Both houses of Parliament agreed to the Budget Savings (Omnibus) Bill 2016 which has received Royal Assent.
This passes 24 separate minor tax and social security measures. Key changes include:
Reduction in R & D Tax Incentive
Of immediate interest, the Government has finally passed the 1.5% reduction in rates of R & D Tax Incentive. While this reduction has been mooted for a number of years and has previously failed to pass Parliament, it now applies to all financial years commencing on, or after 1 July 2016. From that date, the new R & D tax offset rates will apply as follows:
- Companies with less than $20 Million turnover: 43.5% (reduced from 45%)
- Companies with more than $20 Million turnover: 38.5% (reduced from 40%)
If you would like information about the R & D Tax Incentive and how it may assist your business, please contact Jamie Towers.
Introduction of Single Touch Payroll Reporting
Also passed, but with delayed application is ‘Single Touch Payroll Reporting’ (STPR). This is designed to eliminate multiple processing of payroll information. Businesses with 20 or more employees will require ‘Standard Business Reporting’ (SBR) enabled software which automatically reports salary and wage information to the Commissioner at the time these amounts are paid. This should remove the processing of PAYG information from the BAS or IAS.
This should also incorporate TFN declarations, choice of fund and other measures. It should eliminate the requirement to provide Superannuation Guarantee Statements, annual payment summaries and annual reconciliation reports to the Commissioner. Employees should be able to obtain the information about their payments and PAYG withholding from an online service.
The STPR should apply to employers with 20 or more employees from 1 July 2018.
Please contact your usual Hanrick Curran adviser should you wish to discuss these changes further.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.