Financial news bites for Small Business

The Budget & Superannuation changes are making news. Proposed changes in 2019 have been ‘on again, off again’ in Parliament. And with May elections around the corner, there’s plenty up in the air. As always, if you have questions simply call us.

Here’s a quick run-down of where our tax dollars are going (eye roll) and what this means to Small Business for everyday financial affairs.

1. Superannuation Guarantee (SG) amnesty legislation not enacted.

Introduced last year in May, this bill was set up to simplify SG obligations and provide an amnesty for back or missed contributions. As of 3 April 2019, Parliament did not adopt this law. Employers are required to lodge a Super Guarantee charge statement and pay a $20/per employee per period SG charge. Visit the link for details.

2. Increased small business income tax offset.

Now at 8% with a limit of $1000 each year applies to small business with turnover less than %5 million. This will increase to 13% in 2020-21, See details on this ATO News link.

3. Simplified depreciation rules for instant asset write-off updated.

From 2 April 2019 each asset write-off threshold was increased to $30,000, extended to 30 June 2020. Small business with turnover of less than $10 million/year can immediately deduct the business portion of most assets as long as they were used or purchased before 2 April. The previous limit was $20,000. See details at this ATO News link.

4. Personal Tax Cuts.

With over 2 million SMEs in Australia with sole proprietors making up the majority of all business, this comes as a dose of relief for small business. It’s been calculated that $158 billion in personal tax cuts will find their way back into your own personal pocket. See the recap here on the Budget 2019-20.

5. Single Touch Payroll (STP) support.

This requirement from July 1 means that all payroll functions will be digital and submitted to the ATO instantly. We’ve been helping a number of clients set up software for this. It isn’t that difficult or costly. See more about how you can get ready on our March STP Blog.

6. Reduced penalty rates.

This is a hornet’s nest and a double-edged sword. While making wage rates more reasonable for small business to operate increased hours or days, it doesn’t help wage-earners meet rising cost-of-living demands. This will likely be a hot topic for upcoming May elections. Here’s a fairly good ‘big picture’ opinion summary from ABC News.

Are you ready?

All up, we’ve got quite a year of financial changes ahead. We’re here for you to help you through any transitions from government or your own business growth. Get in touch: info@essentiallyaccounting.com.au or (02) 4421 0336.