Budget 2018 proposals summarised for bookkeepers
The 2018 Federal Budget delivered on strategies appearing to
be geared toward continuing support of Australian Small Business and increasing
activities on stamping out the black economy and catching those doing the wrong
It is important to note that these proposed budgetary
provisions are yet to pass through the legislative process to receive Royal
Individual tax rate
Essentially phased in over a 3-step implementation, tax
brackets for individual taxpayers will shift:
1 July 2018 – the 32.5% marginal bracket top end
will increase from $87k to $90k
1 July 2022 – the 19% upper limit will increase
to $41k and the 32.5% bracket top end will increase further to $120k
1 July 2024 – the 32.5% bracket will again
increase to $200k
A one-off tax offset will apply to low and middle income tax
earners, meaning up to an additional $530 in the back pockets of these
individuals at tax time. This is paid in
addition to the existing Low Income Tax Offset (LITO).
TPB 3-year renewal
fee increase for BAS agents
The TPB are receiving an overall funding increase funded by
a hike in fees paid by practitioners to register with the board. The 3-year renewal fee will increase from
$100 to $135 and the renewal option for BAS agents who are ‘not in business’ to
renew for $50 will be removed, meaning all registrations will now cost $135.
ATO to receive
additional funding to support transition to the STP regime
The ATO has been allocated an additional $15M in funding to
roll out education programs and support to small and micro-employers for the
transition to the new STP reporting regime.
activities related to non-compliance and the black economy
Programs will be ramped up and extended, particularly in
relation to reducing activities around:
The Black Economy and initiatives continuing to
be led by The Black Economy Taskforce
Incorrect claims related to Work Related
Expenses and private usage of assets
TPAR’s reach extended
The Taxable Payments Annual Reporting (TPAR) regime will
extend to the cleaning and courier industries from 1 July 2018 and further, to
the security and road transport industries from 1 July 2019.
GST to apply to
international web-based accommodation booking services
From 1 July 2019 web-based booking services for
accommodation supplied in Australia will be required to collect and remit GST,
impacting services such as Hotels.com, tripadviser, Airbnb etc.
Business payments in
excess of $10k restrictions
All payments made for business purposes in excess of $10k
will be required to be made electronically or via cheque as of 1st
No withholdings, no
For businesses who are required to report and pay PAYGW to
the ATO from employees or no ABN withholdings from their contractors where a
valid ABN has not been supplied, deductions for these whole payments will be
disallowed under the proposed new arrangements.
More detail is required from a technical perspective around these
preclusions as the policy develops in parliamentary discussions.
No deductions for
expenses incurred from holding vacant land
Proposed legislation changes will disallow deductions for
holding vacant land, where the land is not genuinely held to earn assessable
income. This is hoped to de-incentivise
the holding of land for tax planning purposes and free up the land for housing
and other commercial developments.
Disallowed deductions will not be able to be carried forward for use in
later income years where assessable income may begin to apply to the vacant
land. Disallowed deductions for vacant
land will not apply to cost base for CGT purposes if it is not ordinarily a
cost base element.