It’s a new financial year, a time for celebration and a small amount of relaxation (for some). It’s also a time of change, with a slew of new laws, requirements and systems coming into effect from today onwards.
With the tax office taking a keen look at SMEs’ tax returns, it’s important business owners do all the appropriate checks and balances to make sure you’re not getting a surprise door-knock in a month or so.
But we know the last month has been a busy one, so we’ve compiled some of the key changes you need to know about as a business owner for the next 12 months.
Single touch payroll
STP has been somewhat of a bogeyman recently, with the streamlined payroll reporting solution coming into effect for large employees last year. It’s officially now a requirement for small employers, with 19 or fewer employees, but the ATO has provided businesses with a three-month buffer zone to switch to the new method.
Almost all of the payroll software companies are STP-ready, but many businesses are not. A study from MYOB found 41% of businesses with 2-4 employees had never heard of STP, and 83% of businesses with just one employee also hadn’t.
Accountants have advised that switching to STP is a “relatively small administrative task” given business owners are using suitable software systems, and recommend SMEs get the jump on it, despite the three-month deadline.
Wages, they are a-changin’
Firstly, the minimum wage is going up, increasing 3% to $740.80 per week. Penalty rates are also changing too, down varying amounts for full time and casual workers on retail, hospitality, fast food and pharmacy awards.
Other relevant wage changes that might affect some young business owners include changes to the HECS repayment threshold, meaning if your wage is $45,881 or over, you’ll now need to start repaying your HECS debt.
Payroll tax is also changing across a number of states, check out the changes here.
Banking code comes into effect
As part of the changes brought on by the banking royal commission, the big four banks have all agreed to sign on to a brand new banking code of conduct.
This code includes a number of provisions for small business owners, including simpler loan contracts and fewer conditions for loans under $3 million. The code also has a number of provisions to prevent unfair contract terms between small businesses and the banks.
Banks will also be restricted from taking action against small businesses who have met all their loan repayments where the loan size is under $3 million.
However, corporate watchdog ASIC has delayed ruling on the definition of small business under the code, which currently defines an SME as having an annual turnover of $10 million or less, fewer than 100 full-time workers and less than $3 million in total debt.
The reccomendations from the royal commission would see that changed to just having fewer than 100 workers.
There aren’t a huge number of superannuation changes which affect employers, but there are some which might be useful to some SME owners.
The government will be closing all inactive super accounts with $6,000 or less in them from today onwards and transferring the funds to the ATO. The tax office will then attempt to find your active super account and transfer the money into it.
All super fund exit fees are also being banned, and retired workers between 65 and 71 will be permitted to make voluntary super contributions if they have a super balance of under $300,000 even if they don’t meet new work test requirements.