Are you ready for the upcoming financial year? Several changes have now taken effect from July 1, 2023, potentially impacting your business.
Here’s an overview of some key updates:
- Tax changes: The Federal Government’s May 2023 budget introduced temporary increases and extensions to the instant asset write-off. Small and medium-sized enterprises (SMEs) with a turnover of less than $10 million can now deduct the full cost of eligible assets valued under $20,000 in the 2023–24 tax year. This threshold applies per asset, allowing SMEs to write off multiple assets. However, the purchases must be installed and ready for use between July 1, 2023, and June 30, 2024. Unfortunately, the loss carry-back provisions, which enabled carrying back losses to previous years, will no longer be available from July 1.
- Energy cost relief: Starting July 1, the Small Business Energy Incentive comes into effect. SMEs with an annual turnover under $50 million can benefit from an additional 20% deduction on expenditures supporting electrification and energy-efficient practices. Up to $100,000 of total spending qualifies for this incentive, with a maximum bonus tax deduction of $20,000 per business. To be eligible, assets or upgrades must be used, installed, or ready for use between July 1, 2023, and June 30, 2024. The Energy Price Relief Rebate will also commence from July 1, providing eligible SMEs with up to $650 to alleviate the impact of rising power costs.
- PAYG and GST: The PAYG and GST GDP adjustment factor will be set at 6% for the 2023–24 financial year, offering cash flow assistance to SMEs. Businesses must already meet the existing PAYG and GST instalment eligibility thresholds: $10 million in aggregated turnover for GST instalments and $50 million in aggregated turnover for PAYG instalments.
- Impact on employees: The Superannuation Guarantee rate will increase from 10.5% to 11%, necessitating updates to your payroll systems. Additionally, the cap for small claims proceedings under the Fair Work Act will rise from $20,000 to $100,000, expanding access to dispute resolution through small claims court for more workers. Changes in this area aim to reduce costs and complexity for SMEs handling such claims. Moreover, the current entitlement of 18 weeks of paid parental leave will merge with the existing dad and partner pay entitlement of two weeks, allowing couples to claim up to 20 weeks of paid parental leave between them. Single parents can access the full 20 weeks, subject to a $350,000 family income limit.