Small Business Budget Wrap Up
It has been a big couple of weeks with both the Federal and State Budgets delivered during May. Small businesses will benefit from payroll tax reforms, asset write offs and energy incentives.
Read on for a summary of the business related news from each of the budget announcements.
Payroll Tax Concessions for Small Business
Businesses across Victoria will see a reduction in their payroll tax impost when the payroll tax threshold is raised from $700,000 to $900,000 from 1 July 2024. There will be a further increase to $1 million from 1 July 2025.
Business Insurance Duties
Business Insurance duties will be abolished over 10 years by 2033. These will be reduced by one percentage point each year from 1 July 2024.
Small Business Asset Write-off
Between 1 July 2023 and 30 June 2024, the instant asset write-off threshold will be $20,000 (excluding GST). This is a temporary increase from $1,000 to $20,000.
This means that small businesses with an annual turnover of less than $10 million can immediately deduct the full cost of eligible assets worth less than $20,000 that are first used or installed between those dates.
The $20,000 threshold applies per asset, so you can write off multiple assets instantly. Assets valued at $20,000 or more can still be depreciated at 15% in the first income year and 30% each income year thereafter.
Small Business Energy Incentives
From 1 July 2023, businesses can deduct an additional 20% of the cost of eligible depreciating assets that support electrification and more efficient use of energy.
This is part of the Small Business Energy Incentive, which allows up to $100,000 of total expenditure, with the maximum bonus deduction being $20,000.
Eligible assets include upgrades to more efficient electrical goods, assets that support electrification (such as heat pumps and electric heating or cooling systems), and demand management assets (such as batteries or thermal energy storage).
The Government is partnering with State and Territory governments to deliver up to $3 billion of electricity bill relief for eligible households and small businesses.
From July 2023, this plan will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses.
Cyber Security
Small businesses will be supported to build resilience to cyber threats through $23.4 million support. This is aimed to support 15,000 small business through the Cyber Wardens program to equip small businesses with the foundational skills they need to improve cyber safety.
Other
$392.4 million Industry Growth Program, to support small-to-medium-sized enterprises and startups to commercialise their ideas and grow their operations.
$431.9 million over four years, to improve support for small to medium enterprises (SMEs) and startups.
$210 million over four years, to expand the Emerging Markets Impact Investment Fund (EMIIF) from $40 million to $250 million.
Ensure that you stay informed about how to access these announcements as they become available, by subscribing to the Venture Melton e-news, and joining the Venture Melton Business Network.
For specific advice and support, speak to your accountant or tax advisor.