What’s Changing on 1 July 2024?

Key Changes for Individuals

From 1 July 2024, several significant changes will take effect that will impact both individuals and businesses. Here is a summary of the key changes:

1. Tax Cuts and Income Tax Rates:
   • Personal income tax rates will be reduced, and the thresholds will be adjusted. This change aims to provide relief for taxpayers and stimulate economic activity by increasing disposable income.
2. Superannuation Guarantee Increase:
   • The superannuation guarantee will increase from 11% to 11.5%. This change will impact salary package arrangements, and employees and employers need to review their agreements to ensure compliance.
3. Increased Superannuation Caps:
   • The cap for concessional super contributions will increase from $27,500 to $30,000.
   • The cap for non-concessional super contributions will rise from $110,000 to $120,000. These increases will allow individuals to contribute more towards their retirement savings.
4. Luxury Car Tax Threshold Increase:
   • The luxury car tax threshold will increase to $91,387 for fuel-efficient vehicles and $80,567 for all other vehicles. This adjustment reflects the rising costs of vehicles and aims to reduce the tax burden on high-end purchases.
5. Car Limit for Depreciation:
   • The car limit for depreciation will increase to $69,674. This change will affect how owners depreciate their vehicle assets for tax purposes.
6. Energy Relief Credit for Households:
   • A $300 energy relief credit for households will come into effect, credited automatically to your electricity bill. This measure is designed to help households manage rising energy costs.

Key Changes for Businesses

1. Energy Relief Credit for Small Businesses:
   • A $325 energy relief credit for small businesses will commence. This credit is available to small businesses that meet the relevant State or Territory definition of a ‘small customer’. This initiative aims to provide financial relief to small businesses facing high energy costs.
2. Extension of Instant Asset Write-Off:
   • The $20,000 instant asset write-off will be extended to 30 June 2025, subject to the passage of legislation. This extension allows businesses to continue to immediately deduct the cost of eligible assets, encouraging investment in business growth and development.

Implications of the Changes

These changes, effective from 1 July 2024, will have various implications for both individuals and businesses. It is important to stay informed and understand how these adjustments will impact your financial planning and tax obligations.

Preparing for the Changes

To prepare for these changes, consider the following steps:

1. Review Tax Strategies:
   • Assess your current tax strategies and make necessary adjustments to align with the new income tax rates and thresholds.
2. Update Superannuation Contributions:
   • Ensure that your superannuation contributions are adjusted to reflect the new caps and the increased superannuation guarantee rate.
3. Plan for Asset Purchases:
   • Take advantage of the extended instant asset write-off by planning asset purchases before the deadline.
4. Monitor Energy Relief Credits:
   • Stay informed about the application and receipt of the energy relief credits for both households and businesses.

Staying Ahead of the Curve

The upcoming changes present opportunities to optimise financial planning and tax strategies. By staying informed and proactive, you can make the most of these adjustments and ensure compliance with new regulations.

Take Action Now

If you need assistance navigating these changes and understanding their impact on your financial situation, contact ASB Consulting & Tax today. We are here to help you prepare for the new financial landscape and ensure you are making the best decisions for your future.