Changes in Taxation

There is nothing more certain in life than the ever changing world we live in. Change is often uncomfortable but is always inevitable. This is no different than what we all face in the business and tax world.

Over the past few years there has been a number of initiatives by state and federal governments that have impacted on the way we do business and while some are potentially frustrating there are some that have opportunity.

Taxation Matters
A number of changes in this area that touch business owners in a number of ways and they mostly have nice little acronyms:
STP – Single Touch Payroll. There are approximately 880,000 businesses in Australia affected by STP reporting with around 630,000 having 1-4 employees. STP is a software enabled reporting system so the ATO get live information around the earnings, tax withholding and superannuation of employees of these businesses.
SBE – Small Business Entity. There are a number of income and sometimes asset thresholds inside this ATO concept depending on whether it relates to simplified depreciation rules, access to the small business tax offset or access to the small business CGT concessions.
Base Rate Entity – Companies with business income of less than $10,000,000 have a company tax rate reduced from 30% to 27.5%.
Primary Producer Accelerated Depreciation – Primary producers are able to claim a deduction for the full cost of fodder storage assets, fencing and water facilities. 

Superannuation Matters
Superannuation is one of the things that seems to be tinkered with each year by the government. Some of these are:

1. Limits to concessional taxed superannuation balances
2. Changes to superannuation contribution limits for tax deductible (concessional) and personal (non-concessional) purposes.
3. Housing downsizer contributions – Irrespective of whether you are actually downsizing or not.
4. Changes to tax treatments of some income stream accounts.
5. More restrictions and compliance around superannuation fund borrowing arrangements.

Succession Planning Opportunities
What is being forecasted as some of the largest intergenerational wealth transfer seen in history between the Baby Boomers and the next generation staying current with not only income tax changes but also Western Australian law changes is pretty important to you and your trusted advisor.

In July 2019 The State Government passed legislation to allow the transfer of primary production land assets with lower restrictions that were previously in place. There is great opportunity for those dealing with the complicated issues of succession in primary production businesses.

The above summary only touches of some of the changes we all face in our day to day business journey. Your advisers with a well-equipped tool box of knowledge and understanding can help you get from where you are to where you want to be.

At Pascoes Accounting & Advisory  (PAA – another acronym!) it is our mission to partner with you to walk your journey and plan to achieve your goals in business and in life.