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Australia

Key takeaways from the 2024 Australian Federal Budget for small to medium businesses:

$325

Energy rebate for eligible small businesses.

Small Business $20,000 instant asset write-off

The Government has announced that it will extend the $20,000 instant asset write off for small businesses until 30 June 2025. Small businesses with an aggregated turnover of less than $10m will be able to claim an immediate deduction for eligible assets that cost less than $20,000 provided the assets are first used or installed ready for use by 30 June 2025. Assets that exceed the $20,000 threshold can be added to the general small business pool and depreciated at 15% in the first year of income and 30% in the subsequent income years. Further, the suspension of the five-year lock out rule for small businesses that chose to opt out of the simplified depreciation rules will also be extended to 30 June 2025.

While a similar instant asset write off measure was announced as part of the 2023-24 Federal Budget, to apply for the financial year ending 30 June 2024, it is still before Parliament for consideration and therefore has not yet been legislated. Small and medium sized businesses should therefore tread cautiously regarding the instant write off limits which may apply at the time they acquire particular assets.

Small business energy rebate

To support small business cash flow and ease cost of living pressures the Government will expand the Energy Bill Relief Fund to provide $3.5b in energy bill relief for all Australian households and certain eligible small businesses.

From 1 July 2024, 1 million eligible small businesses will receive a $325 electricity bill rebate and around 10 million households will receive a $300 electricity bill rebate.

Previously announced changes to the ABN system

As part of the 2019-20 Federal Budget, the Government at the time announced measures designed to strengthen the ABN system to disrupt black economy behaviour. The measures proposed to require ABN holders with an income tax return obligation to lodge their income tax return, and to also confirm the accuracy of their details on the Australian Business Register annually.

The Government have announced that they will no longer proceed with these measures as the integrity issues are being addressed through enhanced administrative processes implemented by the ATO.

Debts on hold

The ATO previously employed an administrative approach towards debts it considered ‘uneconomical to pursue’ and had placed ‘on hold’ where they would exercise discretion to refrain from offsetting taxpayer refunds against the debts in specific situations such as for taxpayers on low incomes. While the measure seemed logical, the existing laws do not actually permit this discretion.

The Government have announced in the Budget that it will amend the law to provide the Commissioner of Taxation with ability to utilise discretion to refrain from using a taxpayer’s refund to offset tax debts if the Commissioner had previously placed that old tax debt on hold before 1 January 2017. This aligns with the ATO’s current administrative practices. This discretion will apply to individuals, small businesses, and not-for-profits. The announcement did not include details on when the ATO will use its discretionary powers and the turnover threshold for eligible small businesses.

Small Business Helpline

The Government will provide $10.8m over two years from 2024-25 to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program to continue to provide financial counselling and mental health support for small business owners.