On 29 January 2019, the Prime Minister announced that legislation will be introduced to:
The current threshold of $20,000 has applied since 7.30pm AEST on 12 May 2015 and was due to revert to $1,000 on 1 July 2019.
Under the proposed changes, from 29 January 2019 until 30 June 2020, small businesses with an aggregated annual turnover of less than $10 million may claim an immediate deduction for the business-use portion of each depreciating asset costing less than $25,000.
To illustrate, assume an individual acquires a van for $22,000 (excluding GST entitlements) on 1 February 2019.
The individual is a small business entity and estimates the van will be used 90% for the business and 10% for private purposes.
Under the current rules, while the business-use portion of the cost of the van is less than $20,000 (i.e., $22,000 x 90% = $19,800), an immediate deduction is not available because the entire cost is $20,000 or more.
However, the van may be depreciated as part of the taxpayer’s SBE small business pool.
In contrast, an immediate deduction of $19,800 may now be claimed under the proposed changes, as the entire cost of the van is below the new threshold of $25,000.
This measure is expected to benefit more than 3 million eligible small businesses.
On 13 February 2019, the Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 was introduced in the House of Representatives.
Once this Bill becomes law, it will open up opportunities for small businesses to claim an immediate deduction for depreciating assets (where they cost less than $25,000) up until 30 June 2020.
The ATO has again warned taxpayers to be alert for scammers impersonating the ATO, as it appears they have changed tactics in 2019.
Specifically, the ATO is seeing the emergence of a new tactic where:
“scammers are using an ATO number to send fraudulent SMS messages to taxpayers asking them to click on a link and hand over their personal details in order to obtain a refund”.
The ATO has received reports of scammers maliciously manipulating the calling line identification so the phone number that appears is different to the number from which the call originated.
This is referred to as “spoofing” and is a common technique used by scammers to appear legitimate.
It appears these scams aim to steal taxpayers’ personal details and identities.
The ATO has advised it will not:
If you are unsure about a call, text message or email purportedly received from the ATO, the best advice is not to reply.
Should you have any concerns, please contact our office directly, or alternatively you can call the ATO on 1800 008 540 to check if the contact was legitimate or to report a scam.
The rules for claiming deductions for payments to workers are changing.
From 1 July 2019, businesses can only claim deductions for certain payments made to workers where they’ve met the Pay As You Go (‘PAYG’) withholding obligation for that payment.
Specifically, a business can only claim a deduction for the following payments if it complies with the relevant PAYG withholding rules:
Where the PAYG withholding rules require an amount to be withheld, the business must:
Importantly, a deduction will not be lost if an incorrect amount is withheld (or reported) by mistake.
The ATO has recently reminded small businesses of the expanded tax concessions potentially available to them, as outlined below:
Finally, the ATO has reminded taxpayers that more businesses are now eligible for most small business tax concessions.
Specifically, from 1 July 2016, a range of small business tax concessions became available to all businesses with an aggregated turnover of less than $10 million (i.e., the turnover threshold).
Previously the turnover threshold was less than $2 million. The $10 million turnover threshold applies to most concessions, except for:
Note: The relevant turnover threshold for accessing the lower company tax rate is $50 million from the 2019 income year (increased from $25 million in the 2018 income year).
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.Tags: asset write-off, PAYG, small business, tax scam
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