Federal Budget 2022/23
- Rod Western
- Mar 31, 2022
- 2 min read
The Federal Budget 2022/23 was announced on the 29th March 2022. Below are some of the items affecting small businesses and business owners.
Assuming there is no change of Government in the upcoming election, these announcements will need to be passed by both houses of parliament before they become law, so changes may still occur.
Further information can be found here;
LMITO
The temporary Low and Middle Income Tax Offset will increase to a maximum of $1,500 for the 2022 Financial Year. This will offset tax, but not necessarily result in a cash refund.
Small Business Deduction Boost
Businesses with turnover less than $50 million can deduct an additional 20% of the cost of eligible external training courses for employees, and costs of adoption of digital technology.
Training – Eligible external training courses must be provided to employees in Australia. In-house training and on-the-job training are excluded. Eligible expenses must be incurred from 7:30pm (AEST) 29th March 2022 to 30th June 2024. Expenditure between 29th March 2022 and 30th June 2022 will be eligible for the 20% boost deduction in the 2023 Financial Year tax return, not the 2022 Financial Year tax return. Expenditure after that will be eligible in the year it is incurred.
Digital Technology - Expenditure may include portable payment devices, cyber security systems, subscriptions to cloud-based services. There is an expenditure limit of $100,000 per year. Eligible expenses must be incurred from 7:30pm (AEST) 29th March 2022 to 30th June 2023. Expenditure between 29th March 2022 and 30th June 2022 will be eligible for the 20% boost deduction in the 2023 Financial Year tax return, not the 2022 Financial Year tax return. Expenditure after that will be eligible in the year it is incurred.
PAYG Instalments
Companies will be allowed to base their PAYG Instalments (income tax instalments) on current profit extracted from business accounting software. This requires software updates so may not start until January 2024.
Taxable Payments Reporting
Business that lodge Taxable Payment Reports (reporting of certain contractor payments) will have an option to report on the same lodgment cycle as their BAS instead of annually, using accounting software. This requires software updates so may not start until January 2024.
Super Guarantee
No changes to Super Guarantee rates were announced. They will still increase to 10.5% from 1st July 2022.
No change has been made to the removal of $450 eligibility threshold for Super Guarantee from 1st July 2022.
Super Pension Drawdown
The temporary 50% reduction in minimum super pension payments will be extended for the 2023 Financial Year.
Apprentice Wage Subsidy
Boosting Apprenticeship Commencement and Completing Apprenticeship Commencements wage subsidiaries will be extended to 30th June 2022.
A new Australian Apprenticeships Incentive System will start 1st July 2022. Further information is here;
COVID-19 Test expenses
Costs of taking a COVID-19 test to attend a workplace are tax deductible from 1st July 2021. Receipts will need to be kept.
No Fringe Benefit Tax is payable by businesses if tests are provided to employees for work purposes.
ABN Annual Review
ABN details will need to be confirmed each year through the Australian Business Registry Service. No start date has been announced for this.
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