July 1 Adjustments Vital For Small Businesses, Asserts ASBFEO

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) urges small businesses to proactively understand the changes brought by the new financial year, enabling them to effectively operate in the volatile economic environment.

Highlighting the significance of comprehension, Bruce Billson, the Australian Small Business and Family Ombudsman, emphasized the importance for managers and owners of small entities to understand the changes.

“It is essential that small-business owners and managers understand these changes. They should check their payroll and accounting systems have been updated and they should talk to trusted advisers like accountants and bookkeepers. It is important to get this right,” said Mr Billson. 

“With so many pressures on busy small-business leaders as we near the end of the financial year, it can be easy to overlook new and changing rules. However, there are significant changes that cannot be put aside.

“The end of the financial year is also a good time to not just have a stocktake but to take stock of the health of your business and yourself and to make use of the many helpful resources, tools, and checklists available.” 

The July 1 Changes

  1. Instant asset write-off

    Starting from July 1, eligible small businesses will experience an instant asset write-off threshold of $20,000 per asset for a duration of 12 months. As per ASBFEO’s statement, beginning on July 1, assets with a value exceeding $20,000, which are not eligible for immediate deduction, can be included in the small-business simplified depreciation pool. These assets will be subject to depreciation at a rate of 15 percent in the first income year and 30 percent in subsequent years.
  2. Small-business energy incentive

    Small businesses can look forward to a tax incentive in the next financial year, allowing for an additional 20 percent depreciation on eligible assets that promote electrification and enhance energy efficiency within their operations. This incentive is valued at up to $20,000.

    Businesses with an annual turnover below $50 million would be encouraged by the scheme to make investments that lead to energy bill savings. This includes initiatives like electrifying their heating and cooling systems, upgrading to more efficient refrigeration units, and even adopting induction cooktops.

    ASBFEO clarified that although the scheme was awaiting approval in Parliament, eligible assets or upgrades would need to be utilized or installed and ready for use between July 1, 2023, and June 30, 2024.
  3. Super guarantee

    Starting on July 1, the super guarantee rate for all eligible employees, entitling them to receive superannuation, would rise from 10.5 percent to 11 percent.

    As per the ombudsman’s advice, small-business owners must utilize the new rate to calculate superannuation for payments made to employees on or after July 1. This applies even if a portion or the entirety of the pay period corresponds to work performed before July 1.
  4. National minimum wage and award rate

    Small businesses were cautioned by ASBFEO to take note that, starting from the first complete pay period on or after July 1, the national minimum wage would rise to $23.23 per hour, and award rates of pay would experience a 5.75 percent increase.
  5. Single touch payroll

    Small businesses were notified of the necessity to ensure the completion of their employees’ single touch payroll data by July 14th. According to the ATO, employers must report pay-as-you-go withholding information each time they make payments to employees using single touch payroll. The reported amounts will be utilized as pre-fill information in activity statements starting from July 1.
  6. Paid parental leave scheme

    Starting from July 1, the scheme for employees who have a baby born or placed in their care would undergo a modification, combining the 18 weeks of paid parental leave entitlement with the two weeks’ pay entitlement for dads and partners.

    According to ASBFEO, the alteration would allow partnered couples to collectively claim up to 20 weeks of paid parental leave, while single parents at the time of their claim could avail the entire 20 weeks.

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