Federal Budget 23/24 Highlights
Similar to the 2022/23 Federal Budget delivered in October, Tuesday’s 2023/24 Federal Budget was relatively light on tax reform and continued to focus on addressing cost of living pressures faced by individuals and families.
What’s included?
- Instant Asset Write Off for Small Businesses – Temporary Full Expensing will cease on 30 June 2023 and will be replaced by a $20,000 Instant Asset Write Off from 1 July 2023. This concession can only be accessed by small businesses with an aggregated turnover of less than $10 million.
- Small Business Energy Incentive – Businesses with an aggregated turnover of less than $50 million can get an additional 20% deduction on the cost of eligible depreciating assets purchased between 1 July 2023 and 30 June 2024 that support electrification and more efficient energy use. The incentive is capped at $100,000.
- Limiting Superannuation Tax Concessions – Previously announced on 28 February 2023, earnings relating to superannuation balances over $3million will effectively be taxed at 30% instead of the concessional 15%.
- Aligning Super Guarantee with Take Home Pay – From 1 July 2026, employers will be required to pay their employees’ super guarantee entitlements on the same day that salary and wages are paid.
- ATO Compliance Programs – As previously advised, increased funding will be provided to the Australian Taxation Office to continue and expand existing ATO Compliance Programs.
- Stage 3 Tax Cuts – No changes to the already legislated Stage 3 tax cuts for individuals to commence 1 July 2024.
What’s been scrapped?
- The Low and Middle Income Tax Offset (LMITO) ceased from 1 July 2022 and will not be extended.
- Loss Carry Back Tax Offset is due to expire on 30 June 2023.
- Reductions to minimum drawdown for superannuation pensions for 2023/2024.
The Federal Budget did not comment or provide clarification on the future of some important tax reform items such as reforms to Division 7A, trust reimbursement integrity rules (section 100A), the taxation of trusts and tax residency rules for individuals and companies.
Contact us if you would like to discuss how these updates may impact or benefit you or your business.