The Federal Budget 2021-22 is all about economic recovery, including tax cuts, business incentives and investment in training. Many changes in the budget can benefit individuals and business owners. We’ve summerised the budget into highlights for businesses, individuals and superfunds.
Budget highlights for businesses.
- Temporary full expensing measures extended until 30 June 2023 – eligible businesses can claim an immediate deduction for the total cost of depreciating assets.
- Temporary loss carry-back rules extended – eligible companies can carry back tax losses from the 2023 financial year to offset tax bills from 2019 onwards.
- Administrative appeals tribunal given the power to pause or modify ATO Debt recovery action – reducing the legal fees and red tape for small business.
- Tax cuts – small to medium company tax rates will reduce to 25% from 1 July as planned.
- Recognition of occupational licences – reduced regulatory burden for people who work across multiple states.
- Digital Economy Strategy whole of government plan – funding for digital cadetships, innovation investment incentives, e-invoicing, cyber security, overhaul of myGov and building small to medium business digital capacity.
One of the best budget round ups we’ve seen for small businesses is from Xero – check it out here.
Budget highlights for individuals.
- Personal income tax cuts – the low and middle income tax offset continues for another year.
- Medicare levy low-income thresholds increase
- Self-education expenses – full cost of eligible self-education can be claimed.
- Changes to work test – no longer required for non-concessional contributions and salary sacrifice, but still required for those aged 67-74 who want to make personal concessional contributions.
- Downsizer contributions – now allowed for people over 60.
- SMSF and residency – rules relaxed to allow concessional tax treatment for more people temporarily away from Australia.
- $450 monthly minimum for SGC – proposal to remove threshold for casual employees.