2019 is shaping up to be a pivotal year for businesses. With the decreasing Australian dollar, a slowdown in overall growth and questions over property prices there is no doubt that business leaders need to be on top of all the changes. This includes the upcoming NSW and Federal elections. MCG Legal have identified three areas where businesses on the Gold Coast need to be aware of and ready to respond to.
Getting businesses ready for Single Touch Payroll
As the Australian Taxation Office moves to a digital platform for all business interactions, ‘real time’ reporting within payroll is one of its initiatives. The Single Touch Payroll system proposes to streamline business reporting of employee payroll, tax and superannuation for employers. This essentially allows your business to report to the ATO at the same time you pay your employees.
If your business employs more than 20 people as at 1 April 2018, including full time, part time and casual employees, then the Single Touch Payroll system will apply to you. So what does this mean for your business? Moving to a digital platform can be daunting for many businesses, however, this new system allows for simplified business reporting, removes the requirement to produce payment summaries to individuals and reduces the amount of onboarding activities for employees, such as tax file number declarations. Also, there will be no penalties imposed for the first 12 months for late submissions, so your business has plenty of time to get used to the new platform.
The Banking Royal Commission and access to funds
One major takeaway from the Royal Commission into Misconduct in Banking, Superannuation and Financial Services Industry is that access to funding is going to continue to tighten with regulatory change. There were warnings going into the commission hearings that a review of small business lending would make it increasingly difficult to access finance from the big banks. While the final report does not recommend tighter regulation, it does not seem to improve access to finance for small business operators either. In fact, lenders have already been tightening their belts through the regulatory direction of APRA. With changes coming to mortgage broking and other services in 2020 it is worth thinking about how your business will access funds moving forward and plan accordingly. Having a plan for a tighter business funding market is simply prudent if your business relies on access to lending capital.
The Federal Election
The exact date of the Australian federal election has yet to be announced, however, it is likely the nation will vote in May of this year. Why does this matter to your business? Because both parties have policies that will impact business in one way or the other (and no doubt there will be plenty of vote buying as we get closer to the election!).
For instance, the Labor Party is proposing to abolish franking credit refunds, a type of tax credit that allows companies to pass on tax paid at the company level to shareholders. Basically, they can be used to reduce income tax payments or be received as a tax refund. So, if the Labor Party win the next election and the policy passes both Houses of Parliament, the proposed commencement date is 1 July 2019 and will mean that retirees will no longer get the benefit of the franking credit refund. Other examples of changes that they have flagged include reforming the tax treatment of investment property by abolishing capital gains tax concessions on certain investments.
No matter the winning side it is likely changes will happen by the second half of the year so for future planning, it’s imperative that you stay up to date.
So, 2019 is certainly shaping up to be an interesting year for business, both small and big. If you run a business that is considering acquisitions or sales this year we invite you to contact us at MCG Legal for a FREE 30 Minute consultation or call us on (07) 5591 2222.