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26 April 2019

Budget 2019 - Businesses

Budget changes affecting business taxpayers

Small Business Instant Asset Write-off

The immediate write off provisions for small business (i.e. those businesses with an aggregated annual turnover of less than $10 million) have changed as a result of the recent budget. 

Small businesses will be able to immediately deduct purchases of eligible depreciating assets costing less than the specified amounts below. The write off amounts refer to any single item, ready & available for use & do not include GST.

The write off amounts are as follows:
  • Up to $20K per item up to 29 January 2019
  • Up to $25K from 29 January 2019 to 2 April 2019
  • Up to $30K from 7.30pm (Budget release) 2 April 2019 until 30 June 2020
Whilst these write-offs can be very helpful to small business as a way of upgrading essential equipment, cash flow must also be taken into account. Ultimately, the deduction is not a refund of the amount of the item, it just reduces any profit the business makes & therefore, reduces any tax payable on the profit.  

In effect, the deduction is worth the tax rate applicable at the time, although it may well allow upgrades to computers, equipment, etc a little earlier than predicted.

The threshold for instant asset write-off will revert to $1,000 on 1 July 2020. 

Assets which cannot be immediately deducted under the instant asset write-off rule can continue to be placed into the general small business pool and depreciated at 15% in the first year and then 30% each financial year thereafter. The pool can also be immediately deducted if the balance is less than the applicable instant asset write-off threshold at the end of the financial year (including existing pools). 

Medium sized businesses (i.e. those businesses with an aggregated annual turnover of less than $50 million) will also be able to access the instant asset write-off scheme, for purchases of any eligible assets costing less than $30,000 that are acquired and first used or installed ready for use from 7.30pm (Budget release) 2 April 2019 until 30 June 2020. 

Single Touch Payroll

The government announced there will be an expansion of the data collected through Single Touch Payroll (STP) by the ATO. The expansion will be aimed at reducing the compliance burden for employers and individuals reporting information to multiple Government Agencies.  

It will be further simplified & automated from 1 July 2020. STP reports your employees' wages, PAYG withholding and super information to the ATO each time you process payroll and pay your staff. This has been a requirement for employers with more than 19 employees for the past year but applies to all employers from 1 July 2019.
As the information is sent to the ATO electronically from your accounting or payroll softare it will be mandatory for all employers to have STP compliant software from 1 July 2019 to report wages, tax and super to the ATO each pay run. Paper and spreadsheet records will no longer be accepted by the tax office. Please note, Xero is STP compliant but only some versions of MYOB can be used for STP reporting.
For more details about Single Touch Payroll please refer to our article here or contact our office.  

Sham Contracting

Funding will be provided to address sham contracting behaviour by some employers.  

This measure is targeted at those who knowingly or recklessly misrepresent employment relationships as independent contracts to avoid employment and statutory obligations.
We advise that you review all of your contracting relationships with clients, subcontractors or contractors and employees to make sure you are meeting your compliance obligations. To see what is required for employees, refer to our checklist for employers.  


Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.   

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