The new treasurer Jim Chalmers handed down the 2024 federal budget on Tuesday, 9 May 2023. The major winners under this budget are people receiving welfare payments and there wasn’t too much for small business owners or investors to get excited about. Please find below our summary of the key changes.
Instant Asset Write Off
From 1 July 2023, the instant asset write off will be capped at $20,000 per asset. Small businesses will be able to claim the instant asset write off on multiple assets valued at $20,000 or less. This measure applies to businesses with a turnover of under $10 million.
Energy Incentive for Small Business
Businesses with an annual turnover of under $50 million will be able to claim an additional 20% deduction for eligible energy efficient assets including:
· Refrigeration assets
· Heating & cooling systems
Unfortunately, assets such as solar panels and electric vehicles are not included in this initiative. This new incentive applies to assets installed ready for use from 1 July 2023 to 30 June 2024.
Lodgement Penalty Amnesty
Small businesses with a turnover of less than $10 million will be entitled to a remission on failure to lodge penalties for outstanding tax documents lodged from 1 June 2023 to 31 December 2023. This applies to tax documents with a due date between 1 December 2019 to 28 February 2022.
Superannuation Guarantee (SG) Payments
From 1 July 2026, Superannuation guarantee payments will be required to be paid at the same time as wages are paid. This is a big change from only having to pay SG at the end of each quarter. When this measure comes in it will be essential to use a payroll solution like Xero with a built-in super clearing house.
New Superannuation Tax
From 1 July 2025, the Government will introduce a new tax on individual superannuation balances above $3 million. The tax rate will be 30% of the earnings of the fund over $3 million and includes unrealized capital gains. Currently no other taxpayers in Australia pay tax on unrealized capital gains.