This week’s Federal Budget focussed on easing cost of living pressures, whilst also being the last budget before the upcoming election in May.
The key announcements which could impact medicos are as follows.
Technology Investment Boost
The Technology Investment Boost will allow small medical businesses with aggregated annual turnover of less than $50 million to claim an additional 20% of their costs incurred on business expenses and depreciating assets supporting their digital adoption. This boost will apply to eligible expenditure incurred from 29 March 2022 until 30 June 2023, and will be limited to an annual cap of $100,000.
For eligible expenditure incurred by 30 June 2022 under the above incentives, the 20% boost will be claimed in the 30 June 2023 income year. However, the 20% boost on eligible expenditure incurred from 1 July 2022 to 30 June 2023 or 2024 (depending on the incentive) will be claimed in the financial year the expenditure is incurred.
Skills & Training Boost
The Skills and Training Boost will allow small medical businesses with aggregated annual turnover of less than $50 million to deduct an additional 20% of expenditure incurred on external training courses provided to employees.
To be eligible for the boost, the external training courses will need to be delivered by entities registered in Australia, provided to employees in Australia (or online), and incurred from 29 March 2022 until 30 June 2024. Specific expenditure will be excluded from this boost, including in-house training, on-the-job training and training courses for persons other than employees.
Low and Middle Income Tax Offset
Junior doctors could receive an additional $420 as part of the Low & Middle Income Tax Offset (LMITO) for its final year. The offset is available to doctors with taxable incomes up to $126,000 on lodgement of their tax return.
Deductibility of COVID-19 tests
From 1 July 2021, the cost of obtaining COVID-19 tests required to attend a place of work will be tax deductible to employees. This also ensures that these expenses will be exempt from Fringe Benefits Tax for employers who provide tests or reimburse these costs to their employees.
Tax Avoidance Taskforce
The ATO Tax Avoidance Taskforce aims to ensure that multinationals, large public and private groups, trusts and high wealth individuals “pay the right amount of tax” by conducting reviews and audits. The Government will provide further funding of $652.6 million to extend the Taskforce by two years to 30 June 2025. It is expected that this additional funding will raise $2.1 billion of tax liabilities. As a result, we expect more audits to be on the way for medical practitioners.
Other measures in the budget include:
- Reducing the fuel excise tax by $0.22/litre for the next 6 months.
- $353.9 million invested over the next 4 years in a women’s health package, with funding for cervical and breast cancer, endometriosis and reproductive health.
- Expansion to Paid Parental Leave (PPL) by adding flexibility in how leave is taken, as well as eligibility increased to a combined household income of $350,000.
- Spending of $99.3 million over 4 years to train more doctors and nurses in rural areas.
- $230.7 million invested in providing primary care services over the next 5 years, including dental services.
- Investment of $547 million over 5 years for mental health programs.
If you have any questions about how the Federal Budget might impact you or your medical business, please contact Kristy Baxter, Angela Stavropoulos or Janelle Kiernan from the Pilot Medical Services team on [email protected] or 07 3023 1300.