Article by Eamonn Lanagan
as featured in the Farm Weekly issue 21 April 2022
LOTS of smoke and very little fire is a fair description of the 2022 Federal Budget announced in the shadow of an election campaign. There are plenty of announcements relating to agriculture and personal benefits but there are not any measures with the excitement of previous year’s Temporary Full Expensing. Telling a client that the purchase of a header is fully tax deductible gets a much better reaction than explaining the intricate changes in the tax treatment of income from Australian Carbon Credit Units (ACCUs) and biodiversity certificates.
A quick summary of the relevant announcements:
Fuel Excise halved from 44.2c/L to 22.1c/L for six months from 30/3/2022
Great if you are filling up in Perth but if you are using fuel off-road on your farm, you were able to claim all the excise back as Fuel Tax Credits in your BAS.
120% Deduction for Training and Digital Adoption
Small businesses (less than $50m turnover) will be able to claim a deduction for 120% of the cost of external staff training and expenses or depreciating assets which support digital uptake.
Income from ACCUs and Biodiversity Certificates to be Primary Production Income
The change in assessment of this income proposed from 1/7/2022 which allows farmers to have this income assessed in the same way as other farm income, eligible for Primary Production Averaging and access to Farm Management Deposits (FMDs) to defer the taxing point of income.
Funding for Northern Australia frontline biosecurity, on-farm biosecurity and enhance pest and disease traceability
Protecting agriculture from current and emerging diseases and threats, including supporting State-based agriculture departments in surveillance and control activities.
Improving Trades and Exports
“Simplified Trade System” and “Digital Services to Take Farmers to Markets” projects which aim to streamline trade processes, reduce the cost and time of exporting and enhance Australian agriculture’s international competitiveness.
Extension of the Patent Box Scheme to Agriculture
Tax incentives for companies to innovate, research and develop the future of agriculture.
Increase to the Low and Middle Income Tax Offset (LMITO)
The maximum LMITO will increase by $420 to $1,500, is available for those who earn up to $126,000 and will be received as a refund of tax paid for 2021/22.
As an election is due in May many of these measures are just announcements, the government will need to be re-elected and then legislate those measures or Labor is elected and decides to adopt and legislate the policies.
Please contact your Byfields accountant to discuss how the announcements will affect your specific situation and long term strategies.
To discuss this article further, we encourage you to contact Eamonn Lanagan on (08) 9674 6400, or your Byfields accountant.
Disclaimer: This content provides general information only, current at the time of production. Any advice in it has been prepared without taking into account your personal circumstances. You should seek professional advice.