Changes to Higher Education Loan Program (HELP) and Trade Support Loan (TSL) repayment obligations
The Australian Government has recently introduced changes relating to Higher Education Loan Program (HELP) and Trade Support Loan (TSL) repayment obligations.
If you live and work overseas and earn worldwide income that exceeds the minimum HELP and TSL repayment thresholds, you are required to make repayments against your loan. The two main changes the Australian Government has introduced require you to do the following:
update your contact details and submit an overseas travel notification if you have an intention to reside, or already reside, overseas for 183 days or more in any 12-month period; and
lodge your worldwide income or a non-lodgment advice.
These changes apply to new and existing HELP and TSL debts.
ASIC increases fees from 1 July 2017
ASIC increases its fees each year based on the Consumer Price Index (CPI) for the previous March quarter. As such, from 1 July 2017…
Draft tax ruling on deductibility of employees’ travel expenses
Further to removing the deductibility of travel expenses in relation to rental properties in the 2017-18 Federal Budget, the Commissioner has issued Draft Tax Ruling TR 2017/D6 which addresses the deductibility of employee travel expenses.
Under the general tax principles, an employee’s travel expenses are deductible for income tax purposes if they are:
- incurred for the purpose(s) of gaining or producing assessable income, and
- not capital, private or domestic in nature.
A variety of travel claims have been examined in TR 2017/D6, outlining situations where employees are, or are not able to claim an income tax deduction for travel expenses.
Cars and tax
From 1 July 2017 the following car threshold amounts apply. Income tax This is the upper limit on the motor vehice cost you use to work…
Our top tax tips for businesses and individuals ahead of the FY17 year-end
Businesses
- Drop in company tax rate: The company tax rate is currently 27.5% for companies with aggregate turover of less than $10M. From 1 July 2017 the 27.5% rate will also apply to companies with aggregate turnover of between $10M and $25M. Therefore tax deductions may be available for such companies at the 30% rate to 30 June 2017 and 27.5% thereafter. Accordingly:
- to the extent you can ensure suppliers invoice you prior to 1 July 2017, the deduction will reduce tax at the rate of 30% in FY2017, thereby providing an additional 2.5% reduction in tax;
- review your trade debtors listing and write off all bad debts where appropriate before 30 June 2017;
- review inventory and assets schedules for obsolete items and items that can be scrapped; and
- fully franked dividends declared and paid before 1 July 2017 will carry franking credits at 30%. Thereafter they would be franked at 27.5%.
- $20K instant asset write-off: Businesses that are small business entities (generally those with aggregated turnover of less than $10m) can claim an immediate deduction for assets acquired prior to 1 July 2017 if the cost of the asset is less than $20,000.
- Prepay expenses: Small business entities can prepay up to 12 months’ worth of expenses and claim the full amount in the current year.
- Payment of superannuation contributions: To claim a tax deduction for employee superannuation contributions in the 2017 financial year, the business needs to ensure that the payments have cleared the business bank account by 30 June 2017.
Changes to foreign resident capital gains withholding payments system
On 9 May 2017 as part of the 2017-2018 Federal Budget, the Government announced two changes to the system whereby a purchaser is required to withhold an amount (currently 10%) of the purchase price from the seller and pay the amount withheld to the ATO as part of the settlement process when selling or buying real property or interests in real property in Australia.
The changes announced are to the threshold and the withholding payment rate, and will apply to any contracts of sale entered into on or after 1 July 2017. However, the current threshold and withholding payment tax rate will apply for any contracts which are entered into prior to 1 July 2017, regardless of whether they settle after that date.
NSW Overhauls Property Tax System
New South Wales has announced plans to slash state-based stamp duty for first time buyers and double state-based foreign investor surcharges.
Federal Budget 2017/18: Skilling Australians Fund levy introduced
The Skilling Australians Fund levy was introduced as part of the 2017/2018 budget. This measure has the potential to impact many Australian businesses that employ foreign workers, We encourage you to contact your Walker Wayland NSW advisor if you wish to discuss this or any other aspects of the Budget further.
Businesses that employ foreign workers on certain skilled visas will be required to pay a levy that will provide revenue for a new Skilling Australians Fund from March 2018.
Small business entity turnover increased to $10 million
The Government has announced that it will accept changes made by the Senate to the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016, which implements the Government’s plan to increase the Small Business Entity (“SBE”) turnover from $2m to $10m. These changes will apply from 1 July 2016.
The changes are regarded as a significant benefit to small businesses as they will allow a wider range of businesses to access the benefits afforded to SBE’s. As a result, businesses will be able to grow to a greater extent without the loss of the concessions available to a SBE. These changes will immediately benefit taxpayers as they will apply for the 2017 financial year.
It is expected the Bill will be passed by the House of Representatives in the next parliamentary session.
Federal Budget 2017-18: Property purchasers to pay GST to the ATO
Under a proposal contained within the recent 2017-18 Federal Budget, property purchasers rather than property developers must remit the GST directly to the Australian Taxation Office (ATO) as part of the settlement process. This plan to shift the responsibility of accounting for GST from property developers to purchasers will apply to newly-constructed residential properties and new subdivisions from 1 July 2018.