Federal Budget

The 2021 Federal Budget

Federal Budget Key Announcements – Tax Measures

Handed down on Tuesday the 11th of May, the budget contained many spending measures, but we will focus on the tax related measures announced. As usual, the warning that these are only announcements. To become law they need to be passed through parliament, there is no certainty that they will actually be passed in their current form without amendment.

  • The Low and Middle Income Tax offset of up to $1,080 per individual, which was scheduled to end on 30thJune 2021 will now be retained for the 2021/22 financial year.

  • The temporary full expensing of depreciable asset purchases, which was in place until 30thJune 2022, has been extended another 12 months until 30th June 2023.

  • Currently the first $250 of expenditure on prescribed courses of education is denied. This expenditure will be allowed in full in future

  • The previously announced temporary loss carry-back provision for companies, which allows you to offset current year losses against tax paid in prior years, has been extended for one extra year, now scheduled to end 30/6/2023.

  • The SME Recovery Loan Scheme, under which the government guarantees 80% of the loan to small business from the bank, will be available until 31stDecember 2021 for eligible borrowers

  • The $450 per month threshold, below which employers do not have to pay super for their employee, will be removed. The start date depends on the passing of the legislation, likely 1stJuly 2021. This will mean that regardless of the level of wages paid, and adult employee will be entitled to superannuation guarantee payments.

  • From 1stJuly 2022, individuals aged 67 to 74 will be able to make non-concessional and salary sacrifice contributions to super without needing to meet the work test. Currently those individuals need to be working to make additional superannuation contributions. However, to make personal deductible contributions (i.e. contribution you claim a tax deduction for in your individual return) you will still need to meet the work test.

  • The ability to make downsizer super contributions (up to $300,000 when you sell your house) has been opened up to those aged 60 or over (previously 65 or over)

Navigating your way through the announcements and how they apply to you can be complicated.

If you have any queries, please email: admin@patrickrowan.com.au or contact your Accountant directly via email and we will be in touch.

Patrick Rowan & Associates