Do you want to hit the ground running in the new financial year? We have all the details you need to know about the key legal changes your business will face from 1 July 2019. Follow the linked headings provided for more information on any of these topics.
Single Touch Payroll – applies to all businesses from 1 July
Single Touch Payroll was introduced in 2018 and is the ATO’s new reporting process for employee tax and superannuation information. Single Touch Payroll will be extended to include employers with less than 20 employees from 1 July. The changeover will be gradual, and when you need to report through Single Touch Payroll will differ depending on how many employees you have.
Employees will be able to access their annual payment summaries/group certificates (which are now called ‘income statements’) through the myGov website. Employees will need to set up access to myGov to retrieve their income statements.
Minimum wage increase by 3%
A wage increase of 3% will apply to employees whose pay rates are derived from the national minimum wage or a modern award. The minimum wage will be increased around $21.60 a week, which will take the weekly minimum wage from $719.20 to $740.80.
Threshold increases for ‘large’ companies
A proprietary company (i.e. a company that uses a ‘Pty’ after its company name) will now be considered a ‘large’ company by ASIC if it meets two of the following: $50 million in consolidated revenue;$25 million in consolidated gross assets; or100 employees (including part-time employees).
The new thresholds essentially double the existing limits. The increase in thresholds is expected to result in around 2,200 proprietary companies no longer being classified as ‘large’. This means that those now small companies are no longer required to comply with financial reporting and audit obligations that come with a ‘large’ company classification.
QLD State – Land Tax & Payroll Tax Changes
Land Tax:
From 30 June 2019, land tax rates for companies and trusts with combined landholdings of $5 million or more will increase from: 2% to 2.25% for each dollar above $5 million; and2.5% to 2.75% for each dollar above $10 million.
This increase follows the introduction of the new higher rate of land tax last year of 2.5% for landholdings over $10 million.
Payroll Tax:
The payroll tax exemption threshold has been raised from $1.1 million to $1.3 million effective in the assessment year of 2019-2020.There is set to be an increase to the payroll tax rate for large businesses (payroll above $6.5 million) – their rate will now be 4.95%. Medium business (payroll up to $6.5 million) will remain at 4.75%.Discounts for regional businesses include a reduction of 1% for medium and large regional businesses which brings the payroll tax rate down to 3.75% and 3.95% respectively. Regional Queensland businesses eligible from this discount must fall into the following regional catchments: Darling Downs–Maranoa, Central Queensland, Queensland–Outback, Cairns, Mackay–Isaac–Whitsunday, Townsville and Wide Bay.
Significant changes to your super
If you are not already aware, some substantial changes to your super commence from 1 July 2019. Here are some of the changes: Superannuation funds will not be unable to charge fees of more than 3% p.a. for account balances below $6,000;If your account balance is less than $6,000 or hasn’t been accessed for 16 months, then:your superannuation account may be deemed ‘inactive’ and transferred to the ATO. The ATO will attempt to locate the account owner if a superannuation account is transferred under the new laws; andyour insurance coverage (i.e. death, total and permanent disability) provided through your superannuation fund will need to be ‘opted-in’ by you, or you will lose the insurance cover.
Most superannuation funds have sent members letters and emails regarding their inactive superannuation accounts and the effect of the changes occurring from 1 July 2019. Those who are concerned about these issues should contact their superannuation fund to ensure they have, or at least maintain their level of insurance coverage and reactive their account if required.
Instant Asset Write-Off Threshold increase and extension to 30 June 2020
Great news for businesses, the instant asset write-off has been increased to $30,000 and now includes businesses with an annual turnover between $10 million and $50 million. If you purchase an asset (new or second hand) that costs less than $30,000 and it is used or is installed ready for use from 7:30 pm AEDT on 2 April 2019, you can claim a deduction for the business portion of that asset.
If you purchased an asset before 2 April 2019 then you may have missed out on this increased asset write off threshold. However, you might still be eligible for a lower threshold amount ($20,000, or $25,000 depending on the date of purchase) that was in place before 2 April 2019.
Retirement Village Changes
The Queensland Government has passed a Bill which clarifies that the mandatory ‘buy-back’ provisions in aged care also extend to freehold retirement village units.
The amendments require village operators to purchase freehold units from residents if the unit has not sold within 18 months of the termination of the former resident’s right to occupy. This amendment follows changes introduced to the Retirement Villages Act in 2017, which mandate the compulsory ‘buy back’ of units in leasehold villages.
This is fantastic news for retirement village residents and will provide them and their families with certainty regarding the sale of their unit in the future.
Enhancements to whistleblowing protections
The new whistleblower protection laws kick off from 1 July with some welcomed enhancements to existing protections under the Corporations Act 2001 (Cth). If you are a public company or a ‘large’ proprietary company, then you will need a company whistleblower policy in place by no later than 1 January 2020.
Other enhancements to protections include: a broader scope of certain classes of people who will be protected under these laws – now extending to family members of eligible whistleblowers; andadditional whistleblowing events that fall under the protection of the legislation – allegations of misconduct or an improper state of affairs or circumstances about any matter covered by financial sector laws.
Combustible cladding deadline extensions
The Queensland State Government has extended the deadlines for compliance with Stages 2 and 3a of the Safer Buildings Program. This program requires certain building owners to take steps to identify potentially combustible cladding on existing private buildings in Queensland.
- Stage 2 (building professional statement) has been extended until 31 July 2019.
- Stage 3a (fire engineer review) has been extended until 31 October 2019.
If your building is caught by this process, then Stage 2 requires you to engage a building professional to complete the required statement regarding the compliance of your building. Stage 3a requires you to engage a fire engineer and notify the Queensland Building and Construction Commission (QBCC) that you have done so.
Increase to the age pension
Did you know that the qualifying age for the age pension increases by six months every two years? From 1 July, the new qualifying age is 66. So, if you are born between 1 January 1954 and 30 June 1955, you can now claim the age pension once you turn 66.
Got a question?
If you have a question about any of these changes or need to discuss how we can help you and your business hit the ground running come 1 July 2019, then please give us a call.