What the FY25 Federal Budget means for your business

Understanding the tax and financial implications of Australia’s Federal Budget 2024/2025

The Federal Budget 2024/2025 has officially been announced. There were no big surprises for you and your business this year. Most of the changes presented in the budget had been announced and discussed well before budget night. But, there are some changes you should be aware of. We know how busy you are as a business owner, so we’ve summarised it for you below. 

Tax Incentive for Business Owners – $20,000 instant asset write-off extended

Small businesses with a turnover of less than $10m can claim an immediate tax deduction for the full cost of eligible assets costing less than $20,000. These purchases must be installed and ready for use in your business between 1 July 2024 and 30 June 2025. The threshold applies to each individual asset, allowing for multiple claims at a cost of up to $20,000 each. There is the possibility that this threshold will be increased to $30,000 before this is passed into law, based on the response from the opposition.

Energy bill relief

From 1 July 2024, eligible small businesses (those with aggregated turnover of up to $10 million per year) will receive rebates of up to $325 under the new power bill relief initiative. This is in addition to the $400 in energy bill relief announced by the Western Australian Government as part of the 2024-25 State Budget announced on 9 May 2024.

What about my payroll? 

All businesses will need to make sure that their payroll system is fully up to date from 1 July 2024 to align with the new personal tax rates and thresholds and changes to super guarantee. 

Empowerment to innovate – incentives you can take advantage of

This year’s budget provided a distinctive commitment to fostering a more innovative, competitive and sustainable Australia. This includes the $22.7B “Future Made in Australia” package, which includes: 

Research and development tax incentive 

Government support for increased investment in R&D is music to the ears of many business owners. The government is expected to increase payments by $499M in 2024-2025, with an additional expectation of $2.6B over five years. This growth comes from an expected increase in research and development spending across construction, professional, mining, scientific and technical service sectors.  

Critical minerals production tax incentive 

A $7b incentive to support the downstream refining and processing of Australia’s 31 listed critical minerals to improve supply chain resilience has been announced. The production incentive is intended for critical minerals processed between financial years 2027/2028 and 2040/2041, with up to 10 years per project, and valued at 10% of relevant refining and processing costs. 

Hydrogen production tax incentive 

Lastly, the Government is backing a $6.7b incentive for producers of renewable hydrogen. This aims to support the growth of the evolving hydrogen industry and Australia’s decarbonisation overall. This incentive will be inclusive of renewable hydrogen produced between financial years 2027-28 to 2040-41 and valued at $2 per kilogram.  

It is worth noting that the response from Peter Dutton to these Budget announcements indicates that there will be opposition to these two key production incentive measures. As a result, the Government may face some difficulties getting these incentives passed into law in their proposed format.  

That just about summarises what this year’s budget means for business owners.  Why not read about the implications for yourself and your family too? Check it out here. 

If you have any questions or concerns about what the budget could mean for your business, speak to your Knight partner. If you don’t have one yet, we can’t wait to meet you – you can book an appointment with one of our friendly staff here.