Important Federal Budget changes have been made for 2019/20. We've summarised the key changes below, however, please don't hesitate to contact us with any questions or concerns you may have.
Personal Income tax
From 1 July 2022, the Government will increase the upper threshold of the 19% personal income tax bracket to $45,000.
$18,200 - $45,000 at 19%
The Government will increase the upper threshold of the 32.5% personal income tax bracket to $120,000.
$45,001 to $120,000 at 32.5%
From 2025 income year, the marginal tax rate will be reduced to 30% from 32.5%.
Low and middle income earners (Low & Middle Income Tax Offset)
The low and middle income tax offset is a non-refundable tax offset.
LMITO applies from 2019 Income year to provide tax relief of up to $530, with a base amount of $200.
The Government has announced that it will increase the LMITO to provide tax relief of up to $1,080 per annum, as well as increase the base amount to $255 per annum.
Business Taxpayers Instant Write Off Assets
Medium Sized Businesses with a turnover from $10 million to less than $50 million can also claim instant asset write off from 7.30pm on 2 April 2019 until 30 June 2020.
The instant asset write off has increased to $30,000 from $20,000 and has been extended to 30 June 2020.
Businesses with a turnover of up to $10 million can also claim a deduction for each asset purchased and first used or installed ready for use, up to the following thresholds:
$30,000, from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020
$25,000, from 29 January 2019 until before 7.30pm (AEDT) on 2 April 2019
$20,000, before 29 January 2019
Division 7A –Private Companies
The Government has announced that it will defer the start date of the proposed Division 7A changes by one income year, from 1 July 2019 to 1 July 2020
Single Touch Payroll (STP)
The government has announced that it will support the expansion of data collected through Single Touch Payroll.
STP data will be expended to include more information about gross pay amounts and other details.
STP will reduce the compliance burden on employers and individuals reporting information to multiple Government agencies.
Australian Business Number System
The Government will strengthen the ABN system to disrupt the black economy behaviour by requiring ABN holder do the following:
Lodge their ITR if they have an ITR obligation form 1 July 2021
Confirm the accuracy of their details on the ABN Register annually from 1 July 2022.
Superannuation related changes
The Government has announced that it will allow voluntary superannuation contribution (both concessional and non-concessional) to be made by those aged 65 and 66 years without meeting the work test from 1 July 2020.
The Government has announced that it will allow those aged 65 and 66 to make up three years of non-concessional contributions under the ‘’bring forward rule”
Individuals up to and including the age of 74 will be able to receive spouse contribution with those 65 and 66 no longer needing to meet a work test.
Other Changes
The Government has announced that they will provide a further relief to primary producers and tourism operators by allowing them to apply for a refund of any luxury car tax paid up to a maximum of $10,000 for vehicles acquired on or after 1 July 2019.
The Government will provide an income tax exemption for qualifying grants made to primary producers, small businesses and nonprofit organisations affected by the Northern Queensland Floods.
The Government will provide substantial funding to establish a dedicated sham contracting unit (within the Fair Work Ombudsman) to address sham contracting behaviour engaged in by some employers.
The Government will provide $42.1 million over the next four year to the ATO to increase activities to recover unpaid tax and superannuation liabilities. These activities will focus on larger businesses and high wealth individuals to ensure on time payment of their tax and superannuation liabilities.
The Government will provide $57.5 million over five years from 2018/19 to the Department of Jobs and Small Business, the Administrative Appeal Tribunal and the ATO to provide access to fast, low cost and independent review mechanism for small businesses in dispute with the ATO.
Please do not rely on this information as advice, you should contact us to assess your individual circumstances and how this applies to you.
MIRANDA ACCOUNTING SERVICES 8/263 – 271 Wells Road, Chelsea Heights Vic 3196 PO Box 476, Patterson Lakes VIC 3197 Tel 03 9773 3647 www.mirandas.com.au