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January Tax Updates

Updated: May 6, 2019

Instant asset write-off threshold upped to $25K

The government is looking at increasing the small business instant asset write-off from $20,000 to $25,000. To be eligible the business needs to be classified as a ‘small business’, which is an annual turnover of less than $10 million. The new threshold will apply until 30 June 2020.

The government will be seeking to legislate the change when Parliament resumes on 12th of February.

The $25,000 instant asset write-off will improve cash flow for businesses by bringing forward tax deductions and encouraging more businesses to reinvest in their business and replace or upgrade their assets.

Tax consequences highlighted with super withdrawals

A number of SMSF trustees are experiencing a surprise in extra taxes due to not understanding what the meaning of a full condition of release means. It is becoming more common where a number of SMSF trustees have decided to pull money out of their super fund and pay it back without realising the ATO might consider that to be assessable income.

Members might need a lump sum for example and they think they can just take it out like a pension payment and think there will be no consequences, which is not always the case. Members should always seek advice before withdrawing funds from a SMSF.

ATO set to contact clients for overdue TPAR

The ATO has announced that tax practitioners who have clients in the building and construction industry, will start receiving a list of their clients and the years overdue for their Taxable Payment Annual Reports obligations.

To ovoid overdue penalties these need to be lodged immediately.

Courier and Cleaning industries now also have to lodge TPAR which took effect from 1st July 2018, more information can be found at our blog here

Thousands of clients set to be contacted on incoming STP deadline

The ATO has announced it will begin writing to small businesses who have 19 or less employers and already use a payroll software.

The ATO will inform them about Single Touch Payroll (STP) and that they do no need to wait for legislation to pass before they start reporting through STP.

Late last year, the bill proposing to extend STP to employers with 19 or less employees from 1 July 2019 was passed by the Senate, but has yet to be legislated. Small business can still expect STP to start as expected on 1 July 2019.

Rate for home office expenses bumped up

The hourly rate for calculating for home office expenses has been increased to 52c per hour, up from 45c per hour which will come into effect from 1 July 2018. The rate-per-hour method covers all home office running expenses such as heating, lighting, cooling, cleaning costs and decline in value of fixed assets such as desks etc.

If you wish to use this method to claim a deduction for home office running expenses you only need to keep a record to show how many hours you work from home. (a four-week period can be used to calculate this amount if your hours are regular and constant).

Melbourne Tax Advisory

1300 942 230


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