Each year, the first day of July brings with it plenty of changes for Australian small and medium businesses.
As the new financial year gets underway, SMEs need to be aware of a host of tax and legal changes, including to the minimum wage, country of origin labels and the tax treatment of changing business structures.
Here’s SmartCompany’s guide to important changes your business needs to know about.
Starting today, the minimum wage for Australian employees has increased by 2.4%.
Full-time workers are now entitled to at least $17.70 an hour, or $672.70 a week, which is an increase of around $15 per week.
Francessca Lee, employment lawyer at McDonald Murholme, previously told SmartCompany the minimum wage does often increase at the start of a new financial year so businesses should be prepared.
“It’s quite important in the sense all the awards will have to change to reflect the new minimum age,” Lee said.
The federal government’s changes to country of origin food labels also come into effect today.
The changes are designed to give consumers more information about the origin of the ingredients in the products they are buying. Where previously businesses would indicate on product packaging whether a good was produced, grown or made in Australia, businesses will now have to indicate on the packaging the minimum proportion of Australian ingredients in percentage terms.
While many businesses in the food industry will already be up to speed on the changes, Melissa Monks, special counsel at King & Wood Mallesons previously told SmartCompany there is a two-year grace period for businesses to implement the new labels, says
“However, given some of the complexity in the reform, the often long lead time for labelling some food products and consumer demand for change, businesses are best advised to get up to speed with the new rules now and start their transition before it becomes mandatory on July 1, 2018,” Monks said at the start of June.
The high-income threshold for unfair dismissal has increased from $136,700 per annum to $138,900, from today. The compensation cap for unfair dismissal claims has also changed, from $68,350 to $69,450.
Employers need to be aware that unfair dismissal laws now cover employees who earn above $136,700 and under $138,900.
Self-managed superannuation funds with collectables and personal use assets held prior to July 1, 2011, had previously been exempt from certain storage and insurance requirements.
However, from today, those grandfathering provisions will expire.
As Jo Scrima, director of superannuation at MGI Adelaide, previously explained when writing for SmartCompany, the Australian Tax Office’s requirements in this area are strict.
“According to the ATO, collectables and personal use assets are things like artwork, jewellery, vehicles, boats and wine,” Scrima said.
“Investments in such items must now be made for genuine retirement purposes only. They are not to provide any present-day benefit.”
Eligible small businesses will now be able to change the legal structure of their business without incurring a capital gains tax liability, thanks to tax changes coming into effect today.
Originally announced as part of the 2015 federal budget, the Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 was passed by the federal parliament earlier this year.
Under the change, eligible small businesses will have access to an optional rollover provision when they transfer an active business asset to another small business entity as part of a genuine business restructure. However, to qualify, the “ultimate economic ownership” of the asset must not change.
Small businesses were originally given until June 30 to be compliant with the ATO’s SuperStream system, however, this deadline has since been extended to October 28.
SuperStream requires employers to make super contributions for their employees electronically in a standard data set.
ATO deputy commissioner James O’Halloran said in June that the ATO will not take “compliance action” against small businesses that have missed the June 30 deadline.
“By providing this flexibility, small businesses will have another four months to make the changes and ensure they are compliant by 28 October,” he said.
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
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