The Federal Budget did not deliver much to businesses other than the extension of the immediate asset write off for eligible assets of up to $20,000 for small businesses. Much of the focus was on integrity measures to protect the revenue base.
1. Extension of Immediate Asset Write Off of up to $20,000 for Small Businesses
For the 2019 tax year businesses with an aggregated turnover of less that $10.0m will be able to immediately deduct purchases of eligible assets costing less than $20,000 provided that the asset is first used or installed ready for use by 30 June 2019.
2. Extension of industries subject to Taxable Payments Reporting System
The taxable payments reporting system (TPRS) currently only applies to the following industries:
- construction and building industry
- cleaning industry
- courier industry
From 1 July 2019 the TPRS will also apply to the following industries:
- security providers and investigation services
- road freight transport
- computer system design and related services
3. Removal of tax deductibility of non-compliant payments
From 1 July 2019 businesses will no longer be able to claim a tax deduction for payments to their employees (such as salary and wages) where they have not withheld any amount of PAYG from these payments despite the PAYG withholding requirements applying.
This will also be extended to preclude a tax deduction for payments made to contractors where that contractor does not provide an ABN and the business does not withhold any amount of PAYG despite the PAYG withholding requirements applying.
4. Small Business CGT Concessions and Everett Assignments
With affect from 7.30pm last night (8 May 2018) partners that alienate income through assigning or otherwise dealing in rights to future income will no longer be able to access the small business CGT concessions in relation to a disposal of those rights.
5. Circular Trust Distributions
Anti avoidance rules will be introduced to tax circular trust distributions at the top marginal rate plus Medicare Levey with affect from 1 July 2019.
A circular distribution is a distribution of net income that is paid from Trust A that then makes its way through one or more related entities and is ultimately returned to the original trust. It is arguable that current anti avoidance provisions (including section 100A of the ITAA 1936 dealing with Reimbursement Agreements) are strong enough to curtail this practice.
6. Employees aged between 45-70
If you are aged between 45 and 70 you will be pleased to know that the Government refer to you as Mature Age Australians. The good news is that they are looking to support you and your employer through the following:
- over 3 years from the 2018/19 financial year the Government will provide training funding of up to $2000 to reskilling or upskilling opportunities where the Government contribution is matched by the worker or their current employer.
If you would like further information regarding how the Federal Budget may impact your business please contact the office 03 9629 1433