The Liberal Coalition has Emerged with a Shock Victory
Following the federal election, with the promise of lower taxes seemingly enough to sway voters. What does it mean now that we know the Coalition has held power? Firstly, they were strongly averse to Labor’s four core policies mentioned above, so taxpayers don’t need to worry about the points being raised by these policies. Outside of fighting these policies, there wasn’t much that the LNP brought to the election other than what was earlier published, either in their budget on 2 April or prior.
Instant Asset Write-off
Thinking of purchasing assets for your business? The instant asset write-off has been increased and extended. From 2 April 2019, businesses with an annual turnover of less than $50 million may claim an outright tax deduction for asset purchases under $30,000 (rather than having to capitalise and depreciate these asset purchases).
Small Business Company Tax Rate
The government will decrease the company tax rate (and the franking rate) for companies with an annual turnover of less than $50 million to 26% for the 2020-21 tax year and 25% from 1 July 2021.
ATO Tax Avoidance Taskforce
The LNP has announced an extra $1 billion over four years for the ATO to undertake additional compliance activities targeting high wealth individuals, trusts and family groups, as well as large public companies and multinationals.
A supplementary low and middle-income tax offset of up to $1,080 will be available for individuals earning up to $90,000, being phased down to nil once your income exceeds $126,000. This offset will automatically be applied upon lodgement of your 2019 income tax return.
Marginal Tax Rates
Individuals earning over $37,000 will see a decrease in their marginal tax rate from 1 July 2022, when the upper limit of the 32.5% tax bracket jumps from $37,000 to $41,000. The 37% bracket limit will increase from $90,000 to $120,000.