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2023 Budget Update

As we approach the one-year anniversary of the new Albanese Government, there were hopes, or some fears, that the approach of the new Government would be significantly different to the prior Government, and that as a result, we would see a substantially different budget with major changes in tax policy.

We can report that there were no major taxation changes in this budget, aside from changes to superannuation, which had already been announced. Whilst major spending announcements were made in areas of welfare, health and social services, we will leave the political commentators to dissect these and instead focus on the budget’s impact on small businesses in North Queensland.

Temporary Full Expensing/Instant Asset Write Off

The current temporary full expensing of assets ends on 30 June 2023. To be eligible for this, businesses will need to purchase a qualifying asset and have it installed ready for use by 30 June 2023. For vehicles, plant and other like assets this means taking delivery on or before 30 June 2023.

Going forward, the Government has announced a more modest write off incentive to replace the current temporary full expensing. From 1 July 2023 to 30 June 2024, the Government will allow an immediate write off of assets purchased up to a value of $20,000. To qualify, businesses must have a turnover of less than $10m.

Small Business Energy Incentive

Businesses with an annual turnover of less than $50m will be able to claim 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.

Other measures announced

Other budget measures that may impact businesses include:

An amnesty will be provided to small businesses with less than $10m in turnover to encourage them to get tax lodgements up to date. The ATO will remit failure-to-lodge penalties for outstanding tax returns lodged in the period from 1 June 2023 to 31 December 2023 that were originally due between 1 December 2019 to 28 February 2022.

FBT exemptions will be available for plug in hybrid electric vehicles to 1 April 2025. After this date exemptions will only be available for electric vehicles.

The capital works deduction for build to rent properties will be increased from 2.5% to 4% for new builds, which will commence after 9 May 2023.

If you feel any of these changes will impact you or your business, please give the Halpin Partners team a call on (07) 4052 0800 to discuss how to get the best tax outcomes.

Shaun Donaldson,

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