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The instant asset write-off threshold of $30,000 has been extended to 30 June 2020.

Business with a turnover less than $50 million can claim a tax deduction of up to $30,000 for the business portion of each asset (new or second hand), purchased and first used or installed ready for use from 7.30pm (AEDT) on 2 April 2019 until 30 June 2020.

NB: The GST exclusive cost of the asset must be less than $30,000 in order to claim an instant asset write-off.

DROUGHT ASSISTANCE FUND

The Drought Assistance Fund provides a $50,000 interest free seven year loan to transport stock, fodder and water; genetic banking of breeding herds, fodder and water infrastructure and activities which promote profitability and resilience as a result of the on-farm investment. No repayment is required in the first two years.

www.raa.nsw.gov.au/loans/drought-assistance-fund
NB: Applicants who received a loan in the 2018-19 financial year can apply for an additional loan of up to $50,000 in the 2019-20 financial year.

FARM INNOVATION FUND

The Farm Innovation Fund provides a low interest loan scheme to build permanent infrastructure to a maximum of $1,000,000 per project. 

The Farm Innovation Funds helps to improve farm productivity, manage adverse seasonal conditions and ensure long term sustainability.  The interest rate is fixed at 2.5% and the loan is for a maximum 20 year period.

www.raa.nsw.gov.au/loans/farm-innovation-fund
Interest charges on Farm Innovation Fund loans for the 2019-20 year will be waived.

FUEL TAX CREDIT RATES

Fuel tax credit rates increased on 5 August 2019.  The new rates are 16 c/litre for heavy vehicles travelling on public roads and 41.8 c/litre for vehicles travelling off public roads and for powering auxiliary equipment of a heavy vehicle.

EMERGENCY WATER INFRASTRUCTURE REBATE

The Emergency Water Infrastructure Rebate covers 25% of the cost of purchase, delivery and installation of water infrastructure that addresses animal needs and improves resilience to drought.

Eligible activities include:

  • Pipes
  • Water storage devices such as tanks and troughs
  • Pumps
    De-silting of existing dams
  • Bores and associated power supply.

Ineligible activities include:

  • Construction of dams
  • Water infrastructure for uses other than to supply water for livestock.

The rebate can be claimed for eligible water infrastructure expenses since 1 July 2018, up to a maximum rebate of
$25,000 per farm enterprise.

Apply at www.raa.nsw.gov.au/grants/emergency-water-infrastructure-rebate-scheme

EMERGENCY DROUGHT TRANSPORT SUBSIDY

Round Two of the Drought Transport Subsidy is now available. The subsidy can be applied for the cost of transporting fodder, water to a property for stock or domestic use, stock  to and from agistment, and stock to sale or slaughter. For applications received from 1 July 2019 the subsidy also includes transporting of farm chemicals, fertiliser and seed  to farms.

Farmers who applied for the Drought Transport Subsidy in the 2018/19 financial year (Round One) are able to apply for an additional $40,000 for invoices dated between 1 July 2019 to 30 June 2020. Farmers who did not apply for the Drought Transport Subsidy prior to 30 June 2019 (Round One), can apply for a maximum subsidy of $40,000 for invoices dated from 1 January 2018 to 30 June 2020.

The subsidy covers up to 50% of the full cost of freight up to a maximum of $7.50 per kilometre. For invoices dated from  1 July 2019 to 30 June 2020, the maximum distance of 1500km that is able to be subsidised has been removed.

Apply at www.raa.nsw.gov.au/grants/transport-subsidy-emergency-drought-relief.

NSW LONG SERVICE LEAVE CORPORATION

Workers must be registered and record the time worked in the relevant industry at the end of each financial year.  Self-employed workers also report details of their assessable income and prescribed costs each year.  Lodgements can now be made for up to 6 prior financial years.

Workers covered by the Building and Construction Industry Long Service Payments Act 1986 are those who carry out construction, reconstruction, renovation, alteration, demolition, maintenance or repairs of or to any of the following: Airfields, aqueducts, breakwaters, bridges, buildings, chimney stacks, cooling towers, docks, drilling rigs, fences, gas holders, works for water supply or storage, harbour/river or water course improvements for the purpose of navigation, jetties, irrigation works, navigational lights/beacons or markers, piers, pile driving, pipelines, railways, roads, sewerage works, silos, swimming pools, transmission of electric power, transmission of wireless or telegraphic communications, tunnels, viaducts and wharves.

It includes structures, fixtures or works for use in, or in conjunction with, any of the above and site preparation. Work is not restricted to onsite work; it also includes some offsite work.

Work carried out in NSW in the contract cleaning industry has been covered since 1 July 2011. The work has to be all or mostly involved in bringing a premises to a clean condition, or keeping it in a clean condition. A premise means the whole or any part of a building, structure or place, whether built on or not. The scheme covers cleaning work performed on commercial and domestic premises and can include a small amount of minor property maintenance. 

Examples of types of cleaning work covered include: mopping, vacuuming, dusting, sweeping, Carpet cleaning, high pressure cleaning of pavers, walkways and buildings, window and gutter cleaning, graffiti removal, swimming pool cleaning (not repair &/or maintenance work), housekeeping.

For more information, go to:  https://www.longservice.nsw.gov.au

New legislation to deny some land owners a tax deduction for the costs of holding vacant land is awaiting Royal Assent.

The new law will deny individuals, self-managed superannuation funds and discretionary trusts a tax deduction for borrowing costs, interest on loans to acquire the land, land taxes, council rates and maintenance costs.

Land is considered vacant if:

  • at the time the expense was incurred, the land did not contain a substantial and permanent structure; or
  • the land did contain a substantial and permanent structure that is residential premises, the premises is not lawfully able to be occupied, or it is not rented out or made available for rent.

The new law will apply where the land is held pending the development of residential property or where land is leased to a lessee who is not conducting a business. This includes land leased to a community club, government organisation, charity or hobby farm, where there is no business activity being undertaken.

Once Royal Asset is obtained, the new legislation will be effective from 1 July 2019 and will apply even if the land was held by the entity before 1 July 2019.

A recent Full Federal Court decision handed down on 21 August 2019 confirmed that all employees (including part-time employees) are entitled to  10 "working days" of personal/carer's leave per year under the Fair Work Act, regardless of how many hours the employees work per day or how many days are worked per week.

The decision will have wide-ranging implications for employers, the overwhelming majority of whom do not presently accrue personal/carer's leave in this manner.

WHAT THIS MEANS FOR EMPLOYERS
Most payroll systems accrue personal/carer's leave on an hourly basis. Rather than expressing an employee's leave entitlement in days or weeks, payroll software tends to record the accrual as an hourly amount (with 7.6 hours often reflecting one day's accrual).

Most payroll systems tend to accrue 76 hours of personal/carer's leave per year for full time employees, and a pro-rata amount for part-time employees.

If your payroll system works in this way, you will need to ensure that:

  • 12 hour shift workers either accrue 120 hours of personal/carer's leave per year (instead of 76) or, alternatively, only have 7.6 hours leave deducted from the personal/carer's leave balance, yet pay the shift worker for the entire shift whenever they are absent from an entire 12 hour shift
  • similar treatment is afforded to other shift workers who work more than 7.6 ordinary hours in a day; and
  • part-time employees accrue a full 10 working days per year (as opposed to a pro-rated amount based on their shorter working week).

From 1 July 2018 if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts.

2019-20 is the first year you are entitled to use carried forward unused amounts. Unused amounts are available for a maximum of five years, and after this period will expire.

For example, if you had concessional contributions of $3,000 in 2018-19, your unused concessional amount carried forward to 2019-20 is $22,000. Your general concessional contributions cap in 2019-20 is $25,000, allowing a maximum concessional contribution in 2019-20 of $47,000.

WORK CHRISTMAS PARTIES AND GIFTS

The Fringe Benefits Tax and Income Tax rules surrounding work Christmas parties and gifts are complex.

A brief summary of the most commonly encountered scenarios for employers using the actual FBT method is provided below with full details at https://www.ato.gov.au/general/fringe-benefits-tax-(fbt)/in-detail/fbt-and-christmas-parties 

           
  Fringe Benefits Tax  Income Tax   GST
 Christmas Party - food drink and entertainment: cost $299 or less per employee  Exempt from FBT  Not tax deductible No GST credit claimable
 Christmas Party - food drink and entertainment: cost  $300 or more per employee  Subject to FBT  Is tax deductible GST credit claimable
 Food drink and entertainment provided to client/supplier  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to employee: $299 or less - not entertainment**  Exempt from FBT  Is tax deductible GST credit claimable
 Gift to employee: $299 or less - entertainment  Exempt from FBT  Not tax deductible No GST credit claimable
 Gift to client/supplier - not entertainment  Exempt from FBT  Is tax deductible GST credit claimable

* Entertainment = theatre, movie or sporting event tickets, gym membership, sporting club memberships
** Not entertainment = bottle of wine, Christmas hamper, perfume, flowers, pen

The superannuation concessional contribution cap for the 2019-20 financial year is $25,000.

Concessional contributions include:

- compulsory employer contributions (superannuation guarantee)
- any additional concessional contributions your employer makes
- salary sacrifice payments made to your super fund
- contributions you are allowed as an income tax deduction*

*  Eligible employees are now able to claim a tax deduction for contributions personally made to a superannuation fund.  The total of all concessional contributions including superannuation guarantee, salary sacrificed contributions and personal deductible contributions must not exceed $25,000 per year.

TAX TIME 2019

TAX PLANNING - HOW MUCH TAX WILL YOU PAY IN 2019?

Tax planning offers many opportunities for taxpayers:

- Legally arrange your affairs in a manner to minimise your taxation liabilities
- Control the amount of tax you pay
- Maximise your access to tax rebates
- Plan your cash flow by knowing your taxation liabilities in advance.

Book your tax planning appointment before 30 June 2019 to review your 2019 profit, to estimate your tax payable and to put in place tax minimisation strategies.

NEW REBATE FOR DRONES

The NSW quad bike safety rebate has been extended to include the purchase of a drone.  Only one $500 rebate per business can be claimed towards the purchase of an eligible drone. 

More details can be found here: https://www.safework.nsw.gov.au/resource-library/agriculture,-forestry-and-fishing-publications/quad-bike-pubs/quad-bike-safety-improvement-program-FAQs