There’s a buzz in the air right now – it’s a busy time….on top of the usual May due dates that are quickly approaching, I’ve been travelling a bit lately, am Sydney boundwith the IQ team this weekend and head overseas next week. And then – to top it off – there was the BUDGET on Tuesday night!! (I’m imagining cheers of excitement here.) This is historically a May event and one of my favorite nights of the year but with the whole daylight savings thing – it was at 6:30pm so both of my children were simply ecstatic to watch this with me (at ages 7 and 8 ecstatic is likely more my interpretation of how they felt rather than their actual feelings.) This all led to a bit of a post budget hangover yesterday hence my belated blog post today. Here are my main takeaways from Tuesday’s events:
- Instant Asset Write off increase to $30,000 – I’ve already had a few questions about this one and rightly so as for the 2019 financial year, there will be three instant write off limits over three different time frames. $20k, $25k and $30k depending on the date that the asset was purchased and installed, ready for use. Historically, only small business entities ($10m or less turnover) could access this however the scope has been widened to include businesses with turnover up to $50m. This has now been legislated.
- There has been proposed changes to personal income tax rates. This means that these will only take effect if the current government is re-elected. These proposed changes are summarized in the chart below. From the 2025 income year, the 32.5% marginal tax rate will be reduced to 30% in addition to the bracket being changed changed from $45,001 – $200,000.
|Rate||Current (2019-2022)||Proposed (2023-2024)|
|0%||0 – $18,200||0 – $18,200|
|19%||$18,201 – $37,000||$18,201 – $45,000|
|32.50%||$37,001 – $90,000||$45,001 – $120,000|
|37%||$90,001 – $180,000||$120,001 – $180,000|
- The will be an immediate change (effects current financial year) to the low and middle income tax offset which means that when the 2019 tax return is lodged for individual taxpayers with a taxable income of less than $125,000 – a refund will be received. This has been announced as a tax relief measure and will be up to $1,080 per tax payer for the years 2019 up to and including 2022.
- Single Touch Payroll information that is being collected by the ATO (stay tuned for more information about this – it’s my current topic of choice) will be shared with more government agencies from July 1st.
- The ABN system is being changed to require ABN holders to lodge tax returns – currently you can hold an ABN without lodging a tax return and from 2022, there will be a requirement to confirm the accuracy of the ABN register details. I am hopeful that this will also include a simplified streamlined approach to the various registers and systems that currently exist for updating details.
- There were several superannuation announcements with my pick being the work test to removed for those ages 65 and 66 years from 1st July 2020.
- The Government will also provide substantial funding to establish a dedicated sham contracting unit (within the Fair Work Ombudsman) to address sham contracting behavior engaged by some employers.
- The Government will provide $1 billion over four years to the ATO to extend the operation of the Tax Avoidance Taskforce. There will be a further $42.1 million over four years to the ATO to increase activities to recover unpaid tax and superannuation liabilities.
There was so much more, I was interested to hear about the teachers who go rural for a set period of time may have their HELP debts wiped but what has me more on the edge of my seat is the potential changes to capital gains tax concessions (currently 50%) and negative gearing benefits from the opposition. There are reports that the impact of these will be introduced as early as January 2020 and they will have a significant impact. Until we know more, I’ll just be over here like: