Tax Time 2023: What Business Owners Need To Know
As with all ending of financial years and beginning of new ones there are tax changes. Here is what you need to know to make the most of tax time 2023 and to get ready for 2024, including the recent budget announcements, which aren’t yet law.
Instant Asset Write-off
Temporary full expensing of assets will come to an end on 30 June 2023. It was announced in the 2023 Federal Budget that from 1 July 2023 the instant asset write-off threshold will be $20,000. This is a temporary measure for the 2023-2024 financial year only and the instant asset write-off will return to $1,000 threshold on 1 July 2024 unless it is extended or changed.
Super Guarantee Levy
From 1 July 2023 the Super Guarantee Levy is increasing from 10.5% to 11%.
Small Business Tech Investment Boost and Small Business Skills and Training Boost
These measures were announced in the 2022-2023 Federal Budget and still not law.
If the Small Business Tech Investment Boost is passed small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 percent of the expenditure incurred for the purposes of business digital operations or digitising its operations on business expenses and depreciating assets such as portable payment devices, cyber security systems or subscriptions to cloud based services.
Businesses may continue to deduct expenditure that is ineligible for the bonus deduction under the existing tax law.
An annual $100,000 cap on expenditure will apply to each qualifying income year. Businesses can continue to deduct expenditure over $100,000 under existing law.
This measure will apply to expenditure incurred in the period commencing from 7:30 pm AEDT 29 March 2022 until 30 June 2023.
If the Small Business Skills and Training Boost is passed, small businesses with an aggregated annual turnover of less than $50 million will be able to deduct an additional 20% of expenditure that is incurred for the provision of eligible external training courses to their employees by registered providers in Australia. Businesses may continue to deduct expenditure that is ineligible for the bonus deduction in accordance with the existing tax law.
This measure will apply to expenditure incurred in the period commencing from 7:30 pm AEDT 29 March 2022 until 30 June 2024.
Small business energy incentive
On 30 April 2023, the Australian Government announced it will provide businesses with an annual turnover of less than $50 million with an additional 20% deduction on spending that supports electrification and more efficient use of energy.
Eligible assets or upgrades will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024. This measure is not yet law.
The measure will help small businesses make investments like:
electrifying their heating and cooling systems
upgrading to more efficient fridges and induction cooktops
installing batteries and heat pumps.
Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.
You might also like to check out our blog Tax Time 2023: What individuals need to know and if you have an interest in super you might like our blog on Tax Time 2023: Super changes.
If you would like specific advice tailored to your business and circumstances, Accounting Heart offers affordable service packages where you can work with Sonia one-on-one to help you get your business where you want it to be. Book your FREE Discovery Call to find out more.
Disclaimer: This is general information only and is not advice of any sort. No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this blog. Readers of this blog should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.