Tax Update Series – February 2023
Small Business Technology Investment Boost
Small businesses are able to deduct an additional 20% of the expenditure they incur for the purpose of digitising business operations. This may include portable payment devices, cyber security systems and cloud-based service subscriptions. The concession ends 30 June 2023 and has a cap of $100,000.
Small Business Skills and Training Boost
Small businesses are able to deduct an additional 20% of the expenditure that is incurred for the provision of eligible external training courses to their employees. There is no cap on expenditure however the training course must be provided by registered Australian providers. This concession is available until 30 June 2024.
Changes to Working From Home (“WFH”) Deductions
The ATO has refreshed the way that taxpayers claim deductions for costs incurred when working from home. Taxpayers can choose one of two methods, either the actual cost or fixed rate method. Only the fixed rate method is changing and applies from 1 July 2022.
The fixed rate has increased from $0.52 to $0.67 per hour.
The short cut method temporarily offered as a result of COVID-19 of $0.80 per hour is no longer available.
No matter which method you use, you must keep appropriate records. The ATO will accept a 4 week diary between 1 July 2022 to 28 February 2023 however from 1 March onwards, taxpayers will need to record the total number of hours worked from home.
For more information click here.
ATO’s warning on PAYG Instalments
The ATO is warning taxpayers that if PAYG instalments are varied and are less than 85 per cent of the annual actual tax liability, they might be liable to pay a general interest charge on shortfall.
Individuals or trusts – including sole traders – will automatically enter the PAYG system if they had instalment income (which includes investment and business income) from their latest tax return of $4,000 or more, tax payable on their latest notice of assessment of $1,000 or more and a notional tax of $500 or more.
A company or super fund will automatically enter the PAYG system if it had instalment income from its latest tax return of $2 million or more, a notional tax of $500 or more or was the head company of a consolidated group.
The information in this article is general in nature and should not be considered to be advice. Clients should not act solely on the basis of material contained in this article and we recommend formal advice be sought in relation to the issues contained in this document and their application to you and your individual circumstances.
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