Small Businesses

Temporary full expensing of assets purchased

Until 30 June 2023, temporary full expensing allows deductions for:

• Business portion of the cost of new eligible assets and improvement on eligible assets for business with an aggregated turnover under $5 billion.
• Business portion of the cost of eligible second hand assets for business with an aggregated turnover under $50 million

If you are planning on purchasing a car, your deduction will be limited to $60,733 inclusive of GST.

Loss carry back offset – Turnover up to 5 billion

Companies with tax losses for the 30 June 2022 and/or 2023 financial years can offset losses against any tax paid in the 30 June 2019, 2020 and 2021 financial years to receive a potential refund in the 30 June 2022 year. Note that the offset is limited to the company’s franking credit balance as at 30 June 2022.

The company tax rate for businesses with less than $50 million turnover is 25%. This company tax rate is available if 80% or less of a company’s assessable income is passive income such as interest income, dividend, rent, royalties and net capital gains. The company tax rate is otherwise 30%

Consider prepaying rent, subscription and interest on loans before 30 June 2022.

Prepayments are fully deductible for small businesses in the year it is incurred provided the service period is up to 12 months and it ends in the next financial year.

Please be aware that superannuation guarantee amount is increased to 10.5% from 1^st July 2022. Please also be aware that from 1 July 2022 the minimum monthly wage threshold of $450 is also removed. This means all eligible workers aged 18 years or older will be entitled to receive super contribution regardless of how much they earn.

Individuals

If claiming motor vehicle two methods can be used

• Cents per km – up to 5000 km
  • Log book – This method requires to keep a logbook for 12 continuous weeks

Home Office Expenses – 3 methods availabel

• Actual cost
  • 80c per hour – This method covers all home office expenses
  • 52c per hour – This method allows work-related use of internet and mobile phone

If you have an investment property consider

• Bring forwarded any repairs prior to the end of the financial year
  • Look at possibility of having a depreciation report prepared
  • Prepayment of interest on investment loans

If an investment has been sold during the financial year, resulted in a capital gain consider the sale of any investments that would result in a capital loss to offset the gain

• Point to note – Sale occurs when the contract is signed and not at settlement
  • In order to take advantage of potential 50% Capital Gains discount, the investments must have been held for at least 12 months

The Superannuation concessional contributions cap for the 30 June 2022 financial year is $27,500. A concessional contribution Includes employer, salary sacrifice and personal member contributions

• Consider making additional personal member contributions prior to 30 June

The information provided does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances.