- Removal of the self-education expenses threshold.
The $250 non-deductible threshold was removed for the 2022–23 year, with the changes also applying to the fringe benefits tax year starting 1 April 2023.
This change meant there were lower compliance costs for individuals looking to claim self-education expenses, however, it still needed to be reported under their Individual Income Tax Return but there would no longer be a non-deductible category.
- Revised fixed rate method for those working from home.
From 1 March, the updated method was 67 cents per work hour and the ATO said the change meant individuals could increase the rate per work hour that they claim when they work from home, change the record-keeping requirements and remove the requirement to have a home office set aside for work.
The ATO said if individuals choose not to use the revised fixed rate method they must use the actual costs method, with the shortcut method no longer available.
- The end of the low and middle-income tax offset
This is a key change and a reason clients could receive a lower refund than they expected or even a tax bill this year.
However, the low-income offset (LITO) was still available for those with a taxable income of $66,667 or less which could provide a maximum offset of $700 based on their taxable income.
- The end of tax deferrals built up during COVID-19
The Tax Office had restarted offsetting any credits or refunds clients may receive to pay off debts they put on hold during the pandemic.
- Changes in the car deduction rates
Claiming car expenses changed to the new cents per kilometre rate of 78¢ for 2022–23 with written evidence required to show how the work-related kilometres were figured out, while the car depreciation cost limit had increased to $64,741.
- The introduction of the temporary skills and training boost
Small businesses with an aggregated turnover of less than $50 million could claim the temporary skills and training boost in the form of a bonus discount as an additional 20 per cent deduction for expenditure incurred for the provision of eligible external training courses to employees by registered training providers in Australia.
The temporary boost applied to eligible expenditures incurred from 7:30pm (AEDT) 29 March 2022 until 30 June 2024.
- The introduction of the temporary technology investment boost
Small businesses can also claim the introduced temporary technology investment boost as a form of a bonus deduction.
Eligible firms could claim an additional 20 per cent discount on top of the ordinary deduction for eligible expenditure incurred and depreciating assets acquired for their digital operations or digitising their operations.
The additional deduction would be up to $20,000 per income year and applies to eligible expenditures of up to $100,000 per income year incurred from 7:30pm (AEDT) 29 March 2022 until 30 June 2023.
The scheme was available for small businesses investing in digital operations or skills and training such as new equipment like technology, cloud computing, e-invoicing, or cyber security.
Importantly, purchases must be first used or installed ready for use by 30 June 2023 to qualify under this measure.
- The end of the temporary full expensing on 30 June 2023
The ATO said SMEs could still claim an immediate deduction for the cost of eligible assets first used or installed ready for use by 30 June in this year’s tax return, but its end meant the cost of assets not already being used or installed by the EOFY was not eligible.
Even if you’ve paid a deposit or received an invoice, the asset must be installed ready to use by 30 June 2023.
Tim Clarkson, Misty Hare, 2023, ceramic, 23cm L by 11cm W by 34cm H.
Tim Clarkson, Black rabbit, 2023, ceramic, 21 cm L by 13cm W by 25cm H.
View other works by this artist.