The Federal Budget 2021-22 has many announcements and proposals aimed at economic recovery and includes investment in jobs, essential services, business incentives and tax cuts.
Budget Highlights for Business
- Temporary full expensing measures extended until 30 June 2023 – eligible businesses can claim an immediate deduction for the total cost of depreciating assets. In some cases, this can apply to second hand assets also.
- Temporary loss carry-back rules extended – eligible companies can carry back tax losses from the 2023 financial year to offset tax bills from 2019 onwards.
- ATO Debt recovery action – reducing the legal fees and red tape for small business.
- Tax cuts – small to medium company tax rates will reduce to 25% from 1 July as planned.
- Digital Economy Strategy whole of government plan – funding for digital cadetships, innovation investment incentives, e-invoicing, cyber security, overhaul of myGov and building small to medium business digital capacity
- Producer offset will stay at 40% – for features with a theatrical release
Budget Highlights for Individuals
- Personal income tax cuts – the low and middle income tax offset continues for another year.
- Medicare levy low-income thresholds increase
- Self-education expenses – full cost of eligible self-education can be claimed.
- Residency Test Update – Primary test 183 days or more in Australia
- 5% deposit home loans – for first home buyers building new homes
- 2% deposit home loans – for single parents
- Changes to work test – no longer required for non-concessional contributions and salary sacrifice, but still required for those aged 67-74 who want to make personal contributions.
- Downsizer contributions – now allowed for people over 60.
- SMSF and residency – rules relaxed to allow concessional tax treatment for more people temporarily away from Australia.
- $450 monthly minimum for SGC – proposal to remove threshold for casual employees.
Other funding announcements include guaranteeing essential services, COVID-19 vaccine rollout, industry-specific measures, investment in employee training and mental health support measures.
For full details, visit Budget 2021-22.
Talk to us about how you or your business can benefit from the budget announcements.