Last night the budget was announced by Treasurer Scott Morrison. Below are some highlights that might affect you or your business.
THE BUDGET FOR INDIVIDUALS
- The threshold for tax payers to pay 37% will rise from $87,000 to $90,000 for the 2019 financial year. This will prevent approximately 200,000 people from entering the 37 percent tax bracket.
|Rate||Current (2018)||Proposed (2019)|
|0%||0 – $18,2000||0 – $18,2000|
|19%||$18,201 – $37,000||$18,201 – $37,000|
|32.5%||$37,001 – $87,000||$37,001 – $90,000|
|37%||$87,001 – $180,000||$90,001 – $180,000|
- A new non-refundable tax offset will be introduced in the 2018-2019 financial year. The low and middle income tax offset will provide a benefit of up to $530 pa. This amount will be received as a lump sum on assessment after the individual lodges their tax return.
- The Medicare levy low income threshold for single, families, seniors and pensioners will be increased from the 2018 income year.
- The threshold for singles will be increased from $21,655 to $21,980
- The family threshold will be increased from $36,541 to $37,089
- The threshold for single seniors and pensioners will increase from $34,244 to $34,758
- The family threshold for seniors and pensioners will increase from $47,670 to $48,385
THE BUDGET FOR BUSINESS
- The Government will extend the $20,000 immediate write off for small business by a further 12 months to 30 June 2019.
- From 1 July 2019, business will no longer be able to claim a deduction for the following payments;
- Payments to their employees such as wages where they have not withheld any amount of PAYG from these payments despite the fact withholding requirements apply
- Payments made by businesses to contractors where the contractor does not provide and ABN and the business does not withhold any amount of PAYG.
- From 1 July 2019 a limit of $10,000 for cash payments made to business for good and services will be in place. Any transactions over the threshold will be required to be made through an electronic payment system or cheque.
- It was announced that the contractor payment reporting systems will be expanded to cover the following industries on top of the building and construction industry;
- security providers and investigation services
- road freight transport
- computer system design and related services
THE BUDGET FOR SMSF
- From 1 July 2019 SMSFs with a history of good record keeping and compliance will be changed to a three yearly audit cycle. This measure will reduce red tape by only requiring an audit of their SMSF every 3 years instead of annually.
- The maximum number of allowable members in new and existing SMSFs will increase from 4 to 6.
- From 1 July 2019 and exemption from the work test for voluntary contributions to superannuation, for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements. The work test exemption with give recent retirees addition flexibility to get their financial affairs in order in the transition to retirement.
The announcements made during the budget are subject to being made into law. For more information on these provisions and other changes that might affect you visit the Budget website here.