By Joe Smith
The increase in the low and middle income tax offset from $1,080 to $1,500 will be welcomed by business owners and individual taxpayers alike. And the cut in fuel excise of 50% for a period of 6 months will also help businesses currently experiencing higher costs from running vehicles and equipment that run on fuel and hopefully it will help reduce freight costs which have also increased lately.
An additional 20% in tax deductions for training expenses for employees (not including in house or on the job training) as well as for investment in digital technologies, up to $100,000, will also be available to businesses. This is an effort by the government to invest money back into employees and also move more businesses into cloud-based technologies.
As expected, any costs related to COVID 19 testing will now be deductible for businesses and this has been backdated to 1 July 2021 so make sure that you have copies of those receipts for RAT tests!
One of the big-ticket items not mentioned in the budget is the instant asset write off which continues to be available to businesses until 30 June 2023. If you purchase an eligible asset you can claim the full amount as a tax deduction in the year of purchase. This is compared to spreading the deduction over several years by claiming depreciation.
As a result, businesses will pay less tax in the year they purchase the asset however they need to be aware that their taxable income may be higher in following years due to the deductions for assets previously being claimed.
One other thing to keep in mind is the increase in Superannuation Guarantee on wages which moves from 10% to 10.5% on 1/7/22.
If you would like more information on the budget or on tax deductions for your business please call UHY Haines Norton on 4972 1300 or email info@uhyhncq.com.au