With the end of June approaching, most business owners should be in the process of finalising their current tax and ATO requirements to satisfy their End of Financial Year (EOFY) obligations.However, with the new financial year just around the corner, business owners must be aware and account for regulatory changes, effective from July 1 2017, that may impact business operations. This guide will provide direction for business owners about these changes and their potential impact on business operations.

If you are concerned with any of these changes, it may be be beneficial to consult with LawPath’s experienced business lawyers

Changes From July 1, 2017: A Business Owner’s Guide

Penalty Rates

If your business employees full, part-time or casual staff and you operate in the industries of retail, fast food, restaurant, hospitality or pharmacy you will need to be aware of the changes to penalty rates. While penalty rates will still apply after July 1 2017, they will be significantly reduced.

For example, retail Sunday wages will fall from 200% of the standard rate to 150%.On public holidays the penalty rate will fall from 250% to 225%. The Fair Work Ombudsman provides a comprehensive breakdown of these changes.

Business owners must be aware that changes to public holiday penalty rates will come into effect on July 1 2017. The Sunday rate cuts will also take effect on July 1 2017, however, the Fair Work Commission has stated it will be phased in over three or four years. These changes may require business owners to hold discussions and make adjustments to current scheduling arrangements with employees.

If you are looking to hire employees, it always recommended to get a written employment agreement to protect both your business and your employee(s).

Current 457 Visa Holders

Following on from the reforms announced in April concerning changes to 457 visa. If your business currently employs staff on a 457 visa, a number of changes commencing July 1 2017 may potentially impact your business operations. The Short-term Skilled Occupation List and Medium and Long-term Strategic Skills List will be reviewed. The English language salary exemption threshold, which exempts applicants whose salary is over $96,400 from the English language requirement, will be abolished.

Changes to character tests will become effective, including penal clearance certificates becoming mandatory. Finally, training benchmark requirements will be introduced through the introduction of legislation. If your business is impacted by these changes, it may require discussions with your employees currently on a 457 visa, and make arrangements accordingly.

Superannuation

A number of changes to superannuation will take effect from 1 July 2017. While some of these changes may not impact your business immediately it is important to be aware of the changes. Your employees may be affected if:

  • you make extra super contributions, including through salary sacrifice
  • you have an income over or close to $250,000
  • you or your spouse have an income less than $40,000
  • You have taken a break from the workforce or you work part time
  • You are approaching retirement.

A comprehensive breakdown of changes can be accessed on the ATO website. These superannuation changes may require discussions to be held with employees impacted by these changes to ensure a smooth transition over to the new superannuation processes.

Small Business Gains Concession (CGT)

From 1 July 2017 the Federal Government will limit access to small business CGT concessions. However, despite these changes, the concession will continue to be available to small business with either an aggregated turnover of less than $2 million; or total business assets valued at less than $6 million. Small business owners should be aware of these changes to the CGT concession and account for them accordingly.

GST Changes to Importing Low Value Goods

Effective July 1 2017, low-value goods (goods with a customs value of $1,000 or less) will be subjected to GST when imported directly into Australia by the recipient. However, for business owners, the cost of low-value goods used for business purposes will remain unaffected, provided the business is registered for GST. However, If a business is not registered for GST, then you will be treated as a consumer and not be able to recover the GST paid.

Conclusion

Overall, it is important to understand the key changes that will take effect from 1 July 2017, as these changes could impact your business operations heading into the new financial year.

Get on top of your legal obligations this end of financial year. Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 700+ expert lawyers or to get answers to your legal questions.

Daniel Saouma

Daniel is a Legal Intern at LawPath working with the content team. With a interest in consumer and media law he has completed a Bachelor of Business degree majoring in Marketing and is currently completing his law degree at the University of Technology Sydney.