2018/19 Budget Updates

The Treasurer handed down the Budget 2018/2019 on 8 May 2018. While there are a lot of proposed changes that will potentially affect individuals such as a 7 year Personal income Tax Plan to lower the income tax liabilities for individuals, there is no certainty as to whether they will become law in future. Meanwhile, let’s recap on the ones that are now law, and will affect taxpayers, especially small businesses immediately. The most important of these is the extension of the less than $20,000 immediate asset write off concession to 30 June 2019 for eligible small businesses.

$20,000 immediate asset write-off

The $20,000 immediate asset write-off is extended to business assets that are purchased and in use by 30 June 2019. While the rules that apply to the write off do not change, please note that the $20,000 cost is applied on a GST exclusive basis for GST registered entities, or GST inclusive basis for non-GST registered entities. Also the amount is applied on the whole asset cost even when the asset is used for business and personal use.

Taxable payment reporting system expanded to cleaning and courier industries

From 1 July 2018 the ATO will expand the industries required to prepare contractor payment reporting to cleaning and courier industries. The contractor payment reporting system was first introduced to the building and construction industry in 2012 to ensure contractors report all their contract payments in their income tax return. Businesses that pay contract payments are required to prepare and lodge a Taxable Payment Annual Report (TPAR) to include information about the contractors’ basic details including their names, addresses, ABN, payments made to them over the year and include GST paid amounts where applicable. This report is due for lodgement by 28 August every year. If your business is in the industries that require such reporting but do not pay contractors, you will still be required to lodge the TPAR by the due date to avoid late lodgement penalties.

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