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May 16, 2018 / News

Business Consulting / Taxation

Top Tax Tips - 16 May 2018

What effect will the recent Federal Budget have on you and your business?

The Federal Budget was delivered on 8 May 2018 and contained some proposed changes that, if enacted, will affect the following entities in the following ways for the 2019 income tax year (i.e. from 1 July 2018):

  • Individuals:  new $530 low and middle income tax offset and increase in the top threshold of the 32.5% marginal tax bracket from $87,000 to $90,000;
  • Businesses: extend until 30 June 2019 the $20,000 instant asset write-off and some research and development (R&D) incentive changes; and
  • Superannuation:  a measure to prevent individuals who earn more than $263,157 per year from working more than one job from breaching the $25,000 concessional contributions limit and more strenuous enforcement on members of superannuation funds to lodge a notice of intent to claim a tax deduction for concessional (deductible) contributions.

The Government is also on the war-path against Phoenix activities. Directors of companies who leave companies incapacitated to pay their tax and other debts will be personally liable for avoided income tax, GST and luxury car tax.  Unfortunately, the Budget papers do not announce a commencement date for this measure, but hopefully the measure will swiftly be enacted to shut down this economically harmful activity.

Furthermore, from 1 July 2019, businesses operating in the cash economy that make payments of more than $10,000 for services or goods must do so by direct debit, BPAY or cheque.

Please see our Budget Summary here for a more detailed (but still concise) overview of the Budget.

Our Budget summary is easy to read and sets out in a practical manner:

  • What the proposals are;
  • How the proposals may affect you; and
  • From what day the proposals are supposed to apply.

Due date for lodgement of the FBT return is 21 May 2018

The due date for lodgement of the 2018 FBT return (i.e. for the FBT year starting 1 April 2017 and ending 31 March 2018) is 21 May 2018 – however, if Nexia lodges your tax return electronically, the due date for lodgement will be 25 June 2018.

For the 2018 FBT year, employers must pay FBT at a rate of 47% on the grossed-up taxable value of the fringe benefits on 28 May 2018 (regardless of when lodgement is).

This effectively means that an employer’s FBT return must be prepared by 28 May 18 and payment made by that date as well.

Nexia Edwards Marshall recently released a client alert (see here) providing a brief overview of how FBT operates (e.g. which records to keep and what are some examples of fringe benefits) as well as detailing some strategies to reduce an employer’s FBT liability.

Please contact your Nexia Edwards Marshall Adviser if you would like to discuss how any of these FBT issues may affect your organisation so that we can help you identify potential FBT risks and opportunities for you.

How can Nexia Edwards Marshall help you?

For any questions or to discuss any of the above in relation to your personal situation, please contact Grantley Stevens or your Nexia Edwards Marshall Adviser.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall Adviser.