Below are highlights from the 2018 Federal Budget. Though the reforms are still to pass into Law, there are some points that may have an effect on your tax position in the coming years:

  • Small Business concession of the immediate write off of Eligible Assets costing less than $20,000 has been extended until 30 June 2019.
  • Businesses will NOT be able to claim a taxation for payments to:
    • Employees who have not supplied their tax file number and a Tax File Number Declaration has not been completed and lodged with the ATO;
    • Contractors who have not supplied their ABN on their invoice;
      • Under both of these circumstances, the business MUST WITHHOLD tax from the payment. Failure to do this, will result in not being able to claim the payment as a tax deduction
  • Deductions denied for Vacant Land:
    • The Government proposes that from 1st July 2019, costs like interest on a mortgage, rates and taxes, on a land that you are planning or are building a residential/commercial building on, can not be claimed as a tax deduction UNTIIL the construction has been completed and is available for rent.
    • The costs will form part of the cost base of the property and will be accounted for when the property is sold and form part of any Capital Gain/Loss.
  • Low and Middle Income earners will receive Tax Offsets, under the proposals. The Government also plans to increase the 32.5% tax bracket from $87,000 to $90,000. With further changes in future years.
  • Expansion of the Contractor Payment Reporting system, to include cleaning and courier activities from 1st July 2018.