Tax breaks that may be available for the 2019 tax return: Law not yet passed

Prior to the Election, the Coalition Government had proposed various tax measures. These have yet to be passed into law. It is uncertain which will be passed into law or when. If they are of interest discuss this with your adviser.

Still waiting for personal tax cuts…

Not yet law:

  • The tax offset that reduces the tax payable for low and middle- income earners. This becomes available when the 2019 tax return is filed with the ATO.
  • The marginal tax rate change for the 1 July 2019 – 30 June 2020 tax year. This will reduce the tax payable from 1 July 2019.

The new Coalition Government wants these and the proposed changes so that will result in a flatter tax rate structure by 2025, passed into law as quickly as possible. Labor has said it will support the 2019 and 2020 tax year changes but not those resulting in the flatter tax rate by 2025. We will wait and see.

To read what the Coalition Government has to say about their plan for tax rates, please view the link below –

https://www.budget.gov.au/2019-20/content/tax.htm

 

Small tax discount rate to increase from 1 July 2020

For unincorporated businesses, the current small tax discount rate of 8% would increase to 13% for 1 July 2020 to 30 June 2021 and become 16% after 1 July 2021.

 

For companies with a turnover under $50m, a cut in corporate tax rate from 1 July 2021

It is proposed for companies with a total turnover of less than $50m that from 1 July 2021, the current company tax rate of 27.5% would be decreased to 25%.

Available now cash payments for training and new apprenticeships in some trades

A cash incentive payment of $8,000 per placement is available to those businesses offering apprenticeships in the following trades: carpenters and joiners; bricklayers and stonemasons; plasterers; wall and floor tilers; plumbers; vehicle painters; hairdressers; air-conditioning and refrigeration mechanics; arborists.

The employers will be given $3,500 after 12 months and $4,500 at the end of the apprenticeship.

The new apprentices receive $1,000 after 12 months and $1,000 on completion.

Selling overseas: Export market development grants

If your business operates as a self-employed, partnership, company or trust and has undertaken export promotion activities during the year, it may qualify for the Export Development Grant.

Specific rules exist as to the countries and categories of promotional expenditure that the Grant applies to. A detailed application process exists.

In general, a business must:

• have total sales of less than $50m

• have incurred at least $15,000 of promotional expenditure on (indicative only):

  • overseas representatives
  • overseas marketing visits
  • buyer visits
  • providing free samples

• be selling or promoting overseas:

  • export of goods, know-how and most services
  • inbound tourism and conferences

• be developing export markets in countries other than:

  • North Korea
  • Iran
  • New Zealand

The cash benefit is a reimbursement of up to 50% of the promotional expenditure over a must-spend base of $15,000. The minimum grant is $5,000 and the maximum $150,000.

Tip! If either of these incentives are of interest or applies to you or your business, consult with your adviser. The paperwork required to set these up may require their assistance.

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