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Top 5 Financial Topics for July That You Might Have Missed

Every month, there are literally dozens upon dozens of articles in the public domain dealing with financial advice for individuals, SMEs, and start-ups. It could be difficult to keep abreast of it all. At The Pen Accounting, we not only love finance and helping creative and entrepreneurial businesses and individuals succeed, we also want to share with you some of the most interesting and relevant material that we find. That’s why we want to start giving a monthly synopsis of the financial articles out there that could impact or help your business or individual well being.

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With that, we would like to give the first of our monthly posts highlighting the top five articles we have seen related to individual and business finance.

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1.  The Morrison ‘Super Saver’ Scheme for First Home Buyers

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In May’s Federal budget announcement, the government proposed a plan whereby first-time homebuyers could use a superannuation fund to save for a deposit on a home. Under this ‘super saver’ scheme, a first-time buyer can contribute up to $15,000 a year towards their first home deposit.

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Unfortunately, it would appear that there is a flaw in the scheme. The ATO has advised the public that the government has not devised how or when the money could be released from these superannuation accounts. Currently, there is no legislation in place to address these issues, and that is the reason the ATO is recommending caution to any individual looking to use this scheme for first home purchases. In essence, it is a case of ‘watch this space’ to see how this scheme will be completely worked out before assessing whether this works for you.

 

Speaking of superannuation, if you make non-concessional (after-tax) contributions to your super, the previous cap was $180,000. As of 1 July, the cap has now dropped to $100,000 for contributions.

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2.  Accelerated depreciation for small business gets extended to June 30, 2018

 

The purchase of eligible assets costing less than $20,000 and first used or installed prior to 30 June 2018 can immediately be deducted. This scheme was scheduled to be phased out come July 1, however the scheme was extended for an extra year. In addition to the deduction, the definition of ‘small business’ has changed so that business with an aggregated annual turnover of less than $10 million are eligible for the scheme (previously this was only for businesses with a less than $2 million turnover).

 

3.  The ‘Netflix Tax’ Comes into Effect

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Overseas digital providers, like Netflix, were not required to pay GST on the service they supply. Well, as of 1 July, that loophole has now disappeared with the implementation of the ‘Netflix Tax’. The obvious repercussion is that the price for Netflix subscriptions will increase, however Netflix has also increased their pricing structure so the increase is anywhere from 11 to 18% depending on your tier.

 

But the tax effects more than just those who subscribe to Netflix. The tax targets all digital download products from locations based overseas. Products bought on iTunes have already been charging GST (as have several cloud-based programs like Adobe), but others haven’t been (such as Google Play or Steam).

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This tax also applies to work performed overseas, such as consulting or freelancer work. Overseas freelance-finder sites, such as Upwork, are now required to charge GST for their services as well. Thus, while the bulk of us will feel it for our streaming downloads of House of Cards, small businesses and sole traders working as, or with, freelancers overseas could also feel the pinch.

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4.  SME Finance Options After Two Years

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Startup businesses have it tough when it comes to securing financial capital. With no real cash flow or sales to speak of at the start, most financial vehicles are of the unsecured, high interest loan variety. However, the flood gates open once a business hits the two-year anniversary mark, and refinancing to remove these interest loans are available in numerous forms. This article, sponsored by one of the numerous finance groups available to SMEs, highlights the types of vehicles out there on offer from a variety of places.

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5.  Industry and Regulatory Changes Can Benefit SMEs and Startups

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Small businesses are set to benefit from a wealth of changes that have taken place last month. The RBA has changed the regulations regarding card transactions, freeing up the process to non-banking entities now. This could make card transaction fees conducted by small businesses dramatically smaller.

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Additionally, the newly announced New Payments Platform is set to be launched later this year. With the NPP, payment transactions which typically took up to three business days to clear will now be approved and cleared in real-time.

Photo by Glenn Carstens-Peters on Unsplash