Learn what the 2024-25 Federal Budget means for small to medium businesses
On Tuesday, 14 May 2024, Treasurer Jim Chalmers handed down the 2024-25 Federal Budget, his 3rd Budget.
Key tax-related, superannuation-related, and other measures
The major tax related measures announced in the Budget included:
▪ Stage 3 personal tax cuts – 13.6 million taxpayers will receive a tax cut from 1 July 2024 under the revised Stage 3 tax changes, with an average annual tax cut of $1,888 (or $36 a week);
▪ $20k instant asset write-off for small businesses – extended to 30 June 2025;
▪ Tax incentives for Critical Minerals and Hydrogen production – will operate from 2027-28 to 2040-41 to support producers of renewable hydrogen and downstream refining and processing of Australia’s 31 critical minerals;
▪ Foreign resident CGT rules – the types of assets that foreign residents will be liable for will be clarified and broadened, while the point-in-time principal asset test will be amended to a 365-day testing period. Foreign residents disposing of shares and other membership interests exceeding $20m will be required to notify the ATO prior to the transaction;
▪ Medicare levy the low-income thresholds – have been increased for 2023-24;
▪ Personal income tax compliance program – extended for one year from 1 July 2027 to target the overclaiming of deductions, incorrect reporting of income and inappropriate tax agent influence;
▪ Intangible assets and significant global entities (SGEs) – 2022-23 Budget measure dropped; a new provision will be introduced from 1 July 2026;
▪ Changes to existing measures – anti-avoidance start date changed; thin cap to exempt forestry entities from the new earnings-based rules; Commissioner’s discretion to not use a taxpayer’s refund to offset old tax debts; 2019-20 Budget ABN proposals dropped;
▪ BAS notification period – the time the ATO has to notify a taxpayer if it intends to retain a BAS refund for further investigation will be extended from 14 days to 30 days;
▪ Charities – transitional reporting arrangements extended for 5 years;
▪ ATO Shadow Economy Compliance Program – extended for 2 years;
▪ Social security deeming rates – frozen for a further 12 months (until 30 June 2025).
Superannuation
The superannuation measures include:
▪ Super on Government Paid Parental Leave – super to be paid on Government-funded Paid Parental Leave (PPL) for births and adoptions on or after 1 July 2025;
▪ Payday Super – no further details proposed measure but funding to improve unpaid super in bankruptcy and liquidations from 1 July 2024;
▪ Super account balances above $3m – no further details but implementation funding to implement for public sector schemes.
What Happens Next?
Remember, these are proposed measures, and they could change as legislation passes through parliament.
You can access the 2024-25 Budget Papers here:
Get in touch if you’d like to find out more about how these measures and changes may impact your business.
Give us a call on 07 5649 7650.
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