Was there anything in the budget for small business?

As expected, there was not a lot in the Budget for small business – it was focussed predominantly on providing assistance for households, welfare recipients and low-income earners in managing the cost of living crisis.  You may have noticed there has been much discussion is around whether the measures announced will add to inflationary pressure and it seems that there is no agreement amongst the experts as to whether it will be stimulatory or not. This will be know in the coming months.

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As you may be aware, the Treasurer announced last week a proposed tax change to superannuation.

Who is impacted?

• The measure only affects individuals who have more than $3M in super at the end of a financial year and is not due to start until 1 July 2025, therefore it is the balance in super on 30 June 2026 that matters initially.
• The $3M is per person, not per fund and it includes all of an individual’s superannuation, including both their pension and accumulation accounts and super held in all funds (SMSF, APRA etc).
• The $3M won’t be indexed and therefore won’t increase with inflation each year.

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As always there are a lot of things to consider for the end of financial year and starting a new financial year so we have put together some tips below to help.

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We are aware the ATO has sent correspondence to businesses to remind them they will need to start reporting additional payroll information as part of their STP Phase 2.

STP2 started on 1 January 2022 however MYOB, Xero and other software providers were not able to update their systems in time so applied for a deferral with the ATO.

MYOB and Xero both have a deferral until 31 December 2022 which means businesses using these software’s have until this date to opt into STP2. If you are using another software for your STP reporting then we recommend checking when they will be STP2 ready.

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As we approach the end of the financial year it’s a good time to start thinking about what you could do to minimise your tax liability.

What’s new for 2022?

• The concessional cap for superannuation contributions has increased from $25,000 to $27,500 for the 2022 financial year. Don’t forget, to claim the deduction, your super fund will need to have received the contribution prior to 30 June and you will need to provide them with a notice of intent to claim a deduction.
• The ATO has released a Tax Ruling and Taxpayer Alert which outlines their interpretation with regards to key legislative provisions which govern trust distributions amongst family groups. Where this impacts your group, we will be in touch to discuss in more detail.
• The ATO has also released guidelines which outline where the ATO considers the allocation of profits from professional practices to be low, medium, or high risk. Again, if this impacts your business, we will be in touch to consider how we apply these guidelines to your practice.

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