The coalition has delivered their 5th Federal Budget and this year, Scott Morrison’s theme of “living within their means” was focused on delivering income tax cuts, providing essential services and returning to a surplus a year earlier than previously outlined.

Here are the key areas that may impact you and your business:

Income Tax

• A seven-year Personal Income Tax Plan will be implemented in three steps, to introduce a low and middle income tax offset, to provide relief from bracket creep and to remove the 37% personal income tax bracket. The Medicare levy to be retained at 2%.
• Significant changes to the calculation of the R&D tax incentive will commence for income years beginning on or after 1 July 2018. Additionally, a maximum cash refund will also apply for some entities.
• The $20,000 instant asset write-off will be extended for small businesses by another year to 30 June 2019.
• Amendments to Division 7A will strengthen the unpaid present entitlements (UPE) rules from 1 July 2019.
• Deductions for expenses associated with holding vacant land not genuinely used to earn assessable income will be denied.
• The concessional tax rates for the income of minors from testamentary trusts will not be available for trust assets unrelated to the deceased estate.

Superannuation

• The maximum number of allowable members in SMSFs and small APRA funds will be increased to six from 1 July 2019.
• The annual audit requirement for self-managed superannuation funds will be changed to a three-yearly requirement for funds with a history of good record keeping and compliance.
• Individuals whose income exceeds $263,157, and have multiple employers, will be able to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG) from 1 July 2018.
• An exemption from the work test for voluntary contributions to superannuation will be introduced from 1 July 2019 for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements.

Black economy measures

• The taxable payments reporting system for payments to contractors will be expanded to include security services, road freight transport and computer system design industries, effective from 1 July 2019.
• Business seeking to tender for Australian government contracts above $4m (including GST) will need to provide a statement of compliance with their tax obligations, from 1 July 2019.
• Businesses can no longer receive cash payments above $10,000 for goods and services, from 1 July 2019.

Indirect taxes

• Offshore sellers of hotel accommodation in Australia will be required to calculate their GST turnover in the same way as local sellers from 1 July 2019.
• The luxury car tax on cars re-imported into Australia, following a refurbishment overseas, will be removed from 1 January 2019.

For a more in-depth coverage please click here.

DISCLAIMER: The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.