Happy new financial year! Maybe no fireworks to start the new fiscal period but an exciting time nonetheless, a time to review opportunities and reassess business goals.

Upcoming compliance deadlines to note as we ease into the new year:

• Final payroll finalisation via Single Touch Payroll was due on 14 July 2023, if not yet complete please action without delay
• Employee superannuation contributions for the April-June 2023 quarter were due and payable by 28 July 2023, if not complete you must action immediately to minimise any interest and penalties applicable
• Lodgement of the June 2023 quarter BAS is due by 25 August 2023, where lodging via a BAS or Tax Agent who enjoy a 4 week extension to the usual quarterly lodgement due date
• Taxable payments annual report (TPAR) to report payments made to contractors is due for lodgement by 28 August 2023

With the new year comes some changes which may impact you or your business, a summary of key changes from 1 July below:

National minimum wage and award rate increases

Pay rate increases should have been applied to the first full pay period post 1 July 2023. Please review your payroll system, setup to ensure correct rates are being paid and any backpay is processed if any underpayments have been made.

Employer super guarantee rate increase

From 1 July 2023 the super guarantee rate on all employee ‘ordinary time earnings’ increased to 11%. Most systems should have automatically updated the statutory rate applicable but check your payroll system to ensure correct.

Remember employee superannuation is always payable by the 28th of the month following end of quarter. There is no extension to this due date regardless of when your BAS may be due. I recommend you process and pay your superannuation ASAP after end of each month or quarter to ensure you have time to rectify any issues before the final due date. Penalties for late paid superannuation can be severe, including the loss of tax deductibility for the entire amount of super paid late.

Instant asset write off limit cap

The temporary full expensing provisions allowing full tax deductibility of business assets ended on 30 June 2023. From 1 July 2023, the instant asset write-off threshold for eligible small businesses is capped at $20,000 per-asset.

Assets costing more than $20,000 will be depreciated either over their effective lives or under the small business depreciation pooling provisions. If pooled, depreciation of 15% is claimed in the first year and 30% every year thereafter.

Study and training loan indexation rates

On 1 June 2023, all student loan debt (HECS/HELP etc) was indexed by 7.1% – which is significantly higher than the increases over the prior 10 years. You can check your loan balance via your MyGov account.

Loan repayments are made through the individual tax lodgement system, when individual taxable income reaches a certain threshold, $48,361 for the 2023 financial year. Any repayments will be payable on lodgement of your individual tax return.

Whilst rushing to get your 2023 tax compliance prepared and lodged mightn’t be high on your list of priorities, I would recommend getting your information to your tax agent at your earliest convenience. The sooner you have certainty as to any tax liabilities you can better plan and manage cash flow. Your tax agent can prepare your returns but hold for late lodgement if you’d prefer to pay the ATO at the latest due date.
Some key changes to note for the 2023 financial year for your consideration:

Low and middle income tax offset (LMITO) does not apply to the 2023 tax year

Between 2019 and 2022 there was a tax offset of up to $700 for individuals with taxable income of less than $66,667, which no longer applies from the 2023 financial year.
Despite the individual tax rates remaining the same, individuals with the same taxable income and tax withheld in 2023 as the prior year may find they receive a lesser tax refund or potentially have tax to pay on lodgement of their 2023 tax return.

Motor vehicle registration data sharing

The ATO have announced that they will acquire motor vehicle registry for the 2023, 2024 and 2025 financial years. The data includes, purchaser and seller identification information, market value of the vehicle bought/sold, type of vehicle etc.

Importantly, the ATO will be able to data match this information with that reported on business and individual tax returns. You must have a valid logbook to substantiate business use for any vehicles which are not specifically exempt from ‘Fringe Benefits Tax’ considerations, which are bought in a business entity or otherwise claimed as business expenditure. A valid logbook is one which is kept for 12 weeks in a 5 year period.

Small business technology investment boost

Small businesses (with an aggregated turnover of less than $50 million) can deduct an additional 20% of the expenditure incurred for the purposes of business digital operations or digitising its operations.

The boost applies to eligible expenditure incurred between 7.30pm on 29 March 2022 and 30 June 2023.

The types of eligible expenditure include:

• Internet costs, software subscription fees, website costs, cloud storage, computer hardware, mobile phones, tablets, cameras, POS terminals, etc.

The bonus deduction is limited to $100k but it’s safe to say that if your business isn’t benefitting from this incentive, you might look to review your systems to maximise the benefits cloud-based systems can provide to your business.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.