During the 2019-2020 Federal Budget the Government announced changes to Individual Income Tax Rates. These proposed changes include increasing the low to middle income tax offset from $530 to $1,080 per year as well as expanding the income tax thresholds as outlined in the table below.
These changes are subject to legislation and will be priority once parliament resumes, however, it is unlikely that they will be in place before their intended effective date of 1 July 2019.
The ATO have advised that they must administer the laws as they stand and accordingly, income tax returns lodged by taxpayers prior to the rate changes becoming law will be assessed in line with the current rates.
As such, if you are looking to lodge your income tax return early in the new financial year, you need to be aware that your assessment will be subject to the tax rates that are law as at the time of lodgement.
The good news is, the ATO have stated that they will look to automatically amend assessments once the tax rate changes have been passed as law without taxpayers having to seek to lodge amended assessments.
Businesses that employ staff will also need to be aware that there is likely to be a change to the tax tables utilized to calculate PAYG withholding which will take place part way through the new financial year, subject to the timing of the rates becoming law.
| Rates from 2017/18 to 2023/24 | Thresholds in 2017/18 | New Thresholds from 2018/19 to 2021/22 |
| Nil | Up to $18,200 | Up to $18,200 |
| 19% | $18,201 – $37,000 | $18,201 – $37,000 |
| 32.5% | $37,001 – $87,000 | $37,001 – $90,000 |
| 37% | 87,001 – $180,000 | $90,001 – $180,000 |
| 45% | Above $180,000 | Above $180,000 |
| LMITO | – | Up to $1,080 |
| LITO | Up to $445 | Up to $445 |
Please contact your Davidsons team member or email us at info@davidsons.com.au for more information.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article