Major Tax Changes Coming into Effect on 1 July 2024

As Australia approaches the start of the new financial year, several significant tax changes are set to come into force on 1 July 2024. These changes will impact both individuals and businesses, with a focus on income tax adjustments, superannuation updates, and energy relief measures. Here’s a comprehensive overview of what to expect.

Personal Tax Changes

1. Personal Income Tax Cuts

The government has introduced tax cuts that will reduce personal income tax rates and alter the income thresholds. This move aims to provide tax relief and increase disposable income for many Australians.

2. Superannuation Guarantee Increase

The superannuation guarantee rate will increase from 11% to 11.5%. It is important for employees and employers to review salary package arrangements to account for this change and ensure compliance.

3. Increased Superannuation Caps

• Concessional Contributions Cap: The cap for concessional (before-tax) super contributions will rise from $27,500 to $30,000.
• Non-Concessional Contributions Cap:The cap for non-concessional (after-tax) super contributions will increase from $110,000 to $120,000.

4. Luxury Car Tax Threshold Increase

The luxury car tax threshold will be adjusted:

• Fuel-Efficient Vehicles: The threshold increases to $91,387.
• Other Vehicles:The threshold rises to $80,567.

5. Car Limit for Depreciation

The car limit for depreciation purposes will increase to $69,674, allowing higher depreciation claims on vehicles used for business purposes.

6. Energy Relief Credit for Households

A $300 energy relief credit will be introduced for households. This credit will be automatically applied quarterly, providing direct financial relief to help manage rising energy costs.

Business Tax Changes

1. Energy Relief Credit for Small Businesses

Small businesses that meet the relevant State or Territory definition of a ‘small customer’ will receive a $325 energy relief credit. This credit aims to support small businesses facing increasing energy expenses.

2. Extension of the Instant Asset Write-Off

The $20,000 instant asset write-off has been extended to 30 June 2025, subject to the passage of legislation. This extension allows businesses to immediately deduct the cost of eligible assets, encouraging investment and growth.

The upcoming tax changes reflect the government’s efforts to provide financial relief and stimulate economic activity. Individuals should review their personal finances and superannuation contributions to take advantage of the new thresholds and rates. Businesses, particularly small businesses, should assess their eligibility for energy relief credits and consider utilising the extended instant asset write-off to enhance their operations. Staying informed and proactive in response to these changes will ensure that Australians can maximise their benefits in the new financial year.

(Aspen Corp What’s changing on 1 July 2024? (aspencorp.com.au)