|The Treasurer, Josh Frydenberg has handed down the Federal Budget. We have put together a summary of the key initiatives split by Business, Individuals and Superannuation.
Skills and training boost
The Government will introduce a skills and training boost to support small and medium-sized businesses to train and upskill their employees. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (i.e., Budget night) until 30 June 2024. Small and medium-sized businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.
Lowering tax instalments for small business
Normally, GST and PAYG instalment amounts are adjusted using a GDP adjustment or uplift. For the 2022-23 income year, the Government is setting this uplift factor at 2% instead of the 10% that would have applied.
The 2% uplift rate will apply to small to medium enterprises eligible to use the relevant instalment methods for instalments for the 2022-23 income year and are due after the amending legislation comes into effect.
Technology investment boost
The Government will introduce a technology investment boost to support digital adoption by small and medium-sized businesses. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (i.e., Budget night) until 30 June 2023.
Small and medium-sized businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20% of expenditure incurred on business expenses and depreciating assets that support their digital adoption (such as portable payment devices, cyber security systems or subscriptions to cloud-based services).
Modernising the PAYG instalment system
The Government will enable companies to choose to have their PAYG instalments calculated based on current financial performance, extracted from business accounting software, with some tax adjustments.
Reporting of Taxable Payments Reporting System data
The Government will provide businesses with the option to report Taxable Payments Reporting System data (via accounting software) on the same lodgment cycle as their activity statements.
Making COVID-19 business grants non-assessable non-exempt
The Government has extended the measures that enable payments from certain state and territory COVID-19 business support programs to be made non-assessable non-exempt income (‘NANE’) for income tax purposes until 30 June 2022
Sharing of Single Touch Payroll (‘STP’) data
The Government has committed to the development of IT infrastructure required to allow the ATO to share STP data with State and Territory Revenue Offices on an ongoing basis.
Increase to low and middle income tax offset (‘LMITO’)
The Government has announced a once-off $420 ‘cost of living tax offset’ for the 2022 income year, which will be provided in the form of an increase to the existing LMITO.
Temporary reduction in fuel excise
The Government will temporarily reduce the excise and excise-equivalent customs duty rate that applies to petrol and diesel by 50% for 6 months from Budget night.
Medicare levy low-income threshold increased
The Medicare levy low income thresholds for seniors and pensioners, families and singles will increase from 1 July 2021. For each dependent child or student, the family income thresholds increase by a further $3,619 instead of the previous amount of $3,597.
Tax deductibility of COVID-19 test expenses
The Government will ensure that the costs of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021.
Expanding access to employee share schemes
The Government will expand access to employee share schemes and further reduce red tape so that employees of all levels can directly share in the business growth they help to generate.
Home Guarantee Scheme extended
The Home Guarantee Scheme guarantees part of an eligible buyer’s home loan, enabling people to buy a home with a smaller deposit and without the need for lenders mortgage insurance. The Government has extended two existing guarantees and introduced a new regional scheme.
Digitalising trust income reporting
The Government will digitise trust and beneficiary income reporting and processing by allowing all trust return filers the option to lodge income tax returns electronically, increasing pre-filling and automating ATO assurance processes. This measure is proposed to commence from 1 July 2024, subject to advice from software providers about their capacity to deliver.
One-off $250 cost of living payment
The Government will make a $250 one-off cost of living payment in April 2022 to six million eligible pensioners, welfare recipients, veterans and eligible concession card holders.
Extending the reduction in minimum drawdowns
The Government will extend the 50% reduction of superannuation minimum drawdown requirements for account-based pensions (‘ABPs’) and similar products for a further year to 30 June 2023 (i.e., for the 2023 income year).
Further details on the budget can be found here
If you have any questions around any of the initiatives please reach out.