The 2017-2018 Budget, while not as focused on small business as previous budgets, still had some interesting inclusions for Small Business Entities (SBEs) and the Construction industry. Here are some things you may need to be aware of:
Here are some things you may need to be aware of:
Reduction in the tax rate
The government has recommitted to its 10-year plan to reduce the company tax rate for companies with an aggregated turnover less than $50 million to 25%.
This will be staged over the next 10 years, with the most significant cuts being from the 2024-25 years onwards.
SBE Tax Write-offs extended
The SBE instant asset write-off has extended for another 12 months to 30 June 2018. This means Small Business Entities can continue to write off assets less than $20,000 in value for businesses with less than $10m turnover.
From the 1st July 2018, the threshold will revert back to $1,000.
Taxable Payments Reporting System (TPRS) Changes
The government has decided to extend the TPRS to include contractors in the courier and cleaning industries.
These payments wont be required until August 2019, but if you are required to produce these reports, you will need to be aware of these changes.
Purchasers to pay GST on Residential Premises
Purchasers of newly constructed residential properties (or new subdivisions) will be required to remit the GST directly to the ATO as part of settlement from the 1st July 2018. This will have implications for developers and their cashflows.
Affordable housing measures
The budget contained numerous measures which are designed to improve access to secure and affordable housing. Some of these measures include:
- Changing the CGT regime for foreigners;
- A 50% cap on pre-approved foreign ownership in new developments;
- Further CGT discounts for investors in affordable housing;
- Measures to encourage investment in affordable housing through Managed Investment Trusts (MITs); and
- Assistance to first home buyers to build a deposit inside their superannuation.
For more information or for how these will affect your specific circumstances, speak to your tax agent or refer to the many budget breakdown documents available online. Our favourite is from PwC – http://www.pwc.com.au/publications/federal-budget-2017.html