deductibility of the interest.
Further information can be found here;
Or speak to your accountant.
Previously Announced Measures
Legislated
The following announcements from previous budgets have now been legislated.
FBT Exemption for Electric Vehicles
Eligible zero or low-emissions vehicles first used on or after 1 July 2022 are exempt from Fringe Benefits Tax. Eligible vehicles must have an original cost under the Luxury Car Limit, currently $84,916.
Working from Home Deductions
The Fixed Rate method for calculating Home Office Deductions has changed from 1st March 2023. The new rate of 67 cents per hour covers electricity, gas, phone usage, internet, stationery, and computer consumables. Previously a four-week log or diary was sufficient to calculate the hours worked at home. From 1st March 2023 the ATO requires a full record of all hours claimed. This could be timesheets, roster, diary, or time logs.
There are no changes to the Actual Cost method. A four-week log or diary is required to show how the work percentage was calculated, and bills must be kept for all expenses claimed with details of how you calculated the claim.
Tax Rates
Stage 3 Tax Cuts are still legislated to start 1st July 2024.
The temporary increase to Low and Middle Income Tax Offset won’t be extended for the 2023 Financial Year.
Not Legislated
The following announcements from previous budgets have not been legislated. They are expected to be debated in parliament soon.
Skills and Training Boost
For small businesses, a bonus 20% tax deduction will be available for eligible expenditure on external training provided to their employees.
Technology Investment Boost
For small businesses, a bonus 20% tax deduction will be available for eligible expenditure on expenses and depreciating assets for digital operations or digitising their operations.
State Budget 2023/24
The WA State Budget 2023/24 was also announced in May. The below announcements have not been legislated and may change. Check with your accountant for more information.
Electricity Credits
Small businesses will receive a $650 credit on their electricity bills.
Construction Sector
The Base Employer Grant will increase from $10,000 to $12,000 for apprentices.
The Group Training Wages Subsidy will be expanded to include residential and commercial construction sector apprentices.
Further information can be found here;
Or speak to your accountant.
