May 2023 Federal Budget Overview
On Tuesday 9th May 2023, Jim Chalmers handed down the much-awaited 2023/2024 budget. The budget did not have any major tax changes, however there are a few areas highlighted below that we feel are valuable to you. Please note, until legislated these Federal Budget announcements are only proposed changes.
Small Business Instant Asset Write-Off
From 1 June 2023 to 30 June 2024, the Government will temporarily increase the instant asset write-off threshold from $1,000 to $20,000. This will be available to Small Businesses with an aggregated annual turnover of less than $10 million.
New Energy Incentive for Small Businesses
Small and medium businesses with an aggregated annual turnover of less than $50 million will be able to deduct an additional 20% of the costs on eligible depreciating assets that support electrification and more efficient use of energy. Up to $100,000 of the total expenditure will be eligible. The maximum bonus deduction is $20,000. Eligible assets need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
Increasing the frequency of superannuation guarantee payments
From 1 July 2026, employers will be required to pay their employees’ superannuation guarantee entitlements on the same day that they pay salary and wages.
Earnings for Superannuation balances above $3 million taxed at 30%
The Government will reduce the tax concessions available to individuals with a total superannuation balance exceeding $3 million, from 1 July 2025.
FBT Rules for Electric Vehicles
The eligibility of plug-in hybrid electric cars will be sunset from 1 April 2025 from the FBT exemption for eligible electric cars. This particular item has already been legislated – Treasury Laws Amendment (Electric Car Discount) Act 2022.
Extending the clean building managed investment trust withholding tax concession
The Government will extend the clean building managed investments trust (MIT) withholding tax concession to data centres and warehouses. For eligible new build-to-rent projects, where construction commences after 7:30pm (AEST) on 9 May 2023, the government has announced the following changes:
increase the rate for the capital works tax deduction to 4% per year; and
reduce the final withholding tax rate on eligible fund payments from managed investment trust (‘MIT’) investments from 30% to 15%.
As always, if you have any questions about any of the above, or wish to discuss how these items directly impact your personal situation, please don't hesitate to contact our office to discuss on 08 8523 0999 or admin@milaneseco.com.au.
Sources:
NTAA 2023/2024 Federal Budget Handout
Adviser Digest Budget Summary for Practising Accountants