2023 – 2024 Federal Budget Announcement

Last night’s 2023/24 Federal Budget announcement did not deliver any major surprises, but there are a number of key announcements. We have summarised the key issues below. If you need to discuss your specific circumstances, our team is ready to speak with you about your situation.

Stage 3 Tax Cuts:

The budget did not announce any changes to the legislated stage 3 tax cuts set to commence 1 July 2024. To recap – these tax cuts will see the tax rate for taxable income between $45,001 & $200,000 reduced to 30% (Previously 32.5% to 45%) with the 45% tax bracket kicking in at taxable income in excess of $200,000 (previously $180,000). Tax rates for the 2023 & 2024 financial year have remained unchanged.

 

Tax Rates & Income Thresholds
 Marginal Tax Rate  Income Brackets 23 & 24 Financial Years  Income Brackets from 1 July 2024
 NIL  $ 0 – $ 18,200  $ 0 – $ 18,200
 19 %  $ 18,201 – $ 45,000  $ 18,201 – $ 45,000
 30 %  N/A  $ 45,001 – $ 200,000
 32.5 %  $ 45,001 – $ 120,000  N/A
 37 %  $ 120,001 – $ 180,000  N/A
 45 %  $ 180,001 +  $ 200,001 +
 Please note the above rates do not include the Medicare levy of 2%

Instant Asset Write-off:

Previously an unlimited amount, it was announced last night that the small business instant asset write-off will now be capped at $20,000.

This incentive affects small businesses with an aggregated annual turnover of less than $10m and will allow them to immediately claim a tax deduction for the full cost of eligible assets with purchase price of less than $20,000. It relates to assets that are first used or held ready for use between 1 July 2023 and 30 June 2024 and applies to each asset – meaning that eligible businesses can instantly write off multiple assets under the $20,000 limit in the year. Further conditions apply.

Low and Middle Income Tax Offset:

It was confirmed that the Low and Middle Income Tax Offset (LMITO) will not be extended past the financial year ended 30 June 2022. LMITO was brought in for the 2018-2019 – 2021-2022 tax years and offered up to $1,500 in income tax relief for those earning $126,000 or less.

‘Build to Rent’ Capital Works Deduction:

The capital works tax deduction rate for eligible new construction will increase from 2.5% to 4% under the ‘Build to Rent’ tax initiative to increase the supply of rental housing. Eligible construction includes projects of 50 or more apartments or dwellings that are made available for rent to the general public under minimum 3-year lease terms. The properties must be retained under single ownership for a minimum of 10 years.  This incentive will benefit property developers and residential accommodation providers.

Small Business Amnesty:

Small businesses (business entities with turnover of < $10m per annum) will be able to lodge historically late Income Tax Returns and BAS without fear of fear of fines for late lodgement, if they are lodged by 31 December 2023. Note that interest on any outstanding taxes will still apply.

We expect this will apply to:

  • Tax returns for the 2019, 2020, and in some circumstances 2021 financial years
  • BAS for the quarter ended 31 December 2019 through to the quarter ended 31 December 2021, inclusive.

Fringe Benefits Tax Exemption on Electric Cars:

Last year, the government introduced a fringe benefits tax exemption for eligible electric cars held and ready for use on or after 1 July 2022. The budget papers confirmed that this exemption will cease to apply for plug-in hybrid electric vehicles from 1 April 2025 (except where the use of the vehicle was exempt before that date, and there is a financially binding commitment to continue providing private use of the vehicle from that date). The exemption will continue to apply for other eligible electric vehicles, such as battery electric vehicles and hydrogen fuel cell electric vehicles. The government will review the policy again in 2025.

Small Business Energy Incentive: 20% Bonus Deduction:

This incentive will provide businesses (with an annual turnover of less than $50 million) an additional 20% deduction on spending that supports electrification and more efficient use of energy. It will apply to a range of depreciating assets, as well as upgrades to existing assets that are first used or installed ready for use between 1 July 2023 and 30 June 2024. Up to $100,000 of total expenditure will be eligible for the incentive, with the maximum bonus tax deduction being $20,000 per business.

Assets included are assets that upgrade to more efficient electrical goods such as energy-efficient fridges, assets that support electrification such as heat pumps and electric heating or cooling systems, and demand management assets such as batteries or thermal energy storage.

As always, certain exclusions will apply, such as electric vehicles, renewable energy generation assets, capital works and assets that are not connected to the electricity grid and use fossil fuels. Full details of eligibility criteria are yet to be finalised.

Payments of Super during Payrun:

As announced last week, employers will now have to pay their employees superannuation at the time as they pay their wages, rather than paying them each quarter. This is due to come into effect from 1 July 2026. There is not much information available on this change at the moment, but the government has stated that they will spend the second half of 2023 consulting with industry stakeholders with a final plan to be announced in the 2024-2025 budget.

Superannuation Pension Drawdowns:

The temporary 50% reduction in the minimum annual payment for superannuation pensions that was introduced during COVID has not been extended. This means that from 1 July 2023, members will need to ensure they meet their minimum pension requirements under the new drawdown amounts. Below is a table of the COVID-introduced draw down requirements compared to the new drawdown requirements.

Age of Beneficiary Minim Drawdown
  Current (COVID Introduced) From 1 July 23
0-64 2.00% 4.00%
65-74 2.50% 5.00%
75-79 3.00% 6.00%
80-84 3.50% 7.00%
85-89 4.50% 9.00%
90-94 5.50% 11.00%
95 + 7.00% 14.00%

Super Changes for Members with Account Balances > $3M:

In February 2023, the Federal Government foreshadowed changes to the taxing treatment of income arising from Superfund member balances greater than $3M.

The Budget, whilst confirming the Government’s intention to implement the strategy, has provided no further details on the plan.

The key details as previously announced are:

  • Applies to Superfund Member balances exceeding $3M
    • Members balance will cover multiple funds, and
    • is proposed to include unrealised gains and losses.
  • Superfund tax is currently 15% in the accumulation phase. This will continue.
  • Additional tax is to be applied at 15% on earnings on the portion of member balance that exceeds $3M

The proposal is likely to affect 80,000 people, according to Government papers.

– Ian Hogbin, James Davis, Catherine Stojcevska & Brad Sheaves

Posted 10 May 2023

What Our Clients Say

Everyone I dealt with at HQB was lovely and helpful, especially Amelia. The process was easy and less stressful than I had anticipated. Highly Recommended!
Bonnie Earle
Bonnie Earle
02:33 04 Aug 23
Brad has been integral to the development and growth of JMS Allied Services. The service provided by Brad and the team at HQB is a unmatched.
JMS Allied Services
JMS Allied Services
04:55 28 Jul 23
A huge thank you to James and HQB for so willingly and efficiently completing the audit for CWA Bellingen Branch finances. We appreciate your work and generosity very much. It's so encouraging to have businesses such as yours contributing to the work of community organisations such as CWA. Thank you!
Bill & Robyn Hawkshaw
Bill & Robyn Hawkshaw
05:20 21 Oct 22
James, Brianna and the HQB team are amazing. Always answer my questions promptly and guide me in running my business. Highly recommend.
Kylie Dean
Kylie Dean
23:42 18 Sep 22
We had been with our previous accountant for over twenty-five years, leaving them was a hard decision. However, the transition to HQB was done professionally and with ease by Brad Sheaves and his team. We have not regretted the move at all. We receive regular contact from HQB and this contact is not just a broadcasted newsletter e-mail, but telephone calls and correspondence from Brad. His advice is concise, relevant to our situation and very appreciated. Highly recommend Brad Sheaves and the HQB team.
Glenys Whitfield
Glenys Whitfield
00:46 07 Sep 22
Rachel was amazing, so professional and made the whole experience an amazing experience definitely be back next year
Marcus Develyn
Marcus Develyn
02:56 18 Jul 22
HQB have been providing accounting services to our family for a long time and they are always prompt, efficient and thorough. The advice given has been a great help. Thank you HQB.
Bob Prater
Bob Prater
06:01 30 May 22
Outstanding service, sorted out my complicated setup and gave me peace of mind.I had great experience with HQB, no problems at all.Thank you
Hamish
Hamish
07:22 21 Apr 22
Great service! Came recommended through a friend! Would definitely recommend.
steve hanley
steve hanley
23:20 16 Mar 22
I was referred to James & the HQB team around 2016. James has been fantastic - always available when advice is sought, explains options clearly and moves quickly when I request documents in most unreasonable timeframes. It's also comforting dealing with someone who has local knowledge is very much part of the community. I have no hesitation recommending him and the team!
Mindy
Mindy
06:49 07 Feb 22
I have been with HQB since ACSM was merged...so long ago i cannot remember. Their service has always been good and this has been elevated to excellent since James Davis took over my account. He is super sharp, good at listening and prompt in response to enquiries. I recommend HQB.
Paula Fursman
Paula Fursman
22:54 01 Feb 22
I met James Davis from HQB about 6 - 7 years ago when we were looking for an accountant that would suit our needs better and provide the advice that would steer us into the future.At the time I sat in front of James and fired so many questions, scenarios, future plans etc and James did not bat an eyelid. There was no let me get back to you on that one, or good questions I will check the current legislation, it was a variety of questions that led to us setting up a structure that has allowed us to grow with absolute confidence we are structured appropriately.This relationship has grown from strength to strength and i would have no hesitate to refer anyone to HQB as I am confident they will have the exact same experience and get the advice they need when they need it.Thanks for the amazing service guys and quality advice.
Daniel McCarthy
Daniel McCarthy
03:12 31 Jan 22
I found the team relaxed but very professional. All work was conducted in a correct and timely manner. Communications from Brad and this team are of a high standard and they follow up.You get great prompt service at what seem to be standard industry charges
Darryl Tebbutt
Darryl Tebbutt
05:58 07 Jan 22
HQB accountants are the best. They have pointed things out to me that my previous accountant didn't. They got me set up and straightened out all my accounts to ensure I was complying with with regulators. I now know my accounts are in good order. Would recommend to those who like to sleep at night knowing someone has got your back!
Paula Berti-Duncan
Paula Berti-Duncan
00:53 29 Nov 21
James Davis and the team are great to work with.We are very happy with the service and value.THANK YOU
Philip Wilson
Philip Wilson
02:57 23 Nov 21
As a business owner, I love using HQB for my accounting maters. It makes life much easier. They are professional and supportive, allowing me to focus on the business.
Adrian Betts
Adrian Betts
21:30 18 Nov 21
HQB are the best accountants I have worked with in more than thirty years of business. We transitioned from a small one person accountant to a large accountancy firm, where we got lost amongst the bigger businesses with deeper pockets and louder voices, and charged like there was no tomorrow. HQB is the perfect middle ground where we get excellent and up-t0-date advice but treated and cared for as an SME with growth potential. The personal service is amazing. The advice we get even better. VERY HIGHLY RECOMMEND!
Sales Rider
Sales Rider
23:57 15 Nov 21
Have been dealing with James and his team for the past few years.Always a quick response with a helpful answer.You definitely have my YES vote in business.Thanks for the assistance
Robert Brunnekreef
Robert Brunnekreef
09:19 15 Nov 21
HQB is an excellent accounting firm, we have worked together for over 20 years now. I cannot recommend them more highly and James Davis offers a very personal and professional service, second to none. Great communicators and are always available promptly with support and advise.
Dan Maher
Dan Maher
01:05 15 Nov 21
Have been working with James from HQB for the last couple of years - and only have good things to say. Very responsive, offers support where needed and hangs back in other areas that we can manage ourselves. Best accountant we have worked with - makes it a breeze, which is what you want when working on the paperwork.
Kevin Doye
Kevin Doye
00:42 15 Nov 21
Great service, nice and easy to deal with, fast on jobs. 5-star business for sure!
Felix Wong
Felix Wong
00:39 15 Nov 21
James and the team at HQB are always helpful in what has been a very busy approx 2 years in Covid conds, well done!!
Richard Welch
Richard Welch
23:47 14 Nov 21
Ian and his team are the best. Thanks HQB.
todd armstrong
todd armstrong
05:07 08 Nov 21
I'm really enjoying the personalised touch and service I'm receiving from Ian and Siarn. Always prompt, professional and happy to answer my silly questions and help me stay informed. I've been a client of Bill's and HQB for about 20 years. Since Bills retirement he passed me on to Ian and the quality of the service just seems to keep getting better. HQB comes highly recommended by me.
Trent Allen
Trent Allen
03:43 25 Jun 20
We highly recommend the team at HQB. We are a Sydney based business, and we find the team highly professional, responsive, and just a pleasure to deal with. They are very proactive and we feel as though we are a valued client. Well done to Brad Sheaves and team HQB !
Alastair Fysh
Alastair Fysh
04:31 25 May 20
HQB accountants have been an asset to our business. They have made Job Keeper a breeze and kept our business strong. They respond to emails quickly. They have been terrific value for us as they have brought knowledge and expertise that I don't have even if I had the time to do my accounting. They have taken the time to understand my business and structure our finances accordingly.
Kyle Maloney
Kyle Maloney
06:19 22 May 20
Amazing service from James (& Brianna), going well above his responsibilities to his clients. Cannot recommend James highly enough. HQB a highly professional and responsive accounting firm. Incredibly quick at responding, yes, often after hours, which is more than we would ever expect from any professional. I am continually recommending James to friends and family. Many thanks James. Kind regards, Lyn (& Jeff) Green
Jeff Green
Jeff Green
01:02 17 May 20
James became our Accountant last year and he has handled all our entities swiftly and pro actively. We are incredibly impressed with him and HQB and feel very comfortable in their hands to manage our Business. James is always prompt in replying and sometimes out of hours and his handling of our recent predicament with COVID 19 has helped us manage our Business successfully through this trying time. Thank you James and the team at HQB. We will always recommend you highly,.
Pandora Colledge
Pandora Colledge
01:36 15 May 20

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