Last night, Malcolm Turnbull announced the Australian budget for 2018/2019. Highlights for small business in Australia:
- $20,000 Instant asset write off scheme has been extended for another 12 months to 30 June 2019 for businesses turning over less than $10m. This is great news for small business.
- Overseas hotel providers will be required to pay GST on their sales to Australia from 01/07/2018. Currently providers like Wotif, Agoda etc. do not add GST to their purchases
- The government is stepping up its pursuit on the black economy. Plans were announced to implement the recommendations of the Black Economy Taskforce targeting sectors where there is higher risk of under reporting of income. Turnbull announced regarding the black economy, ‘It’s not clever. It’s not OK. It’s a crime’
- From 1 July 2019, all cash payments of $10,000 or more for goods and services to business will be outlawed. This means that all payments of $10,000 or more will need to be taken via an electronic method such as bank transfer or merchant facility.
- Taxable Payments Annual Report has been extended to cover three new industries from 2017/2018 year:
- Security and Investigation Services
- Road Freight Transport
- Computer System Design and Related Services
If you are in these industries you will be required to report the payments made to all subcontractors by 28 August 2019 on a Taxable Payments Annual Report.
- Changes to the Research and Development Offset Scheme: The changes will affect companies accessing the R&D Tax Incentive for the income years 2017/2018 onwards. See https://www.business.gov.au/assistance/research-and-development-tax-incentive
The lowered company tax rate is still 27.5% for businesses with an aggregated turnover of less than $25 million. For all other businesses, the company tax rate of 30% applies,
Tax cuts and new tax bracket rules to be implemented over the next seven years were a highlight. Increased low income tax offset for low income earners and an extension of the 32.5% tax bracket from $87K to $90K in the 2018/19 year will affect the take home pay of many middle income earners.
This means for small business, there will be new tax scales to apply as of the first payrun in July 2018. Remember to update your accounting system if you are on a desktop version or ensure your tax tables are current if you are using the cloud.
If you need more information about how these changes apply to your business, contact us