What the 2021/2022 Federal Budget means for you
It seems the trend of announcing budget measures in the weeks leading up to budget night continues, with no real surprises coming from Treasurer Frydenberg’s budget speech in parliament last night. The budget focusses on recovery, with continuation of some stimulus measures, infrastructure spending and new initiatives to encourage investment in biotechnology. Many of the announcements have a delayed start date of 30 June 2022 or later.
We are pleased to provide you with this brief summary of the main impacts for you, and as always, welcome your questions to our team.
- The low and middle income tax offset, available to taxpayers earning less than $126,000 per year, will remain for the 2021–22 income year.
|Taxable income||Low and middle income tax offset|
|Less than $37,000||$255|
|Between $37,000 and $48,000||Increase 7.5 cents per $1, capped at $1,080|
|Between $48,000 and $90,000||$1,080|
|Between $90,000 and $126,000||Reducing from maximum at 3 cents per $1|
- Individual tax residency rules to be simplified under new framework. From 1 July after the legislation receiving assent, a person who is physically present in Australia for 183 days or more in any income year will be an Australian tax resident.
- The current limitation for claiming a self-education expense, where the first $250 of the allowable deduction is denied, will be removed
Companies and business
- Temporary full expensing of eligible assets will be extended by 12 months to 30 June 2023.
- The temporary loss carry back offset will be extended by one year to apply for 2022–23 income year losses.
- Superannuation guarantee exemption for employees earning less than $450 in a month will be removed. Expected implementation date is 1 July 2022 but could be 1 July 2021 if the relevant legislation is passed before 30 June 2021.
- The cessation of employment taxing point will be removed for tax-deferred employee share schemes that are available for all companies. Will apply from the first income year after assent of the amending legislation. Changes will apply 3 months after assent of the amending legislation.
- Taxpayers with certain intangible depreciating assets will be given the choice of using the statutory effective life or self-assessing the decline in value from 1 July 2023.
- The Boosting Apprenticeship Commencements wage subsidy will be expanded. The subsidy will now be available from 5 October 2020 to 31 March 2022 and businesses of any size can claim the wage subsidy. Eligible businesses will be reimbursed up to 50% of an apprentice or trainee’s wages of up to $7,000 per quarter for 12 months.
- Excise relief for small brewers and distillers will be expanded. From 1 July 2021, eligible brewers and distillers will be able to receive a full remission of any excise they pay, up to an annual cap of $350,000.
- SME Recovery Loan Scheme. The Government will provide participating lenders with a guarantee for 80 per cent of secured or unsecured loans of up to $5 million for a term of up to 10 years and with interest rates capped at 7.5 per cent. Available to businesses and non-profit organisations, with a turnover of up to $250 million and have received JobKeeper Payment between 4 January 2021 and 28 March 2021
- From 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making or receiving non-concessional superannuation contributions or salary sacrificed contributions.
- From 1 July 2022, the eligibility age to make downsizer contributions into superannuation will be reduced from 65 to 60 years of age.
- The maximum amount of contributions that can be released from superannuation under the first home super saver scheme (FHSSS) will be increased from $30,000 to $50,000 from 1 July 2022.
For a detailed Tax and Accounting Overview on the 2021/22 budget click here.
If you would like further information or to book an appointment to discuss the impact on your personal situation please contact us.