Like with every Budget announcement, understanding how certain changes and aspects affect small to medium businesses is crucial. From Single Touch Payroll right through to instant asset write-offs, having a clear knowledge of changes will help you with your business financials. So, what does the 2019 Australian budget mean for your business? We have some thoughts on how it may affect you and your operations.
Tax Cuts
One of the most frequently asked questions we get is “When will I see tax cuts this year?”. The simple answer is “Not straight away”. Proposed changes will affect tax returns lodged this July for low-income and low-middle income tax offsets. Some of the biggest and most immediate tax cuts will apply to earners under $126,000. The rest of the remaining tax cuts won’t actually kick in until 2024, so it’s important not to bank on all of these changes just yet. There are two elections and three budgets between now and then, so there can be extra changes that you need to be aware of. One of the biggest pieces of advice we have around tax cuts is to wait for the legislation to change. Diverse Business Consultants will tell you if, and when, they happen and how they affect you and your business.
Instant asset write off
When it comes to instant asset write-off’s, it’s easy to think and treat it like “free money”. However, this isn’t the case. Spending large amounts on assets can still affect your profit significantly, so it’s always best to understand how your asset spending will affect your business operations. You do also need to bear in mind that some larger purchases can still hurt your chances when you seek finance from your bank, so it’s always best to get personalised advice around your new purchases.
Luxury car tax
There have been some changes to the luxury car tax, which has increased the maximum refund. Previously the maximum refund was $3,000, but it has now increased to $10,000. This is applicable to farmers and tourism operators who buy new vehicles on or after July 1st. This change can also include the purchase of some expensive utes, which are used for farm use. We are sure there are many farmers and tourism business operators who will find this change within the budget of great use.
Financing for small to medium businesses
With an $80 billion estimation of a shortage of credit to small and medium businesses, there is a securitisation fund of $2 billion in debt that new banks can re-lend to growing businesses. If you’re looking at more financing for your business, it’s always recommended to get professional advice from your bookkeeper or financial advisor and discuss any alternative borrowing options to the big four banks. This is particularly good news for people who are in the growth stage of their business or are looking to expand their business operations this year.
Single Touch Payroll
Now will be a good time to have a chat with us about Single Touch Payroll and what it means for your business. Eventually, the data from STP will be shared with the Department of Human Services and Immigration. Therefore, it may be a good time to have a look at any staff who may be working in breach of their visa requirements or any employers that may have spousal payments outstanding. With $53 million set out for the expansion of STP, this money will be helping businesses to enforce STP within their organisation, especially for those who have 20 or more staff.
Grants
Unfortunately, many new businesses are unaware of government funding that is available to them during their start-up phase. There are a number of Export Market Development Grants available to help support businesses with their digital marketing plans if they decide to operate overseas. There is useful information on the grants that are available at the business.gov.au website.
There is a lot to consider with the 2019 budget and how it affects you and your business personally. If you are concerned about any of the changes within the budget or have any questions on how it affects you, get in touch with Diverse Business Consultants today to discuss your needs.
