If you have missed this year’s budget announcement, fortunately, we can help you to understand what effect it has on tradies.
The Government intends to fully fund a ten-year Enterprise Tax Plan which will reduce the tax rate for all companies to 25% over ten years for small businesses.
Instant Tax Write-Off
Some of the biggest news is the extension of the tax claim program on small business purchases of up to $20,000. So, the $20,000 instant asset tax write-off is staying for another year. Also, the raising of the small business turnover ceiling from $2 million to $10 million. This means that if your business is turning over less than $10 million per year, you can claim for 100% of the cost of equipment that used for your business.
What can be claimed?
As usual, claims can only be made on items that are relevant and necessary to your business. Things such as work-related clothing (high vis, steel cap boots, socks etc.), machinery, tools, electronics, vehicles and anything else that must be worth under $20,000. If there is an item you are using for both business and personal use, such as a phone or ute, you can only claim the proportion that is used for business. Detailed records must be kept to ensure you’re claiming correctly at tax time.
An additional $250 million has been invested to the ‘Skilling Australians Fund’ to support the growth of apprenticeships and traineeships. You can view the financial incentive and benefits for employers PDF by clicking here.
The government will take new measures to combat illegal ‘phoenixing’. Which is where companies declared insolvent restart under a new name. This new measure due to be implemented by the government will be at a cost to the budget of $40mil across three years.
Cash transactions over $10,000 have now been outlawed from 1st July 2019. Payments over this amount must be processed electronically through the banking systems.
The extension of the $20,000 instant tax write-off is a positive thing, especially for small business owners. Overall, there hasn’t been any dramatic changes, but there are new initiatives and crackdowns.