2022-23 Federal Budget measures for small business

Tonight’s Federal Budget announces several changes to the way small businesses report and meet their tax obligations. These changes are intended to improve cash flow and reduce red tape.

Tax deduction for digital uptake and training

Small businesses (aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of the cost of expenses and depreciating assets that support digital uptake, up to $100,000 per year. An additional 20 per cent reduction will also be permitted for eligible external training courses for employees. The expenditure must occur between 29 March 2022 and 30 June 2024.

Fuel excise cut

The fuel excise will be cut in half to 22.1 cents per litre for the next six months.

Lower tax instalments in 2022-23

The GDP uplift rate that applies to pay-as-you-go (PAYG) instalments and GST instalments will be lowered to two per cent for the 2022-23 income year, compared with 10 per cent under the statutory formula, lowering tax instalments.

Reduction in ASIC registry fees

The Government announced the removal of the companies annual late review fee, a reduction in the number of fees paid for ad hoc lodgements under current requirements and removal of fees for searches conducted on the new registry website. The changes are scheduled to come into effect in September 2023 when a modernised registry system comes online. In a recent submission to a Treasury review of registry fees, the NSW Small Business Commissioner called for fees to be lowered and search fees abolished altogether.

Improvements to PAYG system to help manage cashflow

Companies will be able to calculate PAYG instalments based on financial performance. If financial performance declines, businesses may be able to get refunds of instalments paid automatically.
The Government said systems to implement this measure are expected to be in place by 31 December 2023 for implementation by 1 January 2024.

Improved reporting of taxable payments

The Government will allow eligible businesses the option to report taxable payments reporting system data via software at the same time as activity statements. Businesses that opt into automatic reporting will no longer need to fill out the yearly Taxable Payments Annual Report.

Currently, approximately 190,000 businesses that contract for services relating to building and construction, cleaning, road freight and courier, security, investigation, surveillance or information technology services are required to fulfil this obligation on an annual basis.

New systems are expected to be in place by 31 December 2023, for implementation by 1 January 2024.

Aligning excise and other reporting requirements

Manufacturers, importers and distributors in the alcohol and fuel sectors with annual turnover of less than $50 million will be able to lodge and pay excise and excise-equivalent customs duty on a quarterly basis from 1 July 2023. Currently, most of these businesses report monthly. 

 
More information at budget.gov.au.