Australian Small Business Tax Changes

The 4 Tax Changes You Need to Know If You Run an Australian Small Business

It’s the beginning of the new Australian financial year and a raft of tax changes have arrived as of the first of the month – if you run an Australian small business, it’s up to you to be across these changes.

On 1 July 2019, a flood of taxes came into play that small businesses need to be aware of, Chartered Accountants Australia and New Zealand (CA ANZ) Senior Tax Advocate, Susan Franks said today. “Tax law never stands still, and a number of changes that are in place from 1 July 2019 will likely impact how small businesses operate.”

“Being aware of these regulatory changes and how they can affect you and your business, may assist in the smooth operation of your business and help you maximise your return.”

WP Rocket - WordPress Caching Plugin

The top tax changes you need to be across if you run an Australian small business are:

Single touch payroll

From 1 July 2019 all employers regardless of size are required to report their employee’s tax and superannuation information using single touch payroll (STP). That said, the Australian Taxation Office (ATO) has recognised that small employers may need some additional time to transition to STP and is providing a variety of concessions, including a deferral to 30 September 2019 for those small businesses that request a deferral.

Restrictions on deductions for certain payments of cash wages

To help ensure that businesses compete on a level playing field, those businesses that pay cash wages but don’t report these payments or don’t remit the tax associated with these cash wages, will no longer be able to claim a tax deduction for the cash wages paid after 1 July 2019.

Instant asset write off

The $30K instant asset write-off from the Federal Budget allows businesses to claim immediate deductions for asset purchases up to the value of $30K but only up to 30 June 2020. Consider what depreciating assets your business needs and ensure that they are acquired and installed ready for use before this concession expires.

Reduced company tax rate for active small businesses

That company tax rate for active small businesses will decrease from 27.5% to 26% in the 2020/21 year and to 25% in the 2021/22 year. Along with the decreased tax rates there will be decreased franking rates. It is time to consider the impact of these changes on your small business’s ability to access existing franking credits through future dividend payments.

Ms Franks also says that “Regulations are increasingly changing, so make sure you discuss these with your chartered accountant and ensure you are compliant with all changes required.”

Chartered Accountants Australia and New Zealand is a professional body comprised of over 117,000 diverse, talented and financially astute members who utilise their skills every day to make a difference for businesses the world over.


COVID-19 Creates More Stress for Australian Small Business Community

New research from MYOB reveals two thirds (66%) of small businesses feel COVID-19 has impacted their mental wellbeing,…

Read more

The 7th Asia Pacific Eldercare Innovation Awards saw Melbourne based start-up hayylo take out the award for Best Smart…

Read more
Australian agricultural software

If you haven't been for a drive in the country for a while, you may not have noticed, yet the digital revolution is…

Read more

The Australian Software Guide features a hand curated list of the best Australian built software products.