A small business guide to the new financial year
The new financial year is upon us! Now that we’re in the 2017-18 financial year, there are a number of new pieces of legislation that could impact how you do business.
Here are the key changes SME’s need to know about for the new financial year:
National Minimum Wage Increase
In early June, the Fair Work Commission decided on a change to the national minimum wage, increasing it by 3.3%. It also noted that past discussions on increases to the national minimum wage might have been too conservative.
This brings the hourly minimum wage up to $18.29 an hour with the minimum weekly take-home for full time employees increasing by $22.20 up to $694.90 per week. You can check out all the details here.
Penalty Rate Changes
Businesses in the fast food, retail, hospitality and pharmacy sectors will now be able to roll out the first part of changes to Sunday penalty rates.
These changes will come into effect over the course of three to four years, however the initial cuts will start with a 5% drop from the previous Sunday rates.
Even though the rates are changing, SME’s have been reminded that it does not mean that they can automatically and immediately pay workers less than the transition rates (decided by the Fair Work Commission).
As of July 1, there have also been changes to public holiday penalty rates. The rates vary from sector to sector but on average the wage has gone down 25% from the previous penalty rate.
A full list of the rate changes can be found here.
ATO Tax Arrears
For the first time, business ATO arrears may be reported to credit agencies (Dun & Bradstreet, Equifax, Experian etc.).
In the last Mid-Year Economic and Fiscal Outlook (MYEFO), Treasurer Scott Morrison announced that as of July 1, 2017, The Australian Tax Office could disclose the tax debt information of businesses to credit reporting bureaus. This measure will initially only apply to businesses with Australian Business Numbers and tax debts of more than $10,000 that are at least 90 days overdue.
This could potentially hurt a business’ credit score and in turn could make life pretty difficult for SME’s. However its not all bad, to their credit the ATO have stated that it will not disclose tax information of businesses that engage in some sort of repayment plan.
Read more about what effects of this new ATO legislation will be here.
Starting this financial year and continuing annually, the cost of applying for visa will increase in line with the Consumer Price Index.
Applications for visas for skilled workers, temporary workers and business talent will all increase. You can find all the new details, including fees and what new applicants need to know here.
In April there was also changes to the 457 class worker visas after the government announced that the previous scheme would be abolished in favour of two new visas. You can find more information from the Department of Immigration and Border Protection if your business is considering employing workers on one of the new visas.
High-Income Threshold & Maximum Payout for Unfair Dismissal
This financial year, the Fair Work Commission’s high-income threshold has increased from $138,000 to $142,000, meaning that employees earning more than $142,000 a year cannot claim unfair dismissal against an employer. This is inclusive of both an employees’ wages and any agreed value of non-monetary benefits, however is not inclusive of any commissions, overtime or bonuses earned.
The Fair Work Commission has also increased the maximum amount it can order in compensation for an unfair dismissal from $69,540 to $71,000.
There have been a couple of changes to superannuation for this financial year and businesses and self employed individuals in particular should keep an eye on their retirement planning. Some of the changes include how many individuals are entitled to make a tax claim on super contributions.
Capital Gains Tax
Back in the May Budget, the government announced that SMEs would be facing stricter rules on CGT this financial year. In an attempt to lessen the amount of business operators who are incorrectly accessing tax breaks, the government has amended the concession rules for small businesses. Business owners can only access tax concessions for assets that are used exclusively within the business
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Article content courtesy of Moula Money.