a. Tax Cuts.
Yes please! As from 1 July 2024, the new tax rates commence as follows:
| 2023 Income Range | Old 2023 Rate | 2024 Income Range | New 2024 Rate | ||
| From | To | From | To | ||
| 0 | $18,200 | nil | 0 | $18,200 | nil |
| $18,201 | $45,000 | 19% | $18,201 | $45,000 | 16% |
| $45,001 | $120,000 | 32.5% | $45,001 | $135,000 | 30% |
| $120,001 | $180,000 | 37% | $135,001 | $190,000 | 37% |
| Over $180,000 | 45% | Over $190,000 | 45% | ||
Not quite the tax changes that were promised a few years back!
b. Late Payments of Superannuation.
Real risk of sounding like nagging accountants here. This is unnecessarily costing business owners big money.
If your employee superannuation is not received into their fund, on or before the 28th day of the month following each quarter, you are in a world of pain.
That pain involves significant administrative processes with the ATO, loss of deductibility of the actual super payments, up to 200% penalties, interest at 10% (until you finally realise the error and eventually fix the problem), and directors are personally liable for unpaid SGC. There is no flexibility and the ATO are data matching right now.
Don’t blame your bookkeeper. They are probably unaware of the strictness of this rule and the consequence of getting it even slightly wrong… by just one day. This is your problem. <full ATO details here>
c. More Super please.
As from 1 July 2024, the Concessional (deductible) contribution cap (limit) is due to increase from $27,500 per annum to $30,000 per annum.
The Non -Concessional (non-deductable) contribution cap also rises from $110,000 per annum to $120,000 per annum. And you can still bring forward three years and contribute $360,000 as from 1 July 2024.
If you were able to contribute $110,000 on 30 June 2024, you potentially could then contribute another $360,000 the next day. Total $470,000 (and perhaps also for your spouse). Together with two 2025 concessional contributions, that’s $1m into super (if your circumstances allow). That’s a big top up.
d. Data Matching.
The never-ending quest by the ATO to uncover mismatches between data sources and reported income (and deductions), continues with new vigour.
This month sees the ATO matching Rental Bond records with reported rental income (to locate taxpayers who inadvertently left out all those rental properties) and matching Novated Lease records with employee tax returns (to locate those taxpayers who inadvertently claimed vehicle expenses now paid by their employers).
Best to be honest.
e. Vacant Residential Land Tax.
The creativity of the Victorian Government never ceases to amaze. There is a significant expansion of the VRLT tax for two types of vacant properties.
The Vacant Residential Land Tax primarily relates to residential properties that are:
• unoccupied for more than 6 months a year, or
• Being constructed or renovated and have been uninhabitable for 2 years since the building permit was issued.
And the tax?
• 1% pa of the capital improved value in the first year of vacancy
• 2% pa of the capital improved value in the second year of vacancy
• 3% pa of the capital improved value in the third year of vacancy
Ouch! But there are exemptions. The main one is for Holiday Home (must be owned by an individual and one only exemption) that is used & occupied for at least 4 weeks (in total) each year.
The other property type to be taxed is Vacant Land. From 1 July 2026, the tax will also apply to unimproved residential land that has been unimproved for 5 years in Metro Melbourne.
Naturally there are heaps of rules around all these new provisions and the SRO has kindly documented them for our reference <VRLT>.