2023 Federal Budget - Information: What the 2023 Federal Budget Means for You
The 2023 Federal Budget was announced on Tuesday, 9 May 2023, focusing on cost-of-living relief and modernising our economy.
Only a few tax and superannuation changes were announced, which is good news. However, no mention was made of the previously announced Stage 3 Income Tax cuts planned to begin on 1 July 2024, causing many people to wonder if the Government may cancel them next year.
There were 2 very important things not mentioned in the 2023 Budget that may affect you as a business owner:
1. With Temporary Full Expensing finishing on 30 June 2023 and its replacement with a Small Business Instant Asset Write-off capped at $20,000, a business that sells or trades in a motor vehicle would have 100% of its sale price included in taxable income in the year it is sold if it fully expensed its purchase in an earlier year.
For example, if a business trades in a vehicle (that was fully expensed) for $50,000 and purchases another vehicle for $60,000 in 2024, $50,000 will be included in its taxable income, but only a portion of the $60,000 purchase price of the new vehicle will be allowed as a depreciation tax deduction. This may result in significantly higher tax payable by the business compared with previous years.
2. The Government did not extend the Low and Middle Income Tax Offset. This means individuals who received up to $1,500 in extra tax refunds last year will not receive them again in 2023.
Please see attached for our analysis and What It Means for You.
