End Of The Financial Year…. Let’s See What’s In Store For The Next One….
With the end of one tax year and another one ready to start, make sure you are aware of some of the changes that may affect you or your business from 1 July 2019…
1. Adoption of STP Method for Small Businesses:
The biggest change that will affect small businesses is the extension of Single Touch Payroll (STP) method for employers with 19 or fewer employees. Businesses of this size are expected to commence this new digital system from their first pay run in the new financial year. There will be a three-month ‘transition period’ for the businesses to provide additional time for the employees to get familiarised with the new system.
However, the ATO will be providing further supporting measures to the SMEs, these include;
- A 12-month waiver from penalties for incorrect lodgement.
- A one-year exemption for closely held payees, i.e. immediate family members.
- Approved STP software that is of low or no cost for the businesses with one to four employees.
2. New Minimum Wage Rate:
Another major change taking effect from 1 July 2019 is the annual increase to the national minimum wage and award rates. The Fair Work Commission announced on 30 May 2019 that there will be a three percent increase in the national minimum wage rate, i.e. 56 cents per hour to an hourly rate of $19.49.
3. Removal of Tax Deduction Eligibility on Certain Payments:
The employees or contractors’ payments that are paid in cash and are not declared to the ATO are not eligible for a tax deduction. Payments covered under this rule includes wages and salaries, bonuses, commissions, director fees, labour hire payments, and those made to either religious practitioners or a supply of services. This applies to the tax that is not withheld or the ATO has not been notified about?.
4. Tax Cuts Not Yet Locked In:
Australians have been advised not to rush in lodging their tax return early this year. This is mainly due to impending income tax cuts. The Institute of Public Accountants warned earlier this month that the new Federal Government’s income tax offset of $530 for singles and $1080 for couples on low to middle incomes is yet to be authorised and hence the ATO cannot process them until the legislation has been passed.
5. Extended Instant Asset Write-Off:
Parliament approved an increase of the instant asset-write off to $30,000 on 4 April 2019, and for the first time, the eligibility was extended to include medium-sized businesses with the turnover of up to $50 million.
We will keep you posted for any further updates. In the meantime, let us know about your thoughts on the above.