With the budget being recently released, here is a brief summary of what the March & Dirgova team believes are the key changes that may affect many of our clients.
Small business depreciation
The Government will extend the $20,000 small business instant asset write off by 12 months (to 30 June 2018). Eligible businesses with aggregated annual turnover less than $10 million can immediately deduct purchases of eligible assets costing less than $20,000, first used or installed ready for use by 30 June 2018.
Increase in Medicare levy
The Medicare levy will increase by half a percentage point from 2.0 to 2.5 % from July 2019. Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased.
Lower threshold for HELP debt repayments
A new minimum repayment threshold of $42,000 will be established with a 1% repayment rate and a maximum threshold of $119,882 with a 10% repayment rate from 1 July 2018.
Deductions for residential rental property disallowed.
From 1 July 2017, you can no longer claim deductions for travel expenses for inspecting maintaining or collecting rent for a residential rental property. Also, certain depreciation deductions will be limited to expenses actually paid for by the investor.
Taxable payments reporting
From 1 July 2018, the taxable payments reporting will be etended to cover courier and cleaning industries.
ATO cracks down on Cash economy
The ATO are now targeting the cash economy. The ATO will be performing more audits particularly on Cafés, restaurants and other businesses that accept cash.
Contribute the proceeds of downsizing to superannuation for older Australians
From 1 July 2018, a person aged 65 or over can make a non-concessional superannuation contribution of up to $300,000 from the proceeds of selling their home.
* This will apply to sales of a principal residence owned for the at least the past 10 years.*
First Home Super Scheme
First home buyers can withdraw any voluntary contributions to super made from 1 July 2017 for their first home deposit. Concessional contributions can also be withdrawn but will be taxed at marginal rates less a 30% offset. Contributions can be made from 1 July 2017 and withdrawals will be allowed from 1 July 2018 onwards.
The removal of the 457 visa has been in the news recently and businesses that employ foreign workers on certain skilled visas will need to pay a levy towards the Skilling Australians Fund. If your Businesses has turnover of less than $10 million per year, and has employees on a Temporary Skill Shortage visa, you will need to pay $1,200 per visa per year from 1 March 2018. A one off payment of $3,000 is also payable for each employee on a permanent Employer Nomination Scheme.
contact us for more information!
This is just a quick summary of some of the budget announcements and contact us if you require any further information or would like to arrange an End of Financial Year meeting, so we can help implement tax planning strategies.