Federal Election 2019 Outcome – What it means for youPromised personal TAX CUTS across a broad band of income mean you could benefit over a 10-year period. In the first instance, the Coalition’s plan is to simplify the taxation system.
- From 1 July 2019, if you earn up to $45,000, the 19 per cent tax rate bracket would apply (previously applicable up to $37,000), saving you up to $255 a year.
- From 1 July 2022, if you earn up to $120,000, the 32.5 per cent tax bracket would apply (previously applicable up to $90,000), saving you up to $1080 a year.
- From 1 July 2024, it is planned that if you earn up to $200,000, you would remain in the 32.5 per cent tax bracket. The 37 per cent tax bracket is intended to be fully removed.
- Overall, $158 billion was announced in the 2019 Budget to support tax relief over 10 years.
The Coalition announced as part of its 2019 Budget the expanded and improved INSTANT ASSET WRITE-OFF. Businesses with up to $50 million in turnover may write off business assets this financial year (previously applicable up to $10 million in turnover). Furthermore, the write-off threshold has increased to $30,000 (from $25,000).
Legislated in October 2018, the fast-tracked CORPORATE TAX payable by small and medium businesses with up to $50 million in turnover was reduced from 30 per cent to 27.5 per cent for income year 2019-20. The Coalition plans to reduce the tax rate to 26 per cent for income year 2020-21 and finally to 25 per cent by income year 2021-22 onwards, fast-tracked by five years.
If you’re in retirement, wondering about recent reports of losing your FRANKING CREDIT CASH REFUND ability, be assured the Coalition plans for you to continue to make your claims. In addition, if you make VOLUNTARY SUPERANNUATION CONTRIBUTIONS at aged 65 or 66, you will no longer need to meet the work test requiring you to work 40 hours in a 30-day period per annum.
From 1 January 2020, eligible first home buyers with a minimum five per cent deposit may be able to apply for a deposit loan through the Coalition’s proposed FIRST HOME LOAN DEPOSIT SCHEME, enabling 10,000 first home buyers to benefit by purchasing a home sooner than they might have.
Vocational education and training (VET) are cornerstones of a skilled workforce and the Coalition’s plan to spend $525 million – ‘Delivering Skills for Today and Tomorrow’ – on VET will benefit businesses by creating up to 80,000 NEW APPRENTICESHIPS with Skill Shortages payments of $4000 for eligible employers and $2000 for apprentices.
The Coalition will continue to deliver on its financial support commitment over 10 years for all primary and secondary, public and private schools under Gonski 2.0.
Are you in the business of exporting? If you are, the Coalition plans to increase Australia’s number of exporting businesses from 52,000 to 62,000 over the next three years through its proposed ‘Exporters’ Package’ providing additional funds, $60 million, to its EXPORT MARKET DEVELOPMENT GRANTS SCHEME.
In an effort to more robustly support employers, including in regional areas, the Coalition will bring in changes to visas for skilled migrant workers, commencing with a greater number of EMPLOYER SPONSORED SKILLED VISAS being granted to 39,000 (from 35,528) in 2019-20.
A new GLOBAL TALENT – INDEPENDENT PROGRAM commencing on 1 July 2019 will provide 5000 places within the 2019-20 migration program. The best-of-the-best skilled migrant workers will be eligible to apply.
If you’re an employer of WORKING HOLIDAY MAKERS, then from 1 July 2019, overseas visitors on a working holiday visa may have the option of a third year visa, providing they perform six months of specified work in regional areas. To attract people with more work experience, the Coalition has already lifted the eligible applicant age cap from 30 years to 35 years (Canada and Ireland only at this time).
Overall, a reduction in PERMANENT MIGRATION will see a new cap of approximately 160,000 migrants (down from 190,000) composed of 110,000 skilled migrant workers and 47,000 family members.
How can YML help?
Talk to our Accountants today to see how YML Chartered Accountants can assist you with your next financial steps. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
NOW is the time to consider your Year-End Super ContributionsA superannuation fund with a healthy and prospering balance is an important lifetime investment. Super contributions are governed carefully in Australia and caps exist, indexed annually, which must not be exceeded if you want to avoid paying additional tax penalties on the excess you contribute beyond the cap limit.
The annual cap for total concessional contributions has fallen to $25,000, regardless of your age, however a work test is applicable once you reach 65 years of age. A concessional contribution is a contribution such as your employer contributions, including salary, salary sacrifices, bonuses, or an extra personal contribution you make yourself to ‘top up’ your super investment and on which you may claim an income tax deduction.
These concessional contributions are ‘before tax’ contributions and are subject to a tax liability of 15%, known as ‘concessional tax’.
If you make a personal contribution in to your SMSF on which you do not claim an income tax deduction, this is called a non-concessional contribution and is an ‘after tax’ contribution.
Consider using cash proceeds from share sales, property sales or an inheritance you have to move these investments in to your SMSF. The increasing value of cash proceeds may mean a transfer in to your super fund helps you to control the amount of tax you will pay. The annual cap for non-concessional contributions in the 2018/2019 financial year is $100,000. However, be aware that if you are nearing 65 years of age, you have an option to contribute up to $300,000 with the ‘bring-forward’ rule.
If you make a non-concessional contribution in to your SMSF and you are a lower to middle income earner, the government automatically makes a contribution – up to $500 – in to your SMSF upon receipt of your annual tax return.
You may be eligible to claim a tax off-set of $540 if you contribute to your de-facto/spouse’s super fund and your de-facto/spouse earns up to $37,000 per annum. There is a phasing out of this tax off-set amount after $37,000 per annum income, stopping at $40,000 per annum income.
Splitting Contributions (De-facto/Spouse)
The government is looking at limiting the tax-free balance of super funds, so it would behove you to consider splitting superannuation contributions with your de-facto/spouse.
Splitting contributions makes sense in the following scenarios:
- Your de-facto/spouse’s super fund has a much higher balance than yours
- Your de-facto/spouse is significantly older than you and their super fund can enter pension phase sooner than yours
- Your de-facto/spouse is significantly younger than you and you can improve your eligibility for concession/pension by lifting investment in their super fund
Take the time today to check your year-end retirement investments. Ensure that you are taking full advantage of your super contribution opportunities.
How can YML help?
Talk to our YML Super Solutions Team today to see how YML Group can assist you with your retirement wealth strategy. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
Federal Budget 2019 – Immigration to Australia NEWSAustralia’s immigration programme is set to mostly benefit from the Australian government’s recent Federal Budget 2019. Treasurer Josh Frydenberg outlined several important new pronouncements for the betterment of Australia and Australian employers.
Annual Migration Cap – Reduction
First, with the aim “to better manage population growth”, the government will reduce the annual immigration cap by 30,000 to a total of 160,000 per annum for four years from 2019-2020. With a view to ensuring infrastructure keeps up with Australia’s growing population, the government has determined to lower the cap for now.
New Skilled Visas – Regional
To encourage settlement across Australia, two new regional visas will replace the existing subclass 187 and subclass 489 visas. To be called Skilled Work Regional (Provisional) visa and Skilled Employer Sponsored Regional (Provisional) visa, these new visas will require visa holders to live and work in Australia’s regional areas for five years. Commencing in November 2019, after three years visa holders will be eligible to apply for permanent residency in regional areas from November 2022.
Skilled Migration Points Test – Adjustment
Both single applicants and partnered applicants will be awarded additional points when they or their partner, respectively, demonstrate/s competent English skills. This adjustment is to be used when a primary applicant’s partner does not meet the current number of points for skilled partner status.
‘Social Cohesian’ – Community Integration
Over $64 million has been allotted to helping migrants “become established and integrated in their [Australian] communities” – funding for local community and youth hubs, sport and language programmes and support and learning to both “foster belonging” and “celebrate diversity”.
Visa Fees – Increase
From 1 July 2019 visa application fees will incur a 5.4% increase for nearly all subclass visas.
To find out more about how Federal Budget 2019 changes may affect your visa application, consult YML Migration’s experienced migration agents soon to take advantageous of lower visa application fees prior to 1 July 2019.
How can YML help?
Talk to our YML Migration Team today to see how YML Group can assist you with sponsorship and visa applications. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
Tax Planning and Restructuring to suit your BusinessTax planning is a legitimate discipline used in business to minimise, within legal limits, taxes paid by businesses. This is not a tax avoidance undertaking to deliberately exploit the tax system, so it is important to consider carefully which areas to explore. In 2019, consider the following areas:
As your business builds, it may be that it makes sense to restructure the business to suit your business’s needs. Four main business structures are: company (a legal entity separate from its shareholders), partnership (a group of people or entities but not a company), trust (a holding entity for income or property), sole trader (a single person legally responsible, with or without employees).
Restructuring means changes to your existing liabilities and taxes, so seeking professional financial advice is essential to understanding which structure can help your business optimise its future tax planning whilst ensuring the new structure makes sense operationally.
Earlier this year, the Australian Government determined to not only increase but also to extend the instant asset write-off until 30 June 2020. This is a consequential opportunity for small businesses wanting to decrease tax payments. To be eligible:
Have an annual turnover of up to $10 million and the business asset must have cost up to $25,000, be in use and have been purchased during this financial year up to 30 June 2019.
The $25,000 threshold is a 25% increase on last financial year’s threshold.
The ATO permits your business to deduct in this financial year certain prepaid expenses incurred for work or services to be performed in the next financial year. There are prepayment rules that apply and it is important to follow these rules including ‘eligible service period’, ‘excluded expenditure’ such as amounts less than $1000 and salary and wages, ’12-month rule’ and ‘pre-RBT obligation’.
Recording debtors and creditors in an accrual accounting system – that is recording income and expenses when work or services are completed, whether or not payment has yet been received or paid – will enable your business to determine actual income and expenses for the financial year to 30 June 2019.
Superannuation payments made to your employees by financial year end constitute a tax deduction for your business. It is essential that payments made to super funds are made timely and no later than 30 June 2019 to be eligible.
Have your trust distributions been calculated to meet ATO legislation? Do you need your trust minutes prepared and signed prior to 30 June 2019?
Arrange a tax planning meeting with us and we will discuss ways you might hone tax planning and evaluate restructuring your business to your advantage this year and every year hereafter.
How can YML help?
Talk to our Accountants today to see how YML Chartered Accountants can assist you with tax planning and restructuring your business. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
Single Touch Payroll – NOW Mandatory for ALL BusinessesSTP, Single Touch Payroll, is an initiative introduced by the ATO to streamline company reporting of salaries, wages, PAYG withholding taxes and superannuation contributions. STP was initially applicable only to businesses with 20 or more employees. As of this year, from 1 July 2019, all employers will be required by the ATO to have adopted STP regardless of the number of employees, so small businesses with 19 or fewer employees now also need to report via STP-enabled software.
With mandatory reporting via STP, small, medium and large employers need to ensure they are complying with the ATO’s new requirement. To do so, a business needs to consider its digital connectivity capacity and, where applicable, upgrade with STP-enabled software.
There are many options available – from purchasing in-house software packages to using a third party and subscribing to a STP software provider who works out and lodges the necessary reportable data to the ATO on your behalf.
Your business’s pay cycle does not need to change. As you pay your employees, whether it be weekly, fortnightly or monthly, you will simultaneously file with the ATO that payroll cycle’s data including employee payments, taxes withheld and super amounts. This will result in a smoother transition, allowing you to timely report to the ATO.
You will still need to prepare and submit a quarterly BAS, but payment summaries and end of financial year payment summaries will be automatically produced by the STP system.
YML Group helps many clients with STP and we can help your business set up its STP system. There are many low cost solutions such as Xero, MYOB, Reckon and others that YML Group can assist you with for ongoing compliance of the ATO’s STP regulations.
Lodging payroll with the ATO has never been easier. Let us help you set up STP today.
How can YML help?
Talk to our YML Innovation Team today to see how YML Group can assist you with ensuring your company is STP-compliant. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
FBT 2019 – What’s new?The FBT year in Australia is from 1 April and ending 31 March the following year, so now is the time to ensure that you are up-to-date with the latest FBT developments in the areas of focus for the ATO.
For the FBT year ended 31 March 2019, the FBT rate remains at 49% in line with last year’s FBT rate.
FBT applies to benefits, given to employees in lieu of or in addition to salary or wages, received and this tax is paid directly to the ATO by employers. Benefits received may include such items as vehicles, car parking, housing, private loans and even, these days, Bitcoin.
The ATO has identified two concerns - employers’ failure to identify and report FBT on items and employers’ incorrect application of exemption provisions when reporting taxable value on items – in areas of concern for the ATO. Let’s delve further…
Where an employer is required to lodge a FBT return, what do you need to know about:
Some employers claim a FBT rebate despite being ineligible to do so. You need to check that you are a rebatable employer and if you are not, then you should ensure you are eligible to receive a FBT rebate before making a claim.
To ensure that an employer reports employee contributions as income on their income tax return and does not overstate the employee contribution amount in order to reduce an FBT liability, the ATO focuses on finding accurate declarations on both the FBT return and the employer’s income tax return.
It is necessary for an employer to verify that a FBT exemption applies to the provision of a motor vehicle to an employee for private use. In addition to supplying this verification to the ATO, the ATO is looking for an employer to keep sufficient records to support an exemption.
An employer will need to look carefully at the complex rules of FBT car parking (slight increase in car parking threshold 2019) and will need to be aware of the Practical Compliance Guideline 2018/3, applicable to car and residual benefits claimed in 2019 and later FBT years. If an employer provides an employee with an eligible vehicle to perform work duties, then this guideline may be applicable.
Living Away From Home Allowance (LAFHA)?
An employer pays a LAFHA to an employee to compensate an employee for additional expenses incurred and for the fact of being away from home whilst employment duties require an employee to live away from their usual residence.
It is important to only claim FBT for eligible employees and to obtain declarations from those eligible employees. Claiming for invalid circumstances or keeping insufficient records of the accommodation and meal components is also closely looked at by the ATO.
The ATO’s LAFHA reasonable total food and drink expenditure for one adult in Australia increases in 2019 by just under 7.5% from 2018. It would behove an employer to check the ATO’s LAFHA guidelines for 2019.
It pays to understand how FBT applies in these areas. To minimise your FBT liability, at YML Group we can prepare and lodge your FBT return and/or calculate any employee contribution.
Our fee for the preparation and lodgment of an FBT return is from $530 + GST and for the calculation of an employee contribution is $260 + GST per item.
How can YML help?
Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with FBT. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
Welcome your parents to join you in Australia with the NEW five year Sponsored Parent (Temporary) VisaOn 1 March 2019, David Coleman, Minister for Immigration, Citizenship and Multicultural Affairs, announced a new visa that demonstrates the Government's commitment to supporting migrant communities. From 17 April 2019, sponsorship applications will be open and upon sponsorship approval, your parent/s may apply for a Sponsored Parent (Temporary) subclass 870 visa from 1 July 2019 (intended commencement date).
The new visa’s provision is for parents to spend up to 10 years continuously in Australia. Initially, a parent may stay on a five-year visa and thereafter apply – after a short period (minimum 90 days) spent out of Australia – for another five-year visa. How do you apply to sponsor your parent/s, so they can apply for one of these new visas?
Sponsorship is a responsibility and Australian sponsors are required to act as financial guarantors for any public health costs incurred whilst their visa-holder parent/s remain in Australia. These might include hospital and aged care fees. This decision was made to ensure that Australian taxpayers are not required to cover additional healthcare costs.
Including but not limited to, a sponsor must:
- Meet the sponsor/parent relationship criteria (a parent must be biological or adoptive or step-parent still de facto/married to the biological/adoptive parent)
- Be 18 years or older
- Be an Australian citizen/permanent resident or eligible New Zealand citizen residing in Australia for at least four years
- Have no Commonwealth or public health debts
- Meet the minimum household income threshold
- Provide police clearances
- Provide financial support and accommodation for their parent/s in Australia, as well as keep records thereof
The Sponsored Parent (Temporary) visa does not allow for permanent residency in Australia and generally a ‘no work’ condition applies to this visa.
Under any one sponsorship, up to two parents at a time may be sponsored per household. This allows for more households to sponsor their parent/s and is based upon recognising the potential cost per household to support a parent or parents.
A cap of up to 15,000 visas per annum (from 1 July until 30 June) will be granted. The government has considered the ageing population and budget impacts of older migrants. Furthermore, a priority of young skilled migrant workers remains in place, hence limiting the number of Sponsored Parent (Temporary) visas.
Including but not limited to, a visa applicant must:
- Be sponsored by an approved parent sponsor – be a biological, adoptive or step-parent (approved)
- Be at least 18 years or older
- Be outside of Australia
- Provide evidence of access to funds
- Provide evidence of health insurance
- Satisfy health, character and national security criteria
In addition to visa fees, sponsors must bear healthcare, living and accommodation costs of their visa-holder parent/s in Australia.
Importantly, migrant families have a new opportunity to reunite in Australia after being separated by distance for, in some cases, many years. As Mr Coleman has stated, “This new visa will deliver great social benefits to families across Australia”.
How can YML help?
Talk to our YML Migration Team today to see how YML Group can assist you with your sponsorship and visa applications. Contact us on (02) 8383 4400 or by visiting the Contact Us page on our website.
Stepping Stone to 482 Visa – The Subclass 407 Training VisaOn-the-job training is a valuable opportunity for visiting workers to Australia. Australia gives workers from overseas this possibility of on-the-job training by opening up Australian workplaces for the pursuit of enhanced professional skills.
What is the appropriate Australian visa?
The Training and Research Visa (Subclass 407) enables overseas academic and professional workers to improve their chosen career with professional competence gained from working in their field or relevant industry within an Australian company on a temporary basis.
This visa allows a visa holder to live and work in Australia for up to two (2) years as an occupational trainee or as a participant in a professional development training programme.
There are three (3) application streams:
Occupational Training to Develop Skills: Applicants who are recently tertiary-qualified or who are in a skilled occupation and intending to undertake workplace-based training to develop their skills and proficiencies
Occupational Training for Career Capacity Building: Applicants who require professional development training to build their overseas management-level career and/or students who require an internship or traineeship to complete their course
Occupational Training for Registration/Licensing: Applicants who are required by their overseas occupation to seek and complete on-the-job training for registration and/or licencing purposes
What else does an Applicant need to know?
If your sole intention is to work in Australia, then this visa is not suitable for you. Please solicit advice from YML Migration on your individual visa requirements.
You must be at least 18 years of age and have worked or studied for a minimum of 12 months out of the last 24 months in an eligible skilled occupation.
You must be nominated by an Australian employer or invited by an Australian government agency.
You may only work for your Australian sponsor and you must work a minimum of 30 hours a week.
Your training programme must be in place prior to your application for approval.
Please discuss all application requirements with YML Migration.
What do I do if my company wants to sponsor an overseas trainee?
As an employer, your organisation must be operating lawfully in Australia. Your organisation must be the entity directly providing the workplace-based training. And your organisation is required to be approved as a business sponsor, compliant with all sponsorship obligations.
If the Training and Research Visa (Subclass 407) seems right for you, talk to YML Migration about your opportunity to enrich your career through on-the-job training.
Let YML Migration manage the process, including any bridging visa you might need whilst in Australia awaiting your 407 visa application outcome.
How can YML help?
Talk to our YML Migration Team today to see how YML Group can assist you with your visa options. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
Employees : Time and Attendance PlatformsManaging a workforce as an owner and/or manager of any sized business has usually entailed an abundance of administrative tasks, an endless stream of minutiae to achieve the end result of timely and accurate payroll to your workforce. Well, not anymore.
In today’s era of Software-as-a-Service (SaaS), software options exist for managers of workforces, large and small, to manage their staff’s time and attendance on the job.
Companies specialising in time and attendance platforms are able to deliver on the promise of automation of manual administration, such as rostering, scheduling, deployment of employees; shift planning; tracking of time spent on a job and attendance in the workplace. All these automated administrative tasks may result in increased cost savings through this ability to reliably measure and manage human labour costs.
Live data and the capability for all employees to have access to a time and attendance platform means a manager can optimise staff on a day-to-day, weekly or monthly basis, making strategic, cost-saving decisions at the touch of a button.
A manager can adjust staffing levels and activity times readily. There is less time spent on contacting individual workers, less time lost chasing absentees and more time for managing the workforce on-the-job.
Employees generally want to work productively and with an automated time and attendance platform, they can be the right employee put in to the right shift and/or on to the right task corresponding to their natural aptitude. This may help to reduce costs as previously, less control was able to be exercised over staffing strategy due to the lack of real-time information.
Human Resources (HR) and Payroll can be linked to a platform, enabling the export of relevant data for those functions to operate smoothly, compliantly and with correct payment of wages and overtime. Meeting a company’s obligations to the ATO becomes far easier with automation of employees’ time and attendance.
Furthermore, growing a business by expansion, opening in another location, is a walk-in-the-park when the administration of doing so doesn’t take double or triple the time.
Managers can instead focus their time and energy on managing the business and their employees, paying more attention to relationships within an organisation for optimal yields.
So stop imagining a brighter future for your business and its employees and start investing in their future – a time and attendance platform, such as Deputy (www.deputy.com) and Tanda (www.tanda.co), is what you need now.
How can YML help?
Talk to our YML Innovation Team today to see how YML Group can assist you with your SaaS platforms. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.
Small Business Instant Asset Write-Off : NOW up to $25,000As a small business every opportunity to minimise tax is a significant one, so an increase of the instant asset write-off threshold is welcomed and may be taken up by small businesses to decrease tax payments.
Until recently, the instant asset write-off threshold was $20,000 and was due to revert to $1,000 as of 1 July 2019.
However, Prime Minister Scott Morrison made a speech on 29 January 2019 declaring that the Australian Government would extend the instant asset write-off for another 12 months until 30 June 2020 and he also stated that the threshold would increase (to $25,000) for tax returns lodged from financial year end 2019.
This legislation was introduced in to Parliament on 12 February 2019. It is not yet law.
Is your business eligible to claim this tax benefit?
Small businesses – with an annual turnover of up to $10 million – who have purchased and installed or put in to use an asset that cost up to $25,000 between 29 January 2019 and 30 June 2019 may claim an instant write-off of the business portion of that asset’s purchase cost.
The business portion write-off must be claimed in the business’s tax return for the relevant income year, so claiming an asset purchased for up to $25,000 may be done both this financial year end 2019 and next financial year end 2020.
What happens if the asset cost more than $25,000?
If an asset is purchased at a cost greater than $25,000, it may still be deducted but not immediately; rather, its depreciation cost may be deducted over time, over more than one tax return.
YML Group can help you determine eligibility and assist you with making your tax-deductible claims.
How can YML help?
Talk to our YML Chartered Accountants Team today to see how YML Group can assist you with your tax deductions. Contact us on (02) 8383 4400, or by visiting the Contact Us page on our website.