Federal Budget 2023 2024

The key tax measures in the 2023-2024 Federal Budget are summarised below. 

Overview 

The Labor Government's second Federal Budget attempts what some economists believe may be the impossible – undertaking a significant ($14.6 billion) cost-of-living spending plan to provide relief for struggling Australians without adding to inflationary pressures.

The cost-of-living relief measure includes introducing energy bill relief, rent assistance for low-income households and bulk billing incentives, expanding the pharmaceutical benefits scheme, and increases to single parent benefits, JobKeeper payments and aged care worker pay.  These are all laudable measures that will be welcomed by those Australians suffering from inflation and higher interest rates.  There is also a focus on the switch to renewable energy, including the new Hydrogen Headstart program to support hydrogen energy production, tax incentives for small businesses to electrify and become more energy efficient, as well as tax incentives for investing in certain energy efficient buildings.

However, the price of a high spending budget is that the tantalising glimpse of the first budget surplus in 15 years for 2022/23 (a modest $4.2 billion bolstered by high commodity prices) is forecast to become an ugly $13.9 billion deficit in 2023/24 with deficits in the following three years.  

The test will be what impact the Budget may have (or be perceived to have) on employment, inflation, interest rates and the economy generally over the coming months.  There appear to be global headwinds to which Australia is not immune.

General Measures 

Pillar Two: Global Minimum Tax and Domestic Minimum Tax

The Government has announced its commitment to implement key aspects of the OECD/G20 Pillar Two measures to address tax challenges arising from digitalisation of the economy.

Pillar Two is part of a two pillar solution coming out of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) to reform the international corporate tax system to better address increasing globalisation and digitalisation.  Pillar Two is designed to ensure that large multinationals pay an effective minimum level of tax of 15% and is targeted at preventing a 'race to the bottom' in global corporate tax.

The key aspects being implemented by Australia are:

• Domestic Minimum Tax – applying to income years starting on or after 1 January 2024
• Income Inclusion Rule – applying to income years starting on or after 1 January 2024
• Undertaxed Profits Rule – applying to income years starting on or after 1 January 2025

The above measures will be based on the OECD Global anti-Base Erosion (GloBE) Rules which were released by the OECD in December 2021 (and associated commentary and examples that have been issued since that time).  The measures will apply to large multinational groups with annual global revenue of Euro 750 million or more per year.  Certain types of entities such as government entities, pension funds, non-profit organisations, international organisations and some investment funds are excluded from the measures.

The Domestic Minimum Tax will ensure that a large multinational company's effective Australian tax rate is at least 15% by giving Australia the first claim to a top-up tax if that rate is below 15%.  Under the GloBE Rules, the implementation of the Income Inclusion Rule will allow Australia to tax an Australian "parent" in a large multinational group where its foreign subsidiary is being taxed below the global minimum tax rate of 15% and top-up the minimum tax level to 15%.  The implementation of the Undertaxed Profits Rule allows Australia to tax a share of the large multinational group's income where that income is taxed below the global minimum tax rate and another country has not applied an Income Inclusion Rule to top-up the tax to 15%.

Franking credits are expected to be generated by the Domestic Minimum Tax but not by the Income Inclusion Rule nor the Undertaxed Profits Rule (as they are seen as being paid in lieu of foreign tax).   

The application dates above are in line with Pillar Two implementation announcements made by a number of other foreign countries or supranational bodies (such as the UK and the EU) and is broadly in line with the OECD implementation timelines.  Draft legislation will be provided for public comment and the final legislation will be submitted to an OECD peer review process.

The Government will consider further the interactions of Pillar Two with Australia's Multinational Tax Integrity Package (including denial of deductions for payments in respect of intangibles to low tax jurisdictions, thin capitalisation changes and multinational tax transparency changes) during the implementation.

The announcement does not mention the implementation of the Subject To Tax Rule, also an element of Pillar Two, which requires a minimum tax rate of 9% on the gross amount of certain related party cross-border payments.  The Subject To Tax Rule is expected to be implemented through bilateral tax treaty changes.

Expanding the reach of the General Anti-Avoidance Rules

In an unexpected announcement, the Government has continued to strengthen the scope of its general anti-avoidance rules (Part IVA). As set out in the Budget the expanded scope will apply to schemes:  

• That reduce tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents;
• That achieve an Australian income tax benefit, even where the dominant purpose was to reduce foreign income tax. 

In respect of the withholding tax rate amendment, the measure deals with a technical defect under current law whereby a tax benefit only arises where a liability to withholding tax is eliminated, not where the liability to withholding tax is merely reduced.

The scope of the second amendment is not entirely clear, but we expect that it is intended to prevent taxpayers from using a dominant foreign tax avoidance purpose as a defence to Part IVA where there is also an Australian tax benefit, albeit that the purpose of obtaining the Australian tax benefit is subsidiary to the foreign one.  Similar provisions already apply under the principal purpose test in the multinational anti-avoidance law (MAAL) and diverted profits tax provisions of Part IVA.

This measure is to apply to income years commencing on or after 1 July 2024, regardless of when the scheme was entered into. There is no grandfathering proposed under the measure, so taxpayers will need to consider whether an any current arrangements may come into scope of the new measures. It is hoped that, as it did with the MAAL and anti-hybrid rules, the ATO will release guidance for taxpayers who wish to restructure to comply with the new rules to confirm what types of restructure will be acceptable and will not, of themselves, trigger the application of Part IVA.

Distributions funded by capital raisings 

The start date of the 2016–17 MYEFO measure: Tax integrity – franked distributions funded by capital raisings has been revised from 19 September 2016 to 15 September 2022. This start date is not a new announcement and is consistent with the Treasury Laws Amendment (2023 Measures No 1) Bill 2023 (the Bill) introduced to Parliament in February this year. The Bill is currently before the Senate Economic Legislation Committee.

Broadly, the amendments in the Bill will result in certain distributions that are funded by capital raisings being treated as unfrankable. Where applicable, the amendments seek to prevent distributions from being frankable that are made outside of or in addition to a company's normal dividend cycle and that are funded directly or indirectly from capital raising activities. 

Real Estate 

Build-to-Rent projects

The Government has announced two tax measures to increase the attractiveness of investing in the Build-to-Rent (BTR) sector, which apply to "BTR projects" where construction commences after 7:30 PM on 9 May 2023:

• The rate of capital works deductions will be increased from a rate of 2.5% to 4%.  It is understood that this will apply from 1 July 2023; and
• A restoration of the managed investment trust withholding rate to 15% from 30% from 1 July 2024 for residential BTR projects, where fund payments are paid to residents in an exchange of information jurisdiction.  The 30% rate has applied to BTR assets since 1 July 2019 (subject to certain transitional measures).

The measures will apply only to "BTR projects", which requires that the project consists of 50 or more apartments or dwelling made available for rent to the general public.  The dwellings must be retained under single ownership for at least 10 years before being able to be sold, and landlords must offer a lease term of at least 3 years for each dwelling.  Some of these elements are similar to stamp duty or land tax concessions, although it is not currently clear how MIT withholding tax may be clawed back (or depreciation reversed) with respect to a failure to comply with the 10 year holding requirement under single ownership.

The Government will undertake consultation on the implementation details, including any requirements around there being a potential minimum proportion of dwellings that must be offered as affordable tenancies, as well as the period it must be retained under single ownership.  Care will need to be taken to ensure that those restrictions do not disincentivise investment in this space, noting that no equivalent requirements arise for other real estate sectors in order to obtain the 15% MIT withholding tax rate.

Clean Building MIT Concession

The Government has announced changes to the clean building managed investment trust (MIT) regime, which seeks to encourage investment in energy efficient commercial buildings by withholding MITs.  The measure will alter the requirements for a trust to qualify as a clean building MIT, and therefore be eligible for the concessional 10% withholding tax rate on distributions to residents in exchange of information jurisdictions, to:

• expand the categories of clean buildings which a withholding MIT may hold in order to be eligible for the concession from 1 July 2025 to include data centres and warehouses for which construction commenced after 7:30pm on 9 May 2023. This extends the existing "clean building" categories which broadly require a withholding MIT to hold one or more commercial buildings used as offices, shopping centres or hotels for short-term accommodation; and
• increase the minimum "clean building" energy rating requirements for all buildings to at least a 6 Star Green Star rating as certified by the Green Building Council of Australia (as opposed to the existing 5 Star Green Star minimum rating) or a 6 Star energy rating as accredited by the National Australian Built Environment Rating System (as opposed to the existing 5.5 Star energy rating minimum rating). The announcements indicate that transitional arrangements are contemplated for clean buildings which satisfy the current minimum ratings but will not meet the new minimum ratings at the commencement of the changes, and it is not entirely clear when the changes with respect to the rating requirements will take effect.  Consultation on these transitional arrangements is anticipated.

Mining 

Petroleum Resource Rent Tax (PRRT) changes

As announced by the Treasurer on 7 May 2021, the Government proposes to amend the PRRT.  The changes respond to the Treasury Gas Transfer Pricing Review (GTP Review) (released by the Treasurer on 7 May 2023) and the earlier Callaghan Review released by the former Coalition Government in 2018.

The Government proposes to proceed with 8 out of 11 recommendations made by the GTP Review and 8 recommendations made by the Callaghan Review.

A key proposed change is introducing a deductions cap which broadly limits the amount of deductions that can be applied to offset assessable PRRT receipts.  The cap only applies to liquefied natural gas (LNG) producers.  For LNG producers, the cap will limit deductible expenditure to the value of 90% of PRRT assessable receipts in respect of each project interest for an income year (after mandatory transfers of exploration expenditure). The cap is intended to bring forward the time at which projects in the offshore LNG industry would be subject to PRRT. Projects are not subject to the cap until the later of 7 years after the year of first production or 1 July 2023.  Certain classes of expenditure (namely closing-down expenditure, starting base expenditure and resource tax expenditure) are excluded from the cap.  Expenditure that is unable to be deducted because of the cap may be carried forward and uplifted at the Government long-term bond rate.

The Government will also make supporting changes, applicable from 1 July 2023, to the gas transfer pricing arrangements in the PRRT and update the PRRT general anti-avoidance and arm's length rules.  Other changes (which are proposed to apply form 1 July 2024) include modifying the manner in losses are shared between notional upstream and downstream entities as well as other integrity rules and changes addressing compliance matters.

The proposed changes are expected to raise $2.4 billion over five years from 2022/23 and the final design of the proposed amendments will be subject to ongoing consultation.

"Exploration for petroleum" – Further PRRT changes

Section 37 of the Petroleum Resources Rent Tax Assessment Act 1987 (Cth) (PRRTAA) allows a deduction for certain "exploration expenditure". Relevantly this includes some types of expenditure incurred in relation to operations and facilities "involved in or in connection with exploration for petroleum". 

The Government will amend the PRRTAA to clarify that "exploration for petroleum" is limited to "the discovery of identification of the existence, extent and nature" of a petroleum resource. The changes will make clear that "exploration for petroleum" does not include "activities and feasibility studies directed at evaluating whether the resource is commercially viable". 

This amendment follows the decision in Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2 (Shell Energy). In Shell, the Full Federal Court found that the concept of "exploration" for the purposes of the capital allowance rules in the income tax law should be interpreted broadly, to include activities directed at investigating the commercial recoverability of petroleum. The decision in Shell does not concern the PRRT rules. See below for a discussion of changes to the legislative provisions considered in Shell.  

The change also seeks to align the PRRT provisions with the Commissioner of Taxation's views set out in Taxation Ruling: TR 2014/9 - Petroleum resource rent tax: what does 'involved in or in connection with exploration for petroleum' mean? (TR 2014/9). 

Clarifying the treatment of mining, quarrying and prospecting rights

Two aspects of the Federal Court's decision in Commissioner of Taxation v Shell Energy Holdings Australia Limited [2022] FCAFC 2 will be reversed as a result of tonight's announcements.

Shell Energy involved the acquisition by Shell from Chevron Australia of an additional proportional interest in certain mining, quarrying and prospecting rights (MQPRs) in which they already held an interest as a joint venturer with Chevron, amongst others.  Shell claimed a deduction of approximately $2.3 billion for the cost of acquiring the additional proportional interest in the MQPRs, on the basis of it first using those MQPRs for "exploration or prospecting".  One of the MQPRs in which Shell held an interest was acquired by Shell prior to 1 July 2001 and the remaining MQPRs were derived from exploration permits that were held by Shell prior to 1 July 2001.  

In general, taxpayers are entitled to capital allowance (tax depreciation) deductions for MQPRs.  However, under transitional provisions, taxpayers are not entitled to tax depreciation for MQPRs which they started to hold before 1 July 2001, including in situations where the MQPR held before 1 July 2001 ends and is replaced by a new right that relates to the same area, or any difference in size is not significant.  In Shell Energy, the Commissioner argued that transitional provisions applied to disallow any tax depreciation deductions for Shell.  However, the Federal Court held that the transitional provision did not apply, because Shell only started to hold the rights in the additional proportional interest after 1 July 2001, as a consequence of acquiring Chevron's participating interest, and further held that the rights were not a replacement for, or the successor to, a right that had ended, as Shell's proportional interest which it held prior to the acquisition of Chevron's interest had not come to an end.

Tonight's announcement states that the law will be amended to "limit the circumstances in which the issue of new rights over areas covered by existing rights lead to tax adjustments".  While it is not entirely clear what the amendments will cover, it appears intended to overcome the outcome in Shell Energy.

Another aspect of the decision that will be reversed is the time from which tax depreciation can be claimed for MQPRs.  In general, taxpayers are entitled to tax depreciation deductions in relation to depreciating assets that they hold, commencing at the "start time" for the depreciating asset, which is defined to include when that asset is first used or is held installed ready for use for any purpose.  In Shell Energy, the Full Federal Court held that a bundle of rights, such as an MQPR, is installed ready for use once held for use, meaning that in practice, tax depreciation can be claimed from the time that it is held, regardless of when the MQPR starts to be used.  

Tonight's announcement will effectively reverse this aspect of the decision so that MQPRs cannot be depreciated for income tax purposes until they are used (not merely held).

The amendments will apply to all MQPRs acquired or started to be used after 7.30pm on 9 May 2023.

Reform of the Product Stewardship for Oil Scheme

The Government has announced that it will increase the Product Stewardship for Oil (PSO) Scheme levy by 5.7 cents from 1 July 2023. This will increase the PSO levy from 8.5 cents to 14.2 cents per litre for specific oils and greases, such as petroleum jelly and paraffinic process oil. The expected objective is to make the PSO Scheme more sustainable.

The PSO Scheme was introduced in 2001 to encourage the management and re-refining of recycled oil. The Scheme imposes a levy on producers and importers of oil-based lubricants, with those levies funding a product stewardship oil benefit which is paid as an incentive through the ATO to businesses who sell or consume recycled oil. 

General insurance

Alignment of tax and accounting treatment of general insurance contracts

The Government has announced changes to relieve the compliance burden imposed on general insurers that would otherwise arise from the impending new accounting standard AASB 17 Insurance Contracts. 

Presently, introduction of the new standard would result in a timing mismatch between when profits from insurance contracts are brought to account for accounting and tax purposes. 

The tax law will be amended to allow general insurers to continue to use audited financial reporting information, calculated according to the new standard, as the basis for their tax returns.
The measure is expected to have effect for income years commencing on or after 1 January 2023, which aligns with the date that AASB 17 is generally effective.

Small Business Support

The Government has announced three measures primarily aimed at supporting small businesses by improving their cash flow and incentivising improvements to energy efficiency:

• The "GDP adjustment factor" for Pay As You Go (PAYG) and GST instalments is to be set at 6 per cent for the 2023-24 income year (one half of the statutory formula) for small businesses and individuals who are eligible to use the relevant instalment methods (up to $10 million aggregated turnover for GST instalments and $50 million aggregated turnover for PAYG instalments).  This change will apply to instalments for the 2023-24 income year falling due after the enabling legislation receives Royal Assent.  By way of background, a business taxpayer's instalments are estimated by the ATO based on its tax return for the prior income year increased by the GDP adjustment factor (which is based on changes in Australia’s GDP).  The taxpayer can vary down its instalments but faces penalties if it underestimates its final tax liability.  This measure should provide cash flow support especially for small businesses.
• The instant asset write-off threshold will be temporarily increased from $1,000 to $20,000, from 1 July 2023 until 30 June 2024 for businesses with aggregated turnover of less than $10 million.  Qualifying taxpayers will be able to immediately deduct (on a per asset basis) the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024.  This is a much more modest measure than existed during the COVID-era and applies to a smaller group of taxpayers.
• Businesses with aggregated turnover of less than $50 million will be able to deduct an additional 20 per cent of the cost of eligible depreciating assets that support electrification and more efficient use of energy, capped at $20,000 (ie, up to $100,000 of qualifying expenditure).  Eligible assets will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.  Eligible upgrades will also need to be made in this period.  The announcement provides examples of qualifying assets (eg, energy-efficient fridges, heat pumps, batteries) and non-qualifying assets (eg, electric vehicles, generators, capital works).  Full details of eligibility criteria will be finalised in consultation with stakeholders.

Superannuation and personal tax

Increased superannuation tax

The Government has committed to its well-publicised measure to raise the tax rate on superannuation balances greater than $3 million.  Currently, investment earnings within superannuation accounts are taxed at 15 per cent.  From 1 July 2025, a 30 per cent tax rate will apply to the proportion of earnings attributable to an individual's total superannuation balance (TSB) above the $3 million threshold.  

Interests in defined benefit schemes are intended to be similarly treated through a valuation process, although the Government has not revealed the precise mechanism by which this will occur.

In a Consultation Paper released at the end of March 2023, the Government foreshadowed the tax liability being levied at the individual level (similar to Division 293 tax) rather than at the fund level.  Individuals would then have a choice to pay the tax from their own assets or release funds from their superannuation account to fund the tax payment.  

The Consultation Paper also foreshadowed that the $3 million threshold would be tested on the last day of the financial year and will not be indexed.  It indicates that earnings will be calculated based on the change in TSB over the year, adjusted for withdrawals and contributions.  This means that unrealised gains may be subject to tax, a highly criticised feature of the current proposed implementation.  Negative earnings can be carried forward to offset future earnings.

Treasury is in the process of considering public submissions in response to the Consultation Paper.

Increased payment frequency of superannuation entitlements

Employers will be required to make superannuation contributions in respect of their employees on the same day as salary and wages are paid from 1 July 2026.

Currently, in order to avoid the requirement to pay the superannuation guarantee charge, employers are required to make superannuation contributions in respect of their employees by the 28th day after the end of the relevant quarter.  The proposed change is intended to give employees better visibility over whether their superannuation entitlements have been paid and better enable the ATO to recover unpaid superannuation through imposition of the superannuation guarantee charge (SGC).  It should also support increased superannuation balances on retirement as more frequent contributions allow investment earnings to accrue from earlier dates, with the government estimating that a 25 year old median income earner could be around $6,000 better off at retirement. 

Changes to the design of the SGC will be required to implement this change and a consultation process will be conducted.  The final design will be considered as part of the 2024-25 budget. 

Eligible lump sum payments in arrears exempt from Medicare Levy for low income earners

From 1 July 2024, eligible lump sum payments in arrears (LSPIAs) will be exempted from the Medicare levy for low income earners.  Taxpayers will be able to access this exemption if:

• they were eligible for a reduction in the Medicare Levy in the two most recent years to which the lump sum accrues; and 
• they satisfy the eligibility requirements for the LSPIA tax offset, which broadly requires the amount of income in arrears to be not less than 10% of the taxpayer's taxable income in the year of receipt (after deducting certain amounts, such as employment termination payments and net capital gains). 

This measure is intended to ensure that low income earners who receive lump sum payments containing amounts that accrued in earlier income years (such as underpayment remediation amounts) will not be required to pay more Medicare levy than would otherwise have been payable in the year in which the lump sum was received had those amounts been paid in the years in which they accrued.

The exemption will complement the LSPIA tax offsets that are currently available for both income tax and the Medicare levy surcharge.

Additional funding for compliance programs

The Government has announced that it will provide funding for a broad range of ATO compliance programs, and specifically:

• The Serious Financial Crime Taskforce (SFCT) and Serious Organised Crime (SOC) program 

The SFCT and SOC are currently separate ATO-led cross-agency collaborations between the ATO, national policing and other law enforcement and regulatory agencies. The programs target serious and organised crime groups and serious and complex forms of financial crime and tax evasion.

Funding for both of these programs currently terminates on 30 June 2023. The Government will merge the SFCT and SOC programs, and a merged SFCT will commence from 1 July 2023. The Government will also extend funding for these programs providing over $200 million over 4 years to 30 June 2027. An extension and merging of these two programs is intended to maximise the disruption of organised crime groups.

• Extension of GST Compliance Program 

To continue to promote GST compliance, the Government has committed over $580m in funding to the ATO to renew the GST Compliance Program for a further four years until 2027.

The GST Compliance Program commenced in 2010 and, since its inception, has focused on ensuring that taxpayers are correctly registered for GST and accounting for associated GST liabilities, doubling down on fraudulent GST refunds and improving direct contact between the ATO and non-lodgers and taxpayers with GST debts.  The new funding will be dedicated towards furthering these goals and investing in sophisticated data analytical tools to allow the ATO to stay at the forefront of emerging risks to the GST system. 

The ATO has recognised in its recent GST Administration Annual Performance Report 2021-22 that it took a somewhat "accommodative" approach to tax compliance during the COVID-19 pandemic, with the focus being on maintaining taxpayer engagement and encouraging voluntary compliance.  With the COVID-19 pandemic and its effects almost a distant memory, it appears that the ATO will be looking to use its increased funding to really clamp down on non-compliance and fraudulent behaviour in a firmer and stronger manner.  

• Engaging with taxpayers to ensure timely payment of tax and superannuation liabilities 

The Government will provide additional funding of $82.1 million to the ATO over 4 years from 1 July 2023 to enable the ATO to engage more effectively with businesses to facilitate payment of tax and superannuation liabilities.

The measure is intended to facilitate the ATO engagement with taxpayers who are public companies or multinational groups with an aggregated turnover of more than $10 million, privately owned groups and individuals who control over $5 million of net wealth, where such taxpayers have high value debts over $100,000 or aged debts older than 2 years.

The ATO will also provide a lodgement penalty amnesty program for small businesses with aggregate turnover of less than $10 million to encourage them to re-engage with the tax system. Under the amnesty, failure-to-lodge penalties for outstanding tax statements lodged in the period from 1 June 2023 to 31 December 2023 which were originally due during the period from 1 December 2019 to 29 February 2022 will be remitted.

• The Personal Income Tax Compliance Program 

The Government will provide $89.6 million to the ATO and $1.2 million to the Treasury to extend this program for two years from 1 July 2025 and expand its scope from 1 July 2023. This extension is intended to enable the ATO to continue its activities in key areas of non-compliance, and to expand the scope of the program to address emerging areas of risk, such as deductions relating to short-term rental properties to ensure they are genuinely available to rent.

• Superannuation guarantee compliance 

Additional funding of $40.2 million will be provided by the Government to the ATO in 2023-24, which includes $27.0 million for the ATO to improve data matching capabilities to identify and act on cases of superannuation guarantee underpayment by employers and $13.2 million for consultation and co-design.

• Public registry of beneficial ownership 

The Government will provide $1.9 million over two years from 2023-24 to establish a public registry of beneficial ownership of companies and other legal vehicles.

• Increased disclosure of ACNC's regulatory activities 

Funding of $2.9 million will be provided by the Government over 4 years from 2023-24 (and $0.6 million per year ongoing) to the ATO to enable increased disclosure of the Australian Charities and Not-for-profits Commission's regulatory activities. This measure is intended to enhance transparency and accountability in the charity sector.

Previous Budget Announcements 

Patent box regimes 

The Government has announced it will not proceed with three patent box regimes announced in the 2021-2022 and March 2022-2023 Federal Budgets. 

By way of background, the former Government announced its intention to introduce a patent box regime for medical, biotechnology and possibly clean energy patents, aligned with OECD Guidance.  It was intended that from 1 July 2022, companies deriving income from certain patents could access a concessional corporate tax rate of 17%.  The regime was intended to encourage Australian design and innovation in various industries.  The legislation to implement the patent box lapsed when the 2022 Federal Election was called, and the Government has now confirmed that these regimes will no longer be proceeding.

Sunsetting eligibility of plug-in electric cars exemption from fringe benefits tax 

The Government has confirmed, consistent with the relevant legislation, that it will sunset the eligibility of plug-in hybrid electric cars from the fringe benefits tax exemption for certain electric cars from 1 April 2025. Arrangements involving plug-in hybrid electric cars entered into from 1 July 2022 to 31 March 2025 remain eligible to access the exemption.

Authors: Vivian Chang, Partner; Steve Whittington, Partner; Sanjay Wavde, Partner; Ian Kellock, Partner; Colin Little, Partner; Vanja Podinic, Partner; Costa Koutsis, Partner; Elke Bremner, Partner.