Some key points that could affect your business
- Small Business Entities (SBE) (annual turnover < $2M) can immediately deduct assets (plant and equipment, motor vehicles) acquired for use in the business costing less than $20,000, as opposed to $1,000 previously.
- Assets > $20,000 can still be pooled and depreciated at 15% in the first year then 30% the second year onwards.
- Pool can be fully written off once balance falls below $20,000; includes existing pools.
- These changes only apply from 12 May 2015 (7.30pm AEST) to 30 June 2017, after which the previous $1,000 threshold reverts.
Changes effective 1 July 2015:
- 28.5% tax rate for SBE companies (30% rate for non SBE companies remains).
- Maximum franking credit rate still 30% for all companies.
- Taxpayers with business income from an unincorporated business – e.g. individuals, partnerships, trusts (must be an SBE) eligible for small business tax discount, being 5% of income tax payable on the business income only. This discount is capped at $1,000, delivered as a tax offset.
- Car deductions to change as follows:
- Cents per km flat rate of 66 c/km only regardless of engine size and type.
- 12% of original value and 1/3 of actual expenses methods to claim no longer available.
- Individuals wishing to claim for > 5,000 kms will be required to claim under the log book method.
- Zone Tax Offsets limited to individuals actually residing in zones > 183 days, FIFO and DIDO workers being excluded from zone offsets.
- Professional expenses (legal fees, accounting fees) for setup of businesses immediately deductible as opposed to being amortised over 5 years.
Changes effective 1 July 2016:
- SBEs can change structure without attracting a CGT liability at that point (however no mention of stamp duty costs, which will apply).
- Primary producers can immediately deduct capital expenditure on fencing and water facilities such as dams and water towers; as for fodder storage assets such as silos, they can be depreciated over 3 years.
- From 1 April 2016, the fringe benefits tax exemption which applies in respect of the SBE employer providing an employee with one portable electronic device primarily for work related use only, has been expanded to include multiple portable electronic devices.
- From 1 April 2016, a separate single grossed up cap of $5,000 for salary sacrificed meal entertainment and entertainment facility leasing expenses will be introduced and apply to employees in “not for profits”; where exceeded may be counted in calculating whether an employee exceeds the existing cap of benefits generally in “not for profits”.
- From 1 April 2016, all meal entertainment benefits will be reportable.
- From 1 July 2017, GST will be extended to cross border supplies of digital products and services imported by consumers.
- Individuals with a HELP debt going overseas for more than 6 months will be required to register with the ATO from 1 January 2016, and those residing overseas will be required to repay the debt.
- From 1 July 2016, individuals will not be able to receive government assistance for Parental Leave Pay if their employer provides parental leave entitlements.
- Medicare Levy low income thresholds for 2014/2015 as follows:
- Individuals $20,896 (up from $20,542)
- Families $35,261 (up from $34,367)
- A new single Child Care Subsidy (CCS) will be introduced on 1 July 2017. Families meeting the “activity test” (workplace participation) with annual incomes up to $60,000 will be eligible for a subsidy of 85% of fees and this will taper to 50% for families with incomes of $165,000. For families with annual incomes of $180,000+ the CCS will be capped at $10,000 per child per year.
For a full list of available documents please CLICK HERE.
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