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From 1 January 2018 eligible small businesses (generally with less than $2 million turnover) will not be required to pay duty on certain types of insurance, including:

> Commercial vehicle insurance - for a motor vehicle used primarily for business purposes

> Commercial aviation insurance – for an aircraft used primarily for business purposes

> Occupational indemnity insurance (or professional indemnity) - covering liability arising out of the provision of professional or other services (other than medical indemnity insurance)

> Product and public liability insurance – insurance covering liability for personal injury or property damage occurring in connection with, or arising out of the products or services of, a business.

In order to receive the insurance duty exemption for your small business, you need to provide a small business declaration to your insurer. A declaration is only valid for one income year, so a new declaration will be required each income year.

www.revenue.nsw.gov.au/taxes/insurance/exemptions/sbe#type

PAYROLL TAX THRESHOLD CHANGES

Payroll tax is applied to a business's New South Wales wages that exceed the threshold. The current payroll tax rate is 5.45% on wages in excess of the threshold of $850,000. Businesses in NSW will benefit from a progressive increase in the payroll tax threshold over the next four years as follows:

 YEAR THRESHOLD 
2018-19  $850,000
 2019-20  $900,000
 2020-21  $950,000
 2021-22  $1,000,000

 

The $20,000 Instant Asset Write-off for small businesses with a turnover of less than $10 million is proposed to be extended to 30 June 2019. This change is not yet law.

RURAL FINANCIAL COUNSELLING SERVICE

Rural financial counsellors help farmers who are dealing with, or are at risk of, financial hardship.

Rural financial counsellors can:

> Help identify financial and business options, including negotiating with lenders

> Help develop an action plan > Help access the Farm Household Allowance (FHA)

> Provide information about government and other assistance schemes

> Provide referrals to accountants, agricultural advisers and educational services

> Provide referrals to Department of Human Services and to professionals for succession planning, family mediation and personal, emotional and social counselling.

There are 30 Rural Financial Counsellors located throughout

NSW, including offices at Young, Forbes, Dubbo, Mudgee, Ganmain, Crookwell and Yass-Gundagai.

A full list of Rural Financial Counsellors in NSW and their contact details can be found at:

http://www.agriculture.gov.au/ag-farm-food/drought/assistance/rural-financial-counselling-service/nsw

ATO ASSISTANCE

The Australian Taxation Office can help people affected by drought and other natural disasters by: allowing more time to pay tax debts without incurring interest charges and/or by arranging for tax debts to be paid in instalments without interest charges.

In special circumstances, the Commissioner for Taxation may release individuals from payment of income tax, fringe benefits taxes and some other taxes where it is shown that payment would cause serious hardship. The Tax Office will look at circumstances on a case–by–case basis.

FARM MANAGEMENT DEPOSITS

The Farm Management Deposit scheme enables primary producers to make tax-deductible deposits of up to a total of $800,000 during prosperous years and then redraw them (and pay tax on them) in less prosperous years.

Deposits must be held for a period of at least 12 month, unless the business subsequently experiences severe drought.

Farm Management Deposit balances can be offset against other primary production loans or debt to reduce overall interest paid. All major banks have now promised to offer offset facilities. Contact your bank manager for more

information.

www.ato.gov.au/Business/Primary-producers/In-detail/Farm-management-deposits-scheme

IMMEDIATE DEDUCTION FOR FODDER

Effective 19 August 2018, primary producers can immediately deduct (rather than depreciate over three years) the cost of fodder storage assets, such as silos and hay sheds used to store grain and other animal feed storage, making it easier for farmers to invest in and stockpile fodder.

Primary producers can also claim an immediate tax deduction for the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.

www.agriculture.gov.au/ag-farm-food/drought/assistance/tax-relief

INTEREST RELIEF OFFERED BY BANKS

Many of the banks have announced interest rate relief for farmers impacted by the drought. These include reducing variable interest rates, suspending loan repayments for a period of time, waiving fees associated with restructuring business loans, offering discounted loans, not applying penalty interest to overdue payments and allowing early withdrawal of Farm Management Deposits without penalty.

Contact your bank manager for more information.

CROP AND LIVESTOCK INSURANCE DUTY

From 1 January 2018 crop and livestock insurance (Type C general insurance) will be exempt from insurance duty. The only thing that has changed in relation to crop and livestock insurance is the rate of duty, which has gone from 2.5% to 0%. The definitions of crop and livestock insurance have not changed.

PRIMARY PRODUCER HEAVY VEHICLE

Primary Producers who register or renew their heavy vehicle (>4.5 tonnes) from 1 July 2018 up to 30 June 2020 will receive a rebate. The rebate covers some registration costs but does not include compulsory third party insurance, heavy vehicle inspection fees (if applicable), stamp duty (if applicable) and number plate fee (if applicable).

http://www.rms.nsw.gov.au/business-industry/heavy-vehicles/registration/drought-relief/pp-hv-refundsrebates.html

Primary producers may also be able to claim a refund on some past heavy vehicle registration charges paid from 1 July 2015 to 30 June 2018. Affected primary producers will be contacted by mail and notified of the process to claim their refund.