In the Loop | What we want in the budget

Описание: As we approach the upcoming Federal Budget, many of us are eager to see what changes might be on the horizon. Whether it’s getting clarity on tax rules, reducing compliance burdens, or ensuring fair treatment for small businesses, there are plenty of areas where improvements could make a real difference. 

To keep you in the loop, MD, John Knights shares what our experts across Accounting, Tax, Superannuation + more want to see for business owners leading up to budget night.  

transcript

1. Bendel’s case + division 7a – business owners need clarity

One of the biggest issues coming up right now is Bendel’s case—which is all about how trusts distribute to companies and how the ATO is applying the Division 7A rules. 

A lot of business owners are concerned about how past distributions are going to be treated. Are they going to be taxed differently? Will there be penalties? And what about moving forward—will the government clarify how these rules will work in the future? 

Business owners and tax agents are looking for clear guidance, and the budget would be a great opportunity for the government to address this uncertainty. 

2. contractors + the gig economy – time for a new approach?

We’ve seen a huge shift towards the gig economy, and businesses are relying more on contractors than ever before. But the problem is, the tax system hasn’t kept up. 

Right now, there are multiple, conflicting rules for contractors—income tax rules, payroll tax rules, and different state-based classifications. It’s a mess. 

Wouldn’t it be great if there was just one clear rule? Maybe something simple, like: If a contractor operates through a company, they’re automatically taxed at the company rate. That would bring much-needed consistency and fairness to the system. 

3. division 296 – superannuation taxation

Another hot topic is Division 296, which deals with taxing superannuation balances over $3 million. 

The biggest issue? The government was planning to tax unrealised gains—which is a real concern for people with large super balances. Imagine being taxed on money you haven’t even received yet! 

The legislation hasn’t passed, but there’s still uncertainty about whether it will be scrapped, adjusted, or pushed through. We need clarity so people can plan properly for their future. 

4. harmonisation of state taxes – wishful thinking?

One thing we’d love to see—though I think we’ve got Buckley’s chance—is a national approach to state taxes. 

Right now, every state has different payroll tax thresholds, land tax rules, and exemptions. It’s a nightmare for businesses operating in multiple states. If the government could bring some consistency to state-based taxes, it would save businesses thousands of dollars in compliance costs every year. 

5. easy individual tax returns – less paperwork, please!

A simple way to help business owners and accountants? Reduce the paperwork. 

Right now, tax agents spend countless hours preparing individual tax returns that could be automated. What if we brought back a standard automatic tax deduction for work-related expenses? That alone would make tax time easier and free up resources for more valuable work. 

We also need more automation in tax compliance—from BAS lodgments to payroll tax reporting. Investing in digital transformation would take a lot of pressure off businesses. 

bonus: small business support + ato guidance 

One final thing - Rebecca from our Sydney office raised an important point. Business owners and tax agents need better support from the ATO. 

At the very least, we’d love to see: 
No new tax increases 
No additional compliance burdens 
Fewer audits 
A less aggressive approach from the ATO 

Lately, we’ve seen the ATO taking a tougher stance on audits and debt collection, which has put a lot of pressure on small businesses. A more collaborative approach would go a long way in building trust and stability. 


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