The 2018 Autumn edition of the Business Bulletin is prepared by the Australian Bookkeepers Network.
The full bulletin can be downloaded at the bottom of the page however highlights include:
Instant Asset Write-Off
The $20,000 Small Business Instant Asset Write-Off has been extended for another 12 months. Businesses with an aggregated turnover of less than $10 million will be able to take advantage of the write-off until 30 June 2019 provided that the depreciating asset was acquired and installed ready for use in your business by this date. Before the Budget, this threshold amount was due to revert down to $1, 000 from 1 July 2018. The $20,000 write-off was originally introduced on 12 May 2015 and originally applied to small businesses with an annual aggregated turnover of less than $2 million. Since then the write-off was extended to businesses with an aggregated turnover of less than $10 million.
No Deduction for Non-Compliant Payments to Employees and Contractors
Under this measure, from 1 July 2019 businesses will no longer be able to claim tax deductions for payments to their employees where they have not withheld any amount of PAYG (where PAYG withholding is required).
Deductions Disallowed for Holding Vacant Land
From 1 July 2019, deductions will be disallowed for expenses associated with holding vacant land in circumstances where that land is not genuinely held for the purpose of earning assessable income. An example of a denied deduction is interest on money borrowed to acquire that land. This measure will apply to land held for residential or commercial purposes. However, the “carrying on a business” test will generally exclude land held for commercial development.
Resourcing the ATO
A strong theme to emerge from the Budget is the additional funding that is being allocated to the ATO to help enhance their compliance activities. The Government seems intent on properly resourcing the ATO.
Crackdown on Circular Distributions for Discretionary Trusts
From 1 July 2019, the anti-avoidance rules that currently apply to other closely-held trusts that engage in circular trust distributions will be extended to family trusts. This will prevent the currently available strategy where family trusts act as beneficiaries of each other in a “round-robin” style arrangement whereby a distribution can be returned to the original trustee in a way that avoids any tax being paid on that amount.
Strong Stance on Tax and Super Debts
More than $133 million will be provided to the ATO over four years for it to continue a raft of measures that will sustain and increase debt collections and the timeliness of those collections. This is forecast to reap an extra $1.6 billion in unpaid Superannuation and tax over the coming four years. With such large amounts of revenue set to be recouped, it is recommended that businesses with tax and superannuation debts owing, pay these debts if they are able to do so.
Reigning In The R&D Incentive
The calculation for companies claiming the R&D Tax Incentive will change commencing for financial years beginning on or after 1 July 2018. Also, a maximum cash refund for “smaller” R&D claimants will be capped at $4 million per financial year (a “smaller” R&D claimant is an entity with aggregated annual turnover below $20 million).
Limiting Partnerships Access to Small Business CGT Concessions
Partners in Partnership structures that alienate their income by creating, assigning or otherwise dealing in rights to the future income of a Partnership will from Budget Night no longer have access the Small Business CGT Concessions in relation to these rights.
Cash Payments Limit
In a measure recommended by the Government’s Black Economy (Cash Economy) Taskforce, the Government will introduce a limit of $10,000 for cash payments made to businesses for goods and services that they provide.
Broader Business Conditions
In good news for the business community, the Budget papers forecast that the economy will grow at 2.75% in 2017/2018 (current financial year); jumping to 3% in 2018/2019 and 2019/2020.