The 2018-19 Budget was handed down this week with a number of changes set to impact small businesses within the hospitality industry.

Among the announcements was an extension of the instant asset write-off scheme to 30 June 2019, enabling small businesses with an annual turnover of up to $10 million to immediately deduct eligible assets each costing less than $20,000.

The government has also legislated tax cuts for small and medium businesses with annual turnover up to $50 million, as part of the Ten Year Enterprise Tax Plan. The Plan has also increased the unincorporated small business tax discount rate from 5 per cent to 8 per cent (up to a cap of $1,000), which will increase to 16 per cent by 2026‒27.

As previously reported by Hospitality, craft brewers will benefit from changes to the tax system that will see beer sold in smaller kegs taxed at the same lower rate that applies to large kegs of more than 48 litres. Brewers and distillers across Australia will also benefit from an increase in the amount they can claim on the excise they pay, from $30,000 to $100,000 from 1 July, 2019.

The budget also included changes to the research and development (R&D) initiative, which will now target big business rather than start ups.

“To support companies genuinely investing in R&D we are refocusing the R&D tax incentive to give more support to companies that invest a higher proportion of what they spend in R&D, over and above what others would just do anyway,” Treasurer Scott Morrison said in his budget speech.

An additional $250 million will be invested into the Skilling Australians Fund and the budget provided clarity on the refunds businesses can claim when sponsoring overseas workers. Businesses will be able to access refunds if sponsored visa-holders do not commence employment, are refused on health or character grounds or depart their employer within the first 12 months.

Restaurant & Catering Australia (R&CA) welcomed the announcements, saying the measures will encourage further growth across the hospitality sector.

“With over 92 per cent of businesses in the café, restaurant and catering sector small businesses with 19 employees or less, it is critical that the Federal Government pursues policies which enable these businesses not just to succeed but to thrive,” says R&CA CEO Juliana Payne.

“The massive jobs growth forecast for the café, restaurant and catering sector over the next five years simply cannot be achieved without government policies at all levels that encourage and support a strong business operating environment.

“The chronic skills shortages across key hospitality occupations such as chef, cook and café and restaurant manager continue to threaten the viability of café and restaurant businesses across the nation and ensuring a healthy pipeline of locally-trained apprentices and trainees is critical for their ongoing success.”

Payne also commended the government’s focus on tackling the black economy, welcoming measures such as reducing the costs of accepting debit card payments and incentivising businesses to adopt non-cash forms of payments recommended as part of the Black Economy Taskforce’s Final Report.

Image credit: UPSC 361

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