In Show 098 – Monthly Legal Updater June 2018 – Budget Special originally broadcast on Facebook Live on Friday 8 June 2018.
Today on the monthly legal updater we’re doing something a little different. We’ve invited two guests to join us for a discussion about superannuation and taxes. Brett Griffiths and Kim Reynolds are chartered accountants at the firm Vincents in Brisbane. Combined they both have decades of experience in their respective fields. The firm recently produced a report on the recent Federal Budget. We wanted to hear their perspectives on how the budget will affect small business.
Brett feels strongly that this is an election budget. The government is trying not to rock the boat too much and to appeal to as many voters as possible. The centerpiece of the budget is a personal tax cut. Many of them will come into effect on July 1, 2018. One of the cuts comes in the form of a low to middle income offset that can be used on next year’s tax returns. The government is starting to flatten out tax rates. One of the marginal tax brackets will change from $87 thousand to $90 thousand. In the three years that increases to $120 thousand. The top marginal rate will be $200 thousand.
Even though the budget has largely focused on individuals there were a few changes that will affect business owners. There is an extension of the $20 thousand right off for acquisitions. That was supposed to finish this year but it will be extended another 12 months. That tax deduction has not been taken up by many business owners but is well worth considering. That only impacts small businesses and it can be tricky to determine what firms fit that definition.
There was also a change to Division 7A which relates to private company loans and forgiveness of debts. Entwined in that is interpretation of how it applies to trusts. The government is going to introduce some changes about how that will work. Those details have not yet been released.
The budget also included some measures dealing with the “black economy.” One of them limits the amount of cash receipts that can be taken by companies to $10 thousand. A company can not receive payments that exceed that amount in cash. How practically this will be monitored is still very much an open question.
There have been a few changes to superannuation but not many. The industry is still trying to deal with all the changes that came into effect in 2016. They allowed self-managed super funds to have six instead of just four members. That’s going to mean they will need a corporate trustee instead of an individual trustee.
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We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.