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There’s lots for bookkeepers and their clients in this year’s budget, including the extension of the instant asset-write off provision and the temporary loss carry back provision, as well as $15.3 million in funding for e-invoicing.
What’s in the 2021/2022 federal budget for bookkeepers and their clients?
19 May 2021
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4 minute read
Bookkeeper benefits from the 2021/2022 federal budget
We’ll all remember the 2021/2022 budget for a long time. In it, the federal government committed to a huge range of spending measures to support the post-COVID economic recovery. There is also a raft of changes to tax and super laws.
Simeon Duncan, Senior Manager, International Corporate Affairs at Intuit QuickBooks, recently unpacked everything bookkeepers need to know about the raft of initiatives and changes announced in the 2021/2022 federal budget on the Australian Bookkeeper Network’s program Bookkeeper Radio. Here’s an overview of his insights…
- Instant asset-write off provision extended
In his budget speech, Federal Treasurer Josh Frydenberg announced businesses will continue to be able to immediately depreciate the full value eligible assets they buy for the next two years. This will encourage businesses to invest for the future, without having to take a hit to cash flow.
Simeon was fortunate to attend a federal government briefing immediately post the budget announcement, during which Prime Minister Scott Morrison explained the rationale behind the measures outlined in the budget.
“At the event, Mr Morrison explained the point of the budget was to encourage businesses to invest, create jobs and rebuild the economy. The instant asset-write off provision gives small businesses the confidence to invest, one of the main aims of the Coalition’s economic plan,” he says.
- Extension of the temporary loss carry back provision to 2023
Technology and professional services firm Wolters Kluwer’s report[1] explains, the federal budget has extended the temporary loss carry back offset by one year to apply to 2022/23 income year losses.
The report explains, “Eligible corporate tax entities with aggregated turnover less than $5 billion will be able to carry back losses from the 2022/23 income year to offset previously taxed profits made in or after the 2018/19 income year. The loss that can be carried back is limited by the amount of earlier taxed profits and cannot generate a franking account deficit. Eligible companies can elect to carry back losses under this measure for any or all of the 2019/20 to 2022/23 income years.”
The federal government’s budget fact sheet[2] explains this provision encourages Australian businesses to invest, grow and create more jobs. The initiative was first announced in the 2020/21 budget to help businesses through the pandemic.
- More funding for e-invoicing
Another big piece of news for bookkeepers and their clients is $15.3 million set aside to encourage businesses to use e-invoicing. This is very welcome news and will assist small businesses to better manage their cash flow.
E-invoicing is the ability to send invoices directly from one organisation’s financial systems to another. It’s the quickest and most cost-effective way to ensure invoices are approved, processed and paid. It does not involve emailing invoices, nor is it a PDF invoice, rather a direct electronic transmission of data from one party’s system to the other.
The adoption of e-invoicing has great potential to simplify processes and help small businesses to manage their cash flow.
- Super system revamp
There’s lots of changes in the budget to the superannuation system bookkeepers will need to navigate on behalf of clients.
For instance, the First Home Super Saver Scheme has been extended so Australians can contribute up to $50,000 to their super fund to be used for a deposit, up from $30,000 when the scheme was introduced in the 2017/2018 budget.
An extra 10,000 places will also be added to the First Home Loan Deposit Scheme to help first home buyers buy or build a new home with a five per cent deposit. The federal government will continue to underwrite lenders’ mortgage insurance for these borrowers.
Additionally, the age retirees can access the downsizer scheme has dropped from 65 to 60. The measure allows retirees who sell the family home to contribute $300,000 from the sale proceeds to their super fund over and above other contribution rules. Couples are able to add $600,000 to their super savings from this scheme.
Other changes to super rules include:
- Removing the work test on voluntary superannuation contributions.
- Removing the $450 per month superannuation guarantee threshold.
- Increasing the superannuation guarantee rate to 10 per cent from July 1, 2021.
Intuit QuickBooks backs bookkeepers
Intuit QuickBooks has a suite of tools to support bookkeepers. For instance, leading lodgement software QuickBooks Tax powered by LodgeiT does the heavy lifting when it comes to BAS compliance deadlines. QuickBooks Tax is a cloud-based tax lodgement solution that supports bookkeepers and accountants to lodge BAS forms and other documents with the ATO. It offers unlimited e-signatures and no restrictions on the number of users who use it.
“We know efficiency and having access to the right solutions to handle compliance is really important, especially at this time of year,” says Intuit QuickBooks’ product manager, Isaac Walker.
Intuit QuickBooks has recently built a new integration in QuickBooks Tax through which bookkeepers can import GST and payroll data at the a click of a button, without the need to perform any manual transfers. And there are plenty more upgrades in the pipeline to help make bookkeepers’ lives even easier.
Intuit QuickBooks is dedicated to supporting bookkeepers and their small business clients to make the most of this year’s budget measures and streamline tax compliance.
“We know bookkeepers spend a lot of time fixing clients’ mistakes to ensure data is accurate for the ATO. So, we're really focused on re-imagining workflows so bookkeepers have access to all the client information they need in one place,” says Walker.
For more great insights into this year’s budget, register here for Intuit QuickBooks’ Pro Power Hour ‘Federal Budget Edition’ on 27 May, 11 am -12 noon.
[1] The 2021-22 CCH Tax and Accounting Federal Budget Report, 2021, Wolters Kluwer
[2] Tax incentives to support the recovery, Federal Treasury, 2021 https://budget.gov.au/2021-22/content/factsheets/download/factsheet_tax.pdf, accessed 12/05/12
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