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What you really need to know about the 2023 tax year
By Sonia Gibson
THE 2023 TAX YEAR has just begun and it’s important to know what’s changing in the way of your personal and corporate liabilities – and also with respect to changes in superannuation and trust management. 
The good news is that there’s nothing truly shocking to take into account and most changes for this tax year aren’t going to leave you with a huge increase in your tax burden. However, you do need to be aware of these changes, if you want to be prepared for your return next June.
FOR INDIVIDUALS – a minor change
The only change for individuals is that the ‘home office short cut method’ which allowed somebody working from home to claim 80 cents an hour, has been cancelled.
This should come as no surprise as it was a measure meant to provide some relief during the lockdowns when people were being forced to work from home.
It seems unlikely that lockdowns are going to return on a similar scale and thus, the tax relief provided for that scenario is no longer needed.
FOR COMPANIES – some good news
The 2023 financial year sees that company tax rate drop from 26 percent to 25 percent for those companies that are ‘base rate entities’ (that is, they turn over less than $50 million a year).
However, the super guarantee levy goes up to 10.5 percent and the $450 super guarantee threshold is being dropped for monthly wages.
That means you must pay 10.5 percent super on all payments to employees and eligible contractors no matter what the amount you’re paying them.
It’s worth noting that this change also means that if you have to make super contributions for young workers (those under 18) you will no longer have to make such contributions unless the young person works more than 30 hours each week for you.
The shadow of Covid means that rapid antigen tests are still a useful tool and these tests have been deemed fully tax deductible if they are required in order for someone to attend a place of work.
The loss carry back provision for 2022 applies again and finishes on June 30, 2023. This allows for a rebate up to the amount of tax paid between July 1, 2018, and June 30, 2022, if a tax loss has been incurred between July 1, 2019, and June 30, 2023.
Single touch payroll reporting is now mandatory for all business with employees on the payroll. This also incorporates a director taking periodic payments if an adjustment has been done for wages, director’s fees or a bonus at the end of the financial year.
ASSETS – full expensing
Assuming your business turns over less than $50m a year, then all business asset purchases installed and ready for use between October 6, 2020 and June 30, 2023 will be 100 percent tax deductible.
The only exception to this rule is if you purchase a car for more than $60,733 where FBT (fringe benefits tax) may apply.
SMALL BUSINESS TECHNOLOGY INVESTMENTS AND SMALL BUSINESS SKILLS TRAINING – not yet law
The previous government had put forward a bill which would provide 120 percent deduction for investments in technology by businesses turning over less than $50m, though there would be an annual cap to this of $100,000 worth of qualifying income.
The measure would cover expenditure and investment related to digital adoption (such as payments to cloud services, portable payment devices, etc.)
However, this measure has not yet been made law. If it is made law, then it will apply to expenditures incurred between 7.30pm (AEDT) on March 29, 2022 and until June 30, 2023.
A similar measure for small business skills training has also been proposed but has not yet become law. If it does become law, eligible expenses for the 2022 financial year are to be claimed in the 2023 tax return along with any eligible expense from 2023.
SUPERANNUATION
There aren’t many changes to superannuation this year. The transfer balance cap has gone up from $1.6 million to $1.7 million.
The work test has been discontinued for those aged between 67 and 74 when the individual makes personal non-concessional super contributions and salary sacrifice contributions.
And the age threshold for downsizing contributions, when moving home after selling an original home, has decreased from 65 to 60. The maximum contribution that can be made is $300,000.
FINAL THOUGHTS on the 2023 tax year
This is a brief overview of the major changes for the year ahead, it’s very important to get specific advice regarding your circumstances from an accountant.
This is doubly true if you are using a trust where the gifting back law change may affect you. This is a complex area and it’s impossible to do justice to it in a couple of paragraphs.
About the author 
Sonia Gibson, of Accounting Heart Chartered Accountants has always loved solving puzzles and empowering people to help themselves. Accounting Heart brings these two passions of hers – her head and heart – together. While figures might send you batty, to Sonia they tell the unique story of your business. It’s her role to translate that story into one you’ll understand, so you can then write it your own way.
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