The company tax rate for small businesses has reduced from 30% in 2013-14 to 25% in 2021-22. This is the lowest level it has been in 50 years.

The GDP uplift rate that applies to small-to-medium businesses, sole traders and others who use the instalment amount method for pay-as-you-go (PAYG) instalments and GST instalments will be reduced from 10% to 2% for the 2022-23 financial year.

The federal government have announced new measures to automate reporting requirements and align instalment payment obligations with financial performance.

Companies will be able to calculate their PAYG instalments based on their financial performance. By 1 January 2023, it’s expected that companies will be able to access automatic refunds if their business performance declines.

Currently, up to 30,000 trusts lodge their tax returns by paper. By 1 July 2023, the government will ensure all trusts will have the option to lodge their tax returns electronically, which will have the effect of reducing errors and processing times. This will also provide capacity to pre-fill beneficiaries’ tax returns.

Primary producers will be able to treat revenue from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates as primary production income. As well as a lower tax rate, this will provide farmers with access to income tax averaging arrangements and the Farm Management Deposit Scheme (FMDs) for ACCUs and biodiversity certificates income. From 1 July 2022, the government will also change the taxing point of ACCUs and biodiversity certificates to the year they are sold.

This targeted response to rapidly rising fuel prices sees fuel exise rates reduced by 50% for the next six months. Businesses who consume fuel in transport on public roads will see the benefit of an expected reduction of 4.3 cents per litre for fuel used in heavy vehicles, and up to $17.68 per tank of fuel for their light vehicles.

Small businesses (annual turnover of less than $50 million) will be entitled to an additional 20% deduction on eligible expenses and assets acquired in relation to digital uptake.

This may include:

• Payment devices
• Cyber security systems
• Subscriptions to cloud-based services

There is an annual spending cap of $100,000, which caps the additional deduction at $20,000 per annum.

If legislated, the boost will be able to be claimed in your 2023 tax return based on your 2022 & 2023 spending.

Small businesses will also be able to claim a 20% additional deduction for Australian registered external training courses for employees.

If legislated, the boost will be able to be claimed in your 2023 tax return based on your 2022 & 2023 spending.

In late 2023, it’s expected that Single Touch Payroll (STP) data will be shared with State and Territory Governments on an ongoing basis to cater pre-filling of payroll tax returns. This major shift will require employers to closely evaluate how their processes and procedures should be adjusted to position their business for success.

For example, your existing payroll systems and calculations may need to be replaced with Single Touch Payroll enabled software, particularly in the instance you want to adjust pre-filled data or defend adjustments prior to lodgement.

By 1^st January 2023, the federal government will roll-out new software which will allow businesses to opt in to automate reporting of contractor information to the ATO at the same time as business activity statements. Businesses that opt in to automatic reporting will no longer be required to prepare a taxable payments annual report (TPAR).

The Boosting Apprenticeship Commencement and Completing Apprenticeship Commencement wage subsidies have been extended to 30 June 2022. Under this arrangement, employers are able to access wage subsidy support for eligible new apprentices.

The 2022-23 federal budget will be reducing red tape for employee share schemes (ESS) by simplifying the regulatory legal framework to make ESS offers.

If the ESS does not require payment from an employee, the ESS offer will qualify for regulatory relief from disclosure and no filings will be required.

Where payment is required, (e.g., for a share or an option with an exercise price), and other disclosure exemptions do not apply, the relevant offers will be subject to streamlined disclosure requirements, (similar to those contained in ASIC Class Order 14/1001). ESS offers with a payment required are only eligible for streamlined disclosure where the outlay will be equal to or less than $30,000 per year, (or equal to or less than $150,000 over five years for unexercised options), plus 70% of the dividends and cash bonuses payable to the ESS participant in the relevant year(s).

Where an employee participating in an ESS offer is not required to make a payment until a liquidity event where they can immediately sell their equity for a profit, there’s not limit on the amount of equity that can be offered.

The LMITO has been increased by $420 for the 2021-22 (current) financial year, as a one-off cost of living tax offset. The LMITO has not been extended beyond the 2022 financial year.

Individual taxpayers will reap tax savings of up to $1,500 as per below:

• Taxpayers with a taxable income of up to $37,000 will have their tax reduced by up to $675.
• Taxpayers with a taxable income of $37,001 to 48,000 will see an offset increase by 7.5 cents per dollar, (with a maximum $1,500 offset for incomes $48,000-$90,000)
• Taxpayers with a taxable income of $90,001 to $126,000 will see an offset of $420 to $1,500.
• Taxpayers with a taxable income over $126,001 are not eligible for the LMITO.

Those receiving an eligible Australian resident aged pension, social security, income support payment, and some concession hard holders will receive a one-off cost-of-living payment of $250 in April 2022.

Personal income tax rates remain unchanged for 2022-23.

There has been an extension of the existing 50% reduction in minimum annual pension drawdown rates until 30 June 2023, (calculate your minimum drawdown here).