There are so many changes around taxation this year. Accountant GAIL FREEMAN offers a summary of the significant ones that could impact business tax returns.

Temporary full expensing – ends on June 30. This measure applies to businesses with a turnover of less than $5 billion. It allows the business to claim an outright deduction for the full cost of assets costing up to $150,000. Usually the cost of the asset is written off over the estimated useful life of the asset. So if you want to buy that new vehicle or item of plant, now is the time. Just a note that the item has to be installed ready for use by June 30.

The loss carry back provisions – are also set to end on June 30. This provision allows a company with turnover of less than $5 billion to carry a loss back to a year when the company paid income tax within the last five years. So 2019 is the earliest year that you can carry a loss back. If you prefer you can choose to carry your loss forward. If you use this measure then you can either receive a refund, reduce your tax liability or reduce a tax debt that you have.

Superannuation guarantee – increases to 11 per cent from July 1. If you are looking for deductions, why not pay your quarterly super before June 30? This will give you a deduction this financial year as you only get the deduction for this item when you pay it, even if you use accrual accounting. Just a reminder that in the federal budget there was a proposal that from July 1, 2026, super guarantee will need to be paid at the same time as salaries, this is not yet law.

Trust distributions – need to be prepared in accordance with the provisions of the trust deed and signed before June 30. Also note that changes to distributions may be required.

Rental property insulation – If you own a rental property in the ACT that has no insulation or insulation less than R2, it will have to be insulated with R5 insulation. You have until November 30, 2026, to do this. If you sign a new lease you have nine months to fix it and all property advertisements from April 1 have to state whether the property meets the minimum insulation standard.

Other budget announcements (not yet law)

Instant asset write off new threshold – A small business can immediately write off assets costing less than $20,000, with turnover of less than $10 million. More expensive assets have to be depreciated.

Small Business Energy Incentive – For a small business, investing in energy technology, turnover less than $50 million, there is an additional 20 per cent deduction for expenditure that supports more efficient use of energy.

Small business lodgment penalty amnesty – If you have business turnover less than $10 million and have not lodged tax returns or business activity statements that should have been lodged from 1 December 1, 2019, to February 28, 2022, and you do not control more than $5 million of net wealth, your penalties will be remitted automatically when you lodge between June 1, 2023, and December 31, 2023. That leaves you seven months to get your lodgments up to date.

Changes to PAYG installments – From the September 30 quarter and throughout the 2024 income year the uplift factor used to calculate your installments will be reduced from 12 per cent to 6 per cent giving businesses cash flow relief.

If you have questions on these changes the experts at Gail Freeman & Co can help. Call 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer: This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.
Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.