As the clock counts down to Australian tax time there is often a feeling of apprehension mixed with relief for many businesses. True, there are dark days ahead and the desperate claw through boxes of receipts and checking to see the latest updates on taxation laws and allowances – but there’s also that light at the end of the tunnel. Very soon it will all be over for another year.
Yet your business (and you) need not view tax time with such a feeling of dread. It’s a fresh start, allowing you to take a clear stock of your goals and achievements and re-align. Try and think of it as a necessary but positive force for change.
Wireless Communications have come up with three Australian business tax tips to help ease you out of the 2017 financial year and into the next. Whether you are an individual, small business, medium enterprise or large business – we’ve got an angle for you.
Private Healthcare Rebate
This is a great tax rebate to stay on top of and is a helpful initiative between the Australian Government and the health system that is intended to make private health cover more affordable for Australians. If you’ve never heard of it and are considering private healthcare and weighing up the pros and cons – this is definitely a pro.
There are rules and regulations surrounding the private healthcare rebate, and like many tax laws, are subject to how much you earn. Your cover needs to match the requirements before you are eligible for a rebate. If you are unsure if you qualify for the rebate, your private health insurer can tell you whether your policy meets these conditions.
It’s important to keep abreast of changes to the rebate, as depending on how you claimed the rebate, and the percentage you claimed, this may result in a tax liability or offset. If your business or employer is paying for your insurance, or you have more than one adult on your private health cover this can affect your rebate too.
As an employer, there are a wide range of incentives and offsets involved in providing corporate health policies to your employees – it’s worth considering if this offers your business a reasonable ROI.
Remember: don’t forget that the private healthcare rebate is adjusted every year on April 1.
Reportable Tax Position Schedule
‘The reportable tax position (RTP) schedule is a schedule to the company income tax return that requires large businesses to disclose their most contestable and material tax positions.’ ATO Website
The RTP applies to large business, and the tax office notifies your company in writing if you need to adhere this. There are three categories that your company could fall under: Category A, B or C. While you likely have a highly qualified accountancy service whose job it is to stay on top of these changes, at Wireless, we are a firm believer in self-education.
With that in mind, there have been some substantial revisions to the 2017 Category C and if your income year ends on or after June 30, 2017, you are required to answer the new Category C questions.
Additionally, if your company has a turnover of above $250 million then your business could be affected by changes to requirements for the 2018 period. You can find the 2017 Guide to Reportable Tax positions here – it’s worth a read.
Small Business Asset Write-Off Scheme
In 2015 the ATO introduced a law that allowed small businesses to claim an instant asset deduction up to $20,000. This was to replace a previous write-off threshold of $1,000 and was slated to end on June 30, 2017.
A recent update has meant brilliant news for small businesses – the law has been extended for another 12 months. It’s a great boost to small business growth, allowing small business owners to invest back into their business and in new equipment.
Just make sure you do your due diligence and check that your purchase is covered under the conditions of the law. $20,000 is a lot to blow on not reading the fine print.
Excluded assets include:
- Horticultural plants – subject to their own ‘uniform capital allowance’ rules (UCA);
- Capital works – subject to their own ‘capital works’ depreciation rules;
- Assets allocated to a low-value pool or software development pool – subject to the deduction rates applicable under those rules;
- Primary production assets for which the entity has chosen to use the normal depreciation rules rather than the simplified depreciation rules; and assets leased out to another party on a depreciating asset lease.
It’s the perfect time to invest in communications equipment for your business and staff. Whether that’s a new fleet of mobile phones, laptops, iPads or an internal communications system. These are all depreciable assets so it’s a smart business move to take advantage of this law. A way to re-invest in your company without the pain of full investment.
So remember: breathe deep this tax time. Invest in your business and view it as a time to re-assess and familiarise yourself with the state of your business and fiscal finances. It is so easy to get overwhelmed or distracted with the day-to-day running of a business that you can lose a sense of the bigger business picture.
Why not get in touch with one of our friendly service team to discuss your business’ communications needs today. We have so much on offer and can tailor make a solution that keeps you, your staff and the tax man happy.