Your Guide to the Federal Budget 2018
BUDGET UPDATE │ MAY 2018
The Federal Treasurer Scott Morrison handed down his third Federal Budget on Tuesday 8 May 2018. With an upcoming election, this year’s Budget contains a few apparent sweeteners to woo voters. Stay across the important updates with our Federal Budget 2018 Overview.
Topics:
– Extending the $20,000 Instant Asset Write-Off for Businesses
– New Research & Development Incentives
– Crackdown on the Black Economy
If you have any questions about how the Budget measures will have on your personal circumstances, please speak your local MAS Tax Accountant.
This year’s Budget is a blend of some 37 measures, but no single big-ticket item such as the bank levy of last year.
The measures range from those that impact individuals (personal tax cuts over the next 7 years; tightening ATO oversight of deductions claimed) and small businesses (extension of the current $20,000 instant asset write-off for small business entities) through to big businesses (broadening the definition of ‘significant global entity’ to ensure that Australia’s multinational tax integrity rules operate as intended).
For those wondering about superannuation, mercifully there were no major changes this year.
Major Tax Measures At-A-Glane
Individuals |
Businesses |
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· Phased reform of personal income tax relief for low and middle-income earners · Change to personal income brackets · New Low and Middle-Income Tax Offset introduced · No Medicare levy increase – stays at 2% · Additional funding being allocated to the ATO for compliance enforcement – which may mean targeting work-related expenses |
· Small business $20,000 instant asset write-off extended · Black economy and illegal phoenixing activities targeted through increase in ATO funding · Overhaul of the research and development (R&D) tax incentive |
Key Financial Outcomes
– Budget expected to return to a modest surplus of $2.2 billion by 2019-20 and increase to projected surpluses of $11.0 billion in 2020-21 and $16.6 billion in 2021-22.
– Budget deficit forecast to drop to $14.5 billion in 2018-19, after hitting $18.2 billion in 2017-18.
– Unemployment will be 5.25% in 2018-19, down from 5.5% in 2017-18 and projected to fall to 5% in 2021-22.
– Inflation will be 2.25% in 2018-19, up from 2% in 2017-18 and projected to hit 2.5% in 2020-21.
– Revenue is estimated to be $486.1 billion in 2018-19, up from $456.2 billion in 2017-18 and projected to reach $537.9 billion in 2020-21.
What is the Government Focusing On?
This year’s Budget was all about building a stronger economy, more jobs and guaranteeing essential services that all Australians rely on.
Here is a list of the Government’s to-do’s and what actions they have promised to carry out.
The to-do’s |
The actions |
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1. Provide tax relief to encourage and reward working Australians and reduce cost pressures on households, including lowering electricity prices. |
Lower personal income tax and provide tax relief for low and middle-income earners as part of the Government’s 7-year ‘Personal Income Tax Plan’. By 2024-25, approximately 94% of taxpayers are projected to face a marginal tax rate of 32.5% or less. |
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2. Keep backing business to invest and create more jobs, especially small and medium sized businesses. |
Legislating tax cuts for all businesses, prioritising small to medium businesses, delivering infrastructure that supports industries and jobs, and targeting incentives to promote research, development and new technology. |
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3. Guarantee the essential services that Australians rely on, like Medicare, hospitals, schools and caring for older Australians. |
Funding for hospitals and schools and a comprehensive approach to aged care for older Australians, guaranteed funding for disability services. |
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4. Keep Australians safe, with new investments to secure our borders. |
Strengthening security at Australian airports, enhancing intelligence capabilities and implementing smarter biosecurity systems to safeguard our border. |
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5. Ensure that the Government lives within its means, keeping spending and taxes under control. |
Government borrowings will continue funding critical infrastructure and defence spending. |
Speak with our Tax Accountants about any questions you may have regarding what impact the Budget measures will have on your personal circumstances.
Key Tax Dates
Be sure to mark these in your 2018 calendar:
|
Date |
Obligation |
|
21 May 2018 |
· Lodge and pay April 2018 monthly activity statement. · Lodge Fringe benefits tax annual return (if lodging by paper). |
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26 May 2018 |
· Lodge and pay eligible quarter 3, 2017-18 activity statements if you lodge electronically. |
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28 May 2018 |
· Pay Fringe benefits tax annual return. · Lodge and pay quarter 3, 2017-18 Superannuation guarantee charge statement – quarterly (NAT 9599) if the employer did not pay enough contributions on time. · Employers lodging a Superannuation guarantee charge statement – quarterly (NAT 9599) can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They still have to pay the remaining super guarantee charge. |
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5 June 2018 |
· Lodge tax return for all entities with a lodgment due date of 15 May 2018 if the tax return is not required earlier and both of the following criteria are met: – non-taxable or a credit assessment in latest year lodged – non-taxable or receiving a credit assessment in the current year · Lodge tax returns due for individuals and trusts with a lodgment due date of 15 May 2018 provided they also pay any liability due by this date. |
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21 June 2018 |
· Lodge and pay May 2018 monthly activity statement. |
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25 June 2018 |
· Lodge 2018 Fringe benefits tax annual return for tax agents (if lodging electronically). Payment (if required) is due 28 May. |
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30 June 2018 |
· Super guarantee contributions must be paid by this date to qualify for a tax deduction in the 2017-18 financial year. |
For more information or to schedule an appointment, please contact us below or call us on 1300 627 829
Source: Tax Wise 2018
