The Budget. What you need to know. 

The Federal Budget was handed down last night, which included a number of tax related measures.

With the next election imminent and a change of government a distinct possibility, there is every chance that none of these announcements will ever see the light of day, so please take that into account before you make any decisions based on these announcements.

Calling us regarding matters like this is complimentary, so if you have any questions regarding the budget, please contact our office. 

The key tax proposals announced include:

• Increase in the threshold for immediate write off of depreciable assets for small business to $30,000. This is proposed to apply from 2^nd April 2019 (assuming legislated) until 30 June 2020. This will be available for medium business with turnovers between $10m and $50m. Note that the Government had previously announced its intention to increase the threshold from the current $20,000 to $25,000 from 29^th January 2019 for small business (not medium business). It still plans to proceed with this, however it is not legislated, so buyer beware.

• Increase in the Low and Middle Income Tax Offset for the current 2018-19 financial year to the 2021-22 year from $530 to $1,080. This will provide some benefit to people with incomes of up to $126,000.
• Increase the top of the 19% individual income tax threshold to $45,000 from 1^st July 2022 (currently $37,000).
• Increase the Low Income Tax Offset from $645 to $700 from 1^st July 2022.
• Reduce the individual income tax rate of 32.5% to 30% from 1^st July 2024.
• From 1^st July 2020 individuals aged 65 or 66 will be able to make voluntary contributions to superannuation without having to meet the work test. Furthermore, individuals aged up to and including 74 will be able to receive spouse contributions.
• Those aged 65 and 66 would also be able to access the three year bring forward rule for contributions.

 
There was also very substantial dollars allocated to the Australian Tax Office to undertake more audit and compliance activities.
 
An additional amount will also be given to the Australian Tax Office to target on-time payments of tax and superannuation liabilities.
 
Sham contracting will be in the spotlight with a special unit to be setup to work with the Fair Work Ombudsman.
 
Another interesting announcement was that holders of Australian Business Numbers will be required to confirm their details annually on the Australian Business Register, so watch this space for ABN holders. Not scheduled to come into effect until 1^st July 2022.
 
As mentioned above, these are only proposals so please don’t rely on any of these coming into law. We will keep you up to date as things change.

If you wish to discuss this with your Accountant, please contact Patrick Rowan & Associates  tel: 5221 7655

Patrick Rowan & Associateswww.patrickrowan.com.au