Tag: Budget

tax planning & structuring

Budget funding targets Director ID and Tax Reforms

Posted on | by Allan Hall

Budget Funding to Advance Director ID Linkage and Tax System Integrity

Federal Budget funding to link director IDs with company records, strengthening tax oversight and recover unpaid superannuation contributions.

Key Points:

  • The Federal Budget allocates funding to link director IDs with company records, boosting corporate transparency
  • New measures will modernise tax oversight and increase sanctions for misconduct
  • Additional ATO funding will target unpaid super contributions, with $31 million expected to be recovered.

The Federal Government has committed Budget funding to progress Australia’s business register reforms, including the long-anticipated integration of director identification numbers (director IDs) with the corporate register.

This advancement is expected to deliver stronger corporate governance and provide more effective use of the director ID system, which has been in place but not yet fully implemented through system linkage.

In a suite of additional compliance initiatives, the government announced plans to strengthen available sanctions through the Tax Practitioners Board, modernise the tax practitioner registration framework, and provide targeted resources to monitor and address high-risk tax practitioners.

These actions continue the government’s response to high-profile misconduct cases and reflect a broader focus on upholding standards in the tax profession.

The Australian Taxation Office will also receive further funding to improve tax system integrity.

While the measures are aimed at medium to large businesses, they include enforcement of superannuation contribution obligations. An estimated $31 million in unpaid super is expected to be returned to employees as a result—complementing the $900 million recovered in the prior financial year.

The initiatives signal an ongoing commitment to enhancing transparency and accountability across Australia’s corporate and taxation systems.

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2025–26 Federal Budget Highlights

Posted on | by Allan Hall

The Federal Treasurer, Dr Jim Chalmers, handed down the 2025–26 Federal Budget on 25 March 2025.

Guided by five priorities, including helping with the cost-of-living, building more homes and investing in education, the Budget includes two new personal tax cuts for all Australian individual taxpayers, increased Medicare levy thresholds, a ban on foreign individuals buying existing homes and a proposed reduction to student debts.

Described by the Treasurer as a “plan for a new generation of prosperity in a new world of uncertainty”, the Budget did not include any new measures affecting the taxation or regulation of superannuation or new income tax measures affecting small businesses.

Being the government’s last Budget before the expected federal election, the start dates of a number of previously announced but unenacted tax measures have been deferred until amending legislation is enacted.

The tax and tax-related highlights are set out as follows. While this Budget provides an indication of some measures that may be pursued post-election, in reality, they all hang in the balance until a new government is formed and its priorities are laid down.

Small Business

  • There were no new measures for small business other than the Government’s commitment to deliver the previously announced measure to temporarily extend to 30 June 2025 the $20,000 instant asset write off threshold. This Bill is currently before the House of Representatives and, unless enacted the instant asset threshold for this 2025 financial year will revert to $1,000. There was no announcement of what lies beyond 30 June 2025 for this small business measure.

Individuals

  • The marginal tax rate for the personal income tax threshold bracket from $18,201 to $45,000 will be reduced from 16% to 15% from 1 July 2026, and further reduced to 14% from 1 July 2027.
  • The Medicare levy low‑income thresholds for singles, families, and seniors and pensioners will be increased from 1 July 2024.
  • Student loan debts will be cut by 20% and other reforms will be made to the student loan repayment system from 1 July 2025.
  • The start date of the 2024–25 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after assent.
  • Foreign ownership of housing will be restricted.

Tax administration

  • Rules on managed investment trusts will be amended to ensure legitimate investors can continue to access concessional withholding tax rates from 13 March 2025.
  • The start date of the 2023–24 Budget measure to extend the clean building managed investment trust withholding tax concession will be deferred from 1 July 2025 to 1 January, 1 April, 1 July or 1 October after assent.
  • The ATO will be given $999M funding over 4 years to extend and expand its tax compliance activities.

Indirect taxes

  • Indexation on draught beer excise and excise equivalent customs duty rates will be paused for a 2‑year period from August 2025.
  • The excise remission cap is proposed to be increased from $350,000 to $400,000 each financial year for all eligible alcohol manufacturers from 1 July 2026. The Wine Equalisation Tax producer rebate would similarly increase from $350,000 to $400,000 each financial year from 1 July 2026.
READ FULL FEDERAL BUDGET TAX SUMMARY

Full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

To discuss how these Budget measures impact you or your business, please contact your Allan Hall Advisor.

CONTACT ALLAN HALL BUSINESS ADVISORS

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Small Business Instant Asset Write-Off Update

Posted on | by Allan Hall

Government support for small business passes Parliament

The Federal Government’s measures to support small businesses has passed in Parliament this week.

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 (the Bill) delivers measures announced in last year’s Budget to ease pressure and boost resilience for small businesses.

Key points

  • The Bill will implement a $20,000 instant asset write‑off for assets first used or installed ready for use between 1 July 2023 and 30 June 2024
  • This will improve cash flow and reduce compliance costs for small businesses with a turnover up to $10 million
  • The $20,000 threshold will apply on a per asset basis, so small businesses can write‑off multiple assets
  • Changes are scheduled to commence from 1 July.

The Government’s Small Business Statement in the Budget outlines more than $640 million in small business measures, including a further targeted 12‑months of the $20,000 instant asset write‑off and an additional $3.5 billion of energy bill relief to households and small businesses through the Energy Bill Relief Fund.

The Small Business Energy Incentive, a 2023–24 Budget measure designed to help small and medium businesses save on their energy bills, is designed to help small and medium businesses with turnover up to $50 million pay for upgrades to heating and cooling systems, install batteries and switch to energy saving electrical goods such as efficient fridges.

To read our comprehensive Budget overview please click the button below. 

2024-25 BUDGET OVERVIEW

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2024–25 Federal Budget Highlights

Posted on | by Allan Hall

Budget 2024–25 key measures you must know

Described as a “responsible Budget that helps people under pressure today”, the Treasurer has forecast a second consecutive surplus of $9.3 billion.

The main priorities of the government, as reflected in the Budget, are helping with the cost of living, building more housing, investing in skills and education, strengthening Medicare and responsible economic management to help fight inflation.

The key tax measures announced in the Budget include extending the $20,000 instant asset write-off for eligible businesses by 12 months until 30 June 2025, introducing tax incentives for hydrogen production and critical minerals production, strengthening foreign resident CGT rules and penalising multinationals that seek to avoid paying Australian royalty withholding tax.

The Budget also includes various amendments to previously announced measures, as well as a number of income tax measures that have already been enacted prior to the Budget announcement, including:

These enacted measures have not been discussed in detail in our summary report:

READ FULL SUMMARY

Income tax

The tax, superannuation and social security highlights are set out below. The government anticipates that the tax measures put forward will collectively improve the Budget position by $3.1 billion over a 5-year period to 2027–28.

  • The instant asset write-off threshold of $20,000 for small businesses applying the simplified depreciation rules will be extended for 12 months until 30 June 2025
  • The foreign resident CGT regime will be strengthened for CGT events commencing on or after 1 July 2025
  • A critical minerals production tax incentive will be available from 2027–28 to 2040–41 to support downstream refining and processing of critical minerals
  • A hydrogen production tax incentive will be available from 2027–28 to 2040–41 to producers of renewable hydrogen
  • The minimum length requirements for content and the above-the-line cap of 20% for total qualifying production expenditure for the producer tax offset will be removed
  • A new penalty will be introduced from 1 July 2026 for taxpayers who are part of a group with more than $1 billion in annual global turnover that are found to have mischaracterised or undervalued royalty payments
  • The Labor government’s 2022–23 Budget measure to deny deductions for payments relating to intangibles held in low- or no-tax jurisdictions is being discontinued
  • The start date of a 2023–24 Budget measure to expand the scope of the Pt IVA general anti-avoidance rule will be deferred to income years commencing on or after assent of enabling legislation
  • Income tax exemptions for World Rugby and/or related entities for income derived in relation to the Rugby World Cup 2027 (men’s) and Rugby World Cup 2029 (women’s)
  • Deductible gift recipients list to be updated.

Superannuation

  • Superannuation will be paid on government-funded paid parental leave (PPL) for parents of babies born or adopted on or after 1 July 2025
  • The Fair Entitlements Guarantee Recovery Program will be recalibrated to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024
  • Prior to the Budget the draft of the $3 million super tax legislation was given Senate go-ahead and remains unchanged — it will include the taxing of unrealised gains and no indexation. Read more »

Tax administration

  • The ATO will be given a statutory discretion to not use a taxpayer’s refund to offset old tax debts on hold
  • Indexation of the Higher Education Loan Program (and other student loans) debt will be limited to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023
  • A pilot program of matching income and employment data of migrant workers will be conducted between the Department of Home Affairs and the ATO
  • A new ATO compliance taskforce will be established to recover tax revenue lost to fraud while existing compliance programs will be extended.

GST

  • Refunds of indirect tax (including GST, fuel and alcohol taxes) will be extended under the Indirect Tax Concession Scheme.

Small business depreciation — instant asset write-off threshold of $20,000 extended to 2024–25

The instant asset write-off threshold of $20,000 for small businesses applying the simplified depreciation rules will be extended for 12 months until 30 June 2025.

Small businesses (aggregated annual turnover less than $10 million) may choose to calculate capital allowances for depreciating assets under a simplified regime in Subdiv 328-D of ITAA 1997. Under these simplified depreciation rules, an immediate write-off applies for low-cost depreciating assets. The measure will apply a $20,000 threshold for the immediate write-off, applicable to eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025.

Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter. The provisions that prevent small businesses from re-entering the simplified depreciation regime for 5 years if they opt-out will also continue to be suspended until 30 June 2025.

The measure extends a 2023–24 Budget measure to increase the instant asset write-off threshold to $20,000 for the 2023–24 income year. A Bill containing amendments to increase the instant asset write-off threshold for 2023–24 is currently before Parliament. The Bill was amended by the Senate to increase the instant asset write-off threshold for 2023–24 to $30,000 and extend access to the instant asset write-off to entities that are not small business entities but would be if the aggregated turnover threshold were $50 million.

Tax administration

Statutory discretion for ATO to deal with tax refunds and debts on hold

The Commissioner of Taxation will be given the discretion to not use a taxpayer’s refund to offset old tax debts where that debt had been put on hold before 1 January 2017. The tax law will be amended to provide for this ATO discretion which will apply to individuals, small businesses and not-for-profits. The discretion will maintain the ATO’s current administrative approach to such debts.

Student loans indexation reform

Indexation of the Higher Education Loan Program (and other student loans) debt will be limited to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023, subject to the passage of legislation. The measure will apply retrospectively.

Data matching program for migrant workers’ income and employment

A pilot program matching income and employment data will be conducted between the Department of Home Affairs and the ATO to mitigate the exploitation of migrant workers and abuse of Australia’s labour market and migration system. This measure forms part of broader reforms to the migration system.

Strengthening ATO ability to combat fraud and extension of compliance programs

The ATO will be provided additional funding to continue various compliance programs. The current ATO Personal Income Tax Compliance Program will be extended for another year from 1 July 2027 to enable the ATO to continue its focus on emerging risks to the tax system. The Shadow Economy Compliance Program and the Tax Avoidance Taskforce will be extended for 2 years from 1 July 2026.

Funding will be provided to the ATO to improve its detection of tax and superannuation fraud, including to upgrade its information and communications technologies to be able to identify and block suspicious activity in real time. A new compliance task force will also be established to recover lost revenue and block attempts to obtain refunds fraudulently. Funding will also be provided to improve ATO’s management and governance of its counter-fraud activities.

The ATO will also be given additional time within which to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The current required notification period of 14 days will be extended to 30 days, aligning it with time limits for non-BAS refunds. This measure will take effect from the start of the first financial year after assent of the enabling legislation.

2019-20 Budget measure on black economy will not proceed

The 2019–20 Budget measure “Black Economy — Strengthening the Australian Business Number system” will not proceed as integrity issues are being addressed through enhanced administrative processes implemented by the ATO.

GST

Refunds of indirect tax extended under Indirect Tax Concession Scheme

Refunds of indirect tax (including GST, fuel and alcohol taxes) will be extended under the Indirect Tax Concession Scheme (ITCS).

The Square Kilometre Array Observatory (SKAO) will have ITCS access upgraded for additional concessions to be claimed for the purchase of vehicles for personal use by SKAO officials or a member of their family. Additional concessions for commercial rent will also be formalised for existing ITCS packages for Bangladesh, Costa Rica, El Salvador and the Taipei Economic and Cultural Office. Construction and renovation concessions will be formalised for the existing ITCS package for the Netherlands. Concessions for both commercial rent and construction and renovation will be formalised for the existing ITCS package for Pacific Trade Invest.

Superannuation

Super to be paid on government-funded paid parental leave

Superannuation will be paid on government-funded paid parental leave (PPL) for parents of babies born or adopted on or after 1 July 2025. Eligible parents will receive an additional payment based on the superannuation guarantee (12% of their PPL payments), as a contribution to their superannuation fund. Payments will be made annually to individuals’ superannuation funds from 1 July 2026.

Recovery of unpaid super from liquidated or bankrupt employers

The Fair Entitlements Guarantee Recovery Program will be recalibrated to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024.

To discuss how these Budget measures impact you or your business, please contact your Allan Hall Advisor.

Full Budget papers are available at budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

CONTACT ALLAN HALL BUSINESS ADVISORS

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Parliament House

Support for Australian small business

Posted on | by Allan Hall

The Government has introduced the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 (the Bill) into Parliament.

The Bill delivers measures announced in the 2022‑23 Budget to ease pressure and boost resilience for small businesses.

Schedule 1 to the Bill will implement a $20,000 instant asset write‑off for one year, as announced in the 2023‑24 Budget, to improve cash flow and reduce compliance costs for small businesses.

Small businesses with aggregated annual turnover of less than $10 million will be able to immediately deduct eligible assets costing less than $20,000, from 1 July 2023 until 30 June 2024.

The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets.

This is targeted, responsible support, to help Australia’s small businesses continue to grow.

Schedule 2 to the Bill will introduce the Small Business Energy Incentive, a 2023‑24 Budget measure designed to help small and medium businesses electrify and save on their energy bills.

Up to 3.8 million small and medium businesses with aggregated annual turnover of less than $50 million will have access to a bonus 20 per cent deduction for eligible assets supporting electrification and more efficient use of energy.  

The new tax incentive applies from 1 July 2023 until 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.

The new Small Business Energy Incentive builds on the Albanese Government’s measures to help small businesses become more energy efficient and ease pressure on their energy bills.

Small businesses are the engine room of Australia’s economy, which is why these new measures are so critical.

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NSW State Budget 2023-24

Posted on | by Allan Hall

The 2023-24 NSW State Budget has a strong focus on tightening tax compliance, as well as changes to a number of exemptions and duties:

  • Funding Revenue NSW to Target Tax Compliance
  • Land Tax – Closing the loophole for Principal Place of Residence Exemption
  • Landholder Duty – changes to threshold for acquiring a “significant interest” in a private trust
  • Fixed and nominal duty amounts increased

This year’s NSW State Budget does not explicitly mention specific measures targeted at small businesses. However, it does mention some broader economic and infrastructure initiatives that could indirectly benefit small businesses. These include:

  1. Toll Reform: Introducing a two-year toll cap and streamlining motorway pricing
  2. Infrastructure and Transport: Investments in infrastructure projects, including road upgrades and improved public transportation
  3. Energy Relief and Reform: Addressing high energy costs through rebates and energy market reforms
  4. Disaster Relief: Funds allocated for natural disaster support and recovery programs.

Measures for First Home Buyers

The State Budget includes an expansion to the First Home Buyers (FHBs) Assistance Scheme to support FHBs with a stamp duty exemption for purchases up to $800,000 and a concession for purchases between $800,000 and $1 million.

Five out of every six first home buyers will pay no stamp duty, or a concessional rate after the Government expanded stamp duty exemptions and concessions from 1 July 2023. According to preliminary figures, more than 1,000 FHBs purchasing in the $650,000 to $800,000 range have availed themselves of the full exemption from stamp duty in July under the scheme.

The measures announced in the 2023-24 NSW State Budget can have implications for the business environment in New South Wales, including those for small businesses and are outlined in the Treasury and Revenue Legislation Amendment Bill 2023 expected to be implemented from 1 February 2024, once the Bill has been passed by Parliament.

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audit

Federal Budget weight behind tax audits

Posted on | by Allan Hall

The 2023 Federal Budget included $1 billion for audits of taxpayers over the next 4 years.

Therefore all taxpayers have an increased chance of a tax office review of their returns in the near future.

Did you know that our costs for assisting you with the management and supply of information to the ATO for their reviews can be insured?

We’ve partnered with AuditCover to share their offer with our clients.  AuditCover covers the professional fees you may incur when responding to a tax audit, review, investigation or enquiry from the ATO or state-based authorities and agencies.

If you haven’t already done so, please consider getting an online quote below.

If you’d like assistance with generating a quote, please let us know and we will be happy to help.

GET A QUOTE FOR AUDIT INSURANCE

If you have any questions, you can call AuditCover on 1300 895 797 or email them at [email protected]. Need more info? Read more here »

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The 120% technology and skills ‘boost’ deduction

Posted on | by Allan Hall

The legislation granting small and medium businesses (SMBs) the opportunity to claim a 120% tax deduction for technology expenses, skills training and training costs has finally passed Parliament, nearly a year after the announcement in the 2022-23 Federal Budget.

However, there are a few timing complexities involved. To benefit from the technology investment boost, you needed to have purchased and installed the technology by 30 June 2023, which was just seven days after the legislation was passed.

Key points

  • Under both the technology and Skills and Training Boost, eligible expenses will be available for the 120% deduction if they were incurred between 29 March 2022 and 30 June 2024
  • The bonus deduction for the technology boost is capped at 20% of the eligible expenditure, up to a limit of $20,000 ($100,000 of eligible expenditure)
  • There is no limit for the skills and training boost.

Who is eligible for the boosts?

Small business entities (including individual sole traders, partnerships, companies or trading trusts) with an aggregated annual turnover of less than $50 million can access the 120% skills and training boost, as well as the technology boost. Aggregated turnover includes the turnover of your business, affiliates and connected entities.

The technology investment Boost

Expenses that may qualify for the technology boost include:

  • Digital enabling items like computer hardware, telecommunications equipment, software, internet costs, computer network systems and services that facilitate their usage.
  • Digital media and marketing expenses including audio and visual content that can be accessed, stored or viewed on digital devices, as well as web page design.
  • E-commerce goods or services that support digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services and advice on digital operations or digitisation such as guidance on digital tools for business continuity and growth.
  • Cybersecurity systems, backup management and monitoring services.

The technology must be primarily or substantially used for a business’s digital operations or digitisation. There must be a direct connection to how the business generates income, particularly through its digital operations.

There are several costs that the technology boost does not cover, such as expenses related to staff employment, capital raising, construction of business premises and the cost of goods and services sold by the business. The boost does not apply to:

  • Assets purchased and sold within the relevant period (on or before 30 June 2023)
  • Capital works costs, including improvements to business premises
  • Financing costs like interest expenses
  • Salary or wage costs
  • Training or education costs, meaning that training staff on software or technology does not qualify (refer to Skills and Training Boost below)
  • Trading stock or the cost of trading stock.

The Skills and Training Boost

The Skills and Training Boost is a program that provides SMBs with a 120% tax deduction for external training courses offered to their employees. The primary objective of this boost is to facilitate the growth of SMBs’ workforce by enabling them to hire and upskill less-experienced employees through external training. This initiative aims to enhance their skills and increase overall productivity.

Please note that sole traders, partners in a partnership, independent contractors and other non-employees are not eligible for the boost as it is specifically designed for employees. Similarly, associates such as spouses or partners, as well as trustees of a trust, are not qualified to participate.

To ensure compliance, there are a few rules to be aware of:

  • Registration for the training course must have occurred between 7:30 PM (AEST) on 29 March 2022 and 30 June 2024. If an employee is already enrolled in an eligible training course, enrolments in subsequent courses or classes after 29 March 2022 are considered eligible.
  • The training must be deductible to your business according to ordinary rules, meaning it should be directly related to how your business generates income.
  • The training needs to be provided by a registered training provider who charges your business (either directly or indirectly) for the training. (Please refer to the section on “What organisations can provide training for the boost?” below)
  • The training must be intended for employees of your business and should be delivered either in-person within Australia or through online platforms.
  • The training provider cannot be your business or an associate of your business.

Training expenditure can include costs associated with the training, such as resources or equipment necessary for the course, provided that the training provider charges your business for these expenses.

What organisations can provide training for the boost?

Please note that not all courses offered by training companies will qualify for the boost. Only courses offered by registered training providers within their registration will be eligible. Typically, these providers offer vocational training to acquire a trade or courses that contribute to a formal qualification, rather than purely professional development.

Qualifying training providers will be registered by:

While some desired training may not be delivered by registered training organisations, there is still a wide range of options available. Short courses offered by universities or flexible courses designed for upskilling, rather than obtaining a degree qualification, can still be explored, especially if they align with the development pathway identified through recent performance reviews for your staff.

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Compliance cogs

Federal Budget ATO compliance crackdown

Posted on | by Allan Hall

Increased number of reviews

The importance of audit insurance in the wake of the Federal Budget – did you know that you can get insurance that covers the costs of professional fees incurred to respond to an ATO audit?

The recently announced Federal Budget 2023 has unveiled significant funding increases ($588M) in the government’s stance towards tax compliance, particularly through the Australian Taxation Office (ATO). GST compliance,and Personal income tax deductions have been specifically named by the government as areas of risk.

If you are in business, audit insurance is an often-overlooked component of business insurance, however in an environment where compliance scrutiny is intensifying, having audit insurance serves as a proactive measure to safeguard one’s financial interests.

Extended audit scope

Even if you are not in business, you may be a high-income earner, or have investment properties, the scope for an ATO review is much greater than in the past. You should be aware of safeguarding your financial well-being and know that you are not immune to tax compliance scrutiny (and review).

As complexities within our tax system increase, the time and expertise required to respond effectively to ATO reviews also escalate, resulting in more costs to simply respond to the review, not including ongoing management of the ‘case’ to completion. The potential cost of such services is increasing, with accountants needing to spend many hours (at hourly rates) to address detailed audit correspondence and liaise with clients.

Audit insurance offers coverage for professional fees incurred in responding to ATO and other government department reviews.

Investing in audit insurance ensures that individuals are also financially prepared to handle these reviews without incurring a significant cost burden.

With a substantial allocation of government funding towards tax compliance, the ATO aims to enhance its ability to address emerging risks and generate additional revenue. In light of these developments, it becomes increasingly crucial for businesses and many other taxpayers to consider the importance of audit insurance as a protective measure.

READ MORE ABOUT AUDIT INSURANCE HERE