Last night’s Federal Budget announcement had some winners and losers. But a budget deficit of $19.4 billion was always going to mean that there would be little or no good news for small business owners, despite Treasurer Wayne Swan’s emphasis on job creation.

In truth, small business will be left wanting from the lack of any significant measures designed to make doing business easier, reduce costs, improve education, skills and training, or support business and consumer confidence.

Almost everything had been regurgitated as part of the government’s plans to “support business to innovate,” as most measures had already been announced, including the $500 million investment in Industry Innovation Precincts and the $1 billion “Plan for Australian Jobs”

These measures were put forward as “part of our plan to support and create jobs, building on our loss carry-back and instant asset write-off reforms for 3 million small businesses” not yet legislated from last year’s ... Continue reading]]> Last night’s Federal Budget announcement had some winners and losers. But a budget deficit of $19.4 billion was always going to mean that there would be little or no good news for small business owners, despite Treasurer Wayne Swan’s emphasis on job creation.

In truth, small business will be left wanting from the lack of any significant measures designed to make doing business easier, reduce costs, improve education, skills and training, or support business and consumer confidence.

Almost everything had been regurgitated as part of the government’s plans to “support business to innovate,” as most measures had already been announced, including the $500 million investment in Industry Innovation Precincts and the $1 billion “Plan for Australian Jobs”

These measures were put forward as “part of our plan to support and create jobs, building on our loss carry-back and instant asset write-off reforms for 3 million small businesses” not yet legislated from last year’s budget.

Here’s a list of  measures that I believe will affect small business owners negatively:

• Self-education expenses are capped at $2,000 per year. You’ll struggle to find a conference, training initiative or educational course these days where the cost comes in below this figure. Instead of promoting our small business owners and their staff to become smarter and plan for growth, we are doing the opposite.

• Fair Work Australia receives $21.4 million for crackdown on workplace bullying. While I agree with stamping out bullying, much of this will be targeted at small to medium businesses that often struggle when dealing with the reality of a small staff. It can be difficult to manage personalities, and owners may not have the ability, time or finances to fight allegations.

• The ATO will also receive additional funds in order to investigate tax compliance among trusts. This is a structure used by many small business owners in Australia, especially in our rural communities. The budget has allocated $77.8 million over the next four years to improve compliance and to boost its data matching capabilities with third-party information. Last year they tested the data matching by looking at the ownership of luxury boats; this year it may be cars, property or similar items.

• Many small business owners have resorted to the 457 system to replace staff lost to the mining boom, but the budget has delivered a double blow to the 457 visa program. The government will nearly double application fees to $900, and The Fair Work Ombudsman is also set to receive $3.4 million over the next four years to monitor and enforce employer activity among 457 visa holders.

• There will be more upfront checks for startups seeking to register new Australian Business Numbers and an increased business-name registration fee.

There are a few positives for small businesses:

• They have promised $29.4 million in assistance for SME businesses quoting for government services and tenders.

• A further $12.9 million has been put forward to assist businesses in accessing the National Broadband Network.

• In terms of Superannuation, the concessional contribution cap will be increased so that:
  • From 1 July 2013 taxpayers aged 60 and over will have a $35,000 cap; and
  • From 1 July 2014 taxpayers aged 50 and over will have a $35,000 cap.
• The government will guarantee unpaid entitlements for any non-employee/contract workers in the textile, clothing and footwear industries if their employers collapse or go into bankruptcy. The new funding is an extension of the current Fair Entitlements Scheme and will be directed towards any workers who are not currently classified as employees.
• Spending on roads and infrastructure may result in savings for small business owners who need to travel around our cities to work.

• Currently any super fund member hit by excess contributions tax is charged 46.5%, regardless of their marginal tax rate. Now the changes will see excess contributions taxed at an individual’s marginal tax rate plus an interest charge, and individuals will be allowed to withdraw any excess concessional contributions from their fund. Many self-employed have made errors over the last few years, and, by breaching their caps, faced penalty tax at the highest rate. This goes a long way to reaching a fair solution.

• They have also promised funding to standardise the business name registration process.

Most importantly, we did not really see the government reign in spending and deliver a budget that will increase consumer and business confidence. Small business would have traded a lot for some strong leadership.

Oh, and if you are a small business owner planning a family, you have until 31 May by my reckoning to get working, as any later than that, and you will miss out on the baby bonus cut-off nine months later!

Businesses need to report if they:

The first annual report is due 21 July 2013 for payments made in the 2012–13 financial year. In this first year businesses that lodge their business activity statement quarterly, may lodge by 28 July 2013.

The information reported about payments made to contractors will be matched against other information held by the ATO to detect contractors who have not:

The good news is if you’re using LiveAccounts and you’re in the building and construction industry, we’ve got you covered. The team ... Continue reading]]> From 1 July 2012, businesses in Australia, who are in the building and construction industry need to report to the ATO each year, the total payments they make to each contractor for building and construction services.

Businesses need to report if they:

• are in the building and construction industry
• make payments to contractors for building and construction services, and
• have an Australian business number (ABN).

The first annual report is due 21 July 2013 for payments made in the 2012–13 financial year. In this first year businesses that lodge their business activity statement quarterly, may lodge by 28 July 2013.

The information reported about payments made to contractors will be matched against other information held by the ATO to detect contractors who have not:

• lodged tax returns, or
• included all their income in returns that have been lodged.

The good news is if you’re using LiveAccounts and you’re in the building and construction industry, we’ve got you covered. The team is currently working on the required changes which you’ll begin to see in LiveAccounts around mid to late June. Stay tuned as we’ll provide an update and some screen shots in the next week or so.

For more information about taxable payments reporting go to www.ato.gov.au/taxablepaymentsreporting to find:

• a list of activities and occupations that are considered to be building and construction services
• examples of situations where reporting is required
• exclusions from reporting requirements
• how to register to participate in an online seminar from your home or business
• Ask your question on this Forum and we’ll see what the Community has to say

Richard Puffe | Product Manager, LiveAccounts – MYOB