Budget Highlights

We bring you a summary of the key points in the Federal Budget 2021-2022. Please do not forget to contact us to discuss your year end tax minimisation and superannuation strategies.

The Federal Budget 2021-22 has many announcements and proposals aimed at economic recovery and includes investment in jobs, essential services, business incentives and tax cuts.

Budget Highlights for Business

Temporary full expensing measures extended until 30 June 2023 – eligible businesses can claim an immediate deduction for the total cost of depreciating assets – no upper limit.
Temporary loss carry-back rules extended – eligible companies can carry back tax losses from the 2023 financial year to offset tax bills from 2019 onwards.
Administrative Appeals Tribunal given the power to pause or modify ATO Debt recovery action – reducing the legal fees and red tape for small business.
Tax cuts – small to medium company tax rates will reduce to 25% from 1 July as planned.
Digital Economy Strategy plan – funding for digital cadetships, innovation investment incentives, e-invoicing, cyber security, overhaul of myGov and building small to medium business digital capacity.

Budget Highlights for Individuals

Personal income tax cuts – the low and middle income tax offset continues for another year.
Medicare levy low-income thresholds increase
Self-education expenses – full cost of eligible self-education can be claimed – no threshold.

Superannuation Highlights

Changes to work test – no longer required for non-concessional contributions and salary sacrifice, but still required for those aged 67-74 who want to make personal contributions.
Downsizer contributions – now allowed for people over 60.
SMSF and residency – rules relaxed to allow concessional tax treatment for more people temporarily away from Australia.
$450 monthly minimum for SGC – proposal to remove threshold for casual employees.
SGC increase to go ahead – 10% from 1 July
Major concession for carry forward super contributions available

Other funding announcements include guaranteeing essential services, COVID-19 vaccine rollout, industry-specific measures, investment in employee training and mental health support measures.

For full details, visit Budget 2021-22.