Federal Budget 2023 and how it effects small business

Small Business Instant Asset Write-Off

Small businesses, with a turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 inc. GST that are first used or installed ready for use between 1 July 2023 and 30 June 2024.

Note: This replaces the current asset write off that is unlimited until June 30th 2023.

Small Business Energy Incentive

The Government is introducing a tax break to help small businesses electrify and save on your energy bills. Businesses with annual turnover of less than $50 million will have access to a bonus 20% tax deduction for eligible assets supporting electrification and more efficient use of energy, from 1 July 2023 until 30 June 2024.

Small Business Tax Lodgement Penalty Amnesty

This new amnesty will apply to small businesses with a turnover of less than $10 million to encourage them to re-engage with the tax system. No Penalties for Certain Overdue Tax Lodgements. A small business will not be charged failure-to-lodge penalties for outstanding tax lodgements that are lodged between 1 June 2023 and 31 December 2023 that were originally due between 1 December 2019 to 29 February 2022.

Cost of living relief for small business

A big focus of the budget has been measures to ease the cost of living pressures. Some relief in this area has also been offered to small businesses in the form of an energy rebate of up to $650 per annum. This will be delivered as a reduction in electricity bills to eligible businesses.

Fringe Benefits Tax (FBT) exemption for plug-in hybrid electric cars

The FBT exemption for plug-in hybrid electric cars will end on 1 April 2025. Any arrangements entered into between 1 July 2022 and 31 March 2025 will continue to remain eligible for the FBT exemption. The current FBT exemption for Hydrogen and Battery Electric Vehicles is expected to remain in place.

Article supplied by Board Member - Mark Cunningham.