Many changes for Australian small and medium businesses come on 1 July each year.
With the new financial year now underway, there are a host of tax and legal changes that SMEs need to know about.
Here are the changes that SMEs need to know about:
Rise in minimum wage
Effective 1 July 2016, the Australian government has increased employees’ minimum wage by 2.4%. Full-time employees can now receive a minimum of $17.70 per hours, or $672.70 weekly, up by about $15 weekly.
It is important for businesses to know about this as all awards must change to mirror the new minimum wage.
Amendments to the country of origin labels
The changes to the country of origin labels also became effective on 1 July 2016. With the changes, consumers will be able to get more information as to the origin of the ingredients in the products they are purchasing. In the past, the information on whether a product was made or grown in Australia is included on product packaging. But now businesses are required to specify on the packaging the smallest proportion of Australian ingredients by percentage.
A good number of businesses in the food sector would already be informed about these changes, but still businesses have been granted a two-year grace to implement the new labels. The new rule would then be mandatory effective 1 July 2018.
Change to the high-income cap for unjust dismissal
Starting 1 July 2016, the high-income limit for unjust dismissal has been upped to $138,900 per year from $136,700. The government has also increased the compensation threshold for unjust dismissal claims from $68,350 to $69,450.
Business owners should also know that unjust dismissal rules now include employees with earnings above $136,700 and below $138,900.
Amendments to SMSF laws for collectables and personal use assets
Self-managed superannuation (SMSF) funds having collectables and personal use assets owned before 1 July 2011 will no longer be exempt effective 1 July 2016. These assets include items such as jewellery, artwork, boats, vehicles and wines.
The ATO now requires that such items be made solely for retirement purposes, not for present-day benefit.
Tax break for people wishing to change business structures
Qualified small businesses will no longer incur capital gains tax liability when they change the legal structure of their business.
The new rules give qualified small businesses access to an optional rollover provision when they hand over an active business asset to another small business entity as part of a real business structure change. But businesses have to be eligible by not changing the “ultimate economic ownership” of the asset.
Four months to prepare for SuperStream
The deadline for small businesses to comply with the ATO’s SuperStream system was originally 30 June 2016. However, the deadline has been extended to 28 October 2016.
Under SuperStream, small business owners are required to pay the super contributions for their employees electronically in a standard data set.
Small businesses that missed the original deadline will not be subjected to any compliance action.
Meet with a qualified tax advisor, accountant or bookkeeper for tax enquiries and to be updated with legal and tax changes. PJS Accountants can help you organise your tax affairs. We work with large companies, SMEs, family businesses and individuals. For enquiries, contact PJS Accountants.