The 2023 Federal Budget was announced on Tuesday 9 May 2023, with a focus on cost-of-living relief and modernising our economy.

There were 2 very important things not mentioned in the 2023 Budget that may affect you as a business owner:

  • The Temporary Full Expensing measures end on 30 June 2023.  The Temporary Full Expensing measures allowed businesses with a turnover of less than $5 billion to deduct the full expense of an asset in the year it was first purchased and installed ready for use, rather than depreciating the asset over time.  There was no limit on the value of the asset that could be deducted.

This measure has been replaced with a Small Business Instant Asset Write-off capped at $20,000.

Here is an example of how these measures might impact you:  if a business trades in a vehicle (that was fully expensed in a prior year) 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.

  • The Low and Middle Income Tax Offset was not extended by the Government. This means individuals who received up to $1,500 in extra tax refunds last year will not receive them again in 2023.

Here is a brief summary of the Budget updates relevant to the majority of our clients:

Taxation Changes

tax changes

Superannuation Changes

superannuation changes

If you have any questions or would like to discuss how these measures may impact your business, please contact the team at Element Business.