2014/15 Key Tax Changes

o   Small business $20,000 tax break – From May 2015 to July 2017 small business turnover less than $2 million can claim immediate tax deduction of asset purchases of up to $20,000. Only assets valued at $20,000 or less qualify. Assets with purchase prices of more than $20,000 will need to be depreciated normal way.

o   No FBT on all portable devices – From April 1, 2016 FBT is abolished on all portable devices used by small businesses. They include mobile phones, laptops and tablets.

o   Tax cut on small companies with annual turnover less than $2 million – From July 1 this year, small companies with less than $2 million turnover will have their tax lowered from 30% to 28.5%.

o   5% tax discount for sole traders – Maximum capped at $1,000 for sole traders.

o   CGY Relief for small business upgrading business structure – from 1 July 2016 over the next 4 years small businesses can change entity structure without getting hit with capital gains tax.

o   Net medical expenses tax offset phased out To be eligible to claim, the tax payers must have received an amount of the tax offset in both their 2013 and 2014 notices of assessment.

o   Mature age worker tax offset for workers over the age of 55 years at 30 June 2015 – This has been abolished and cannot claimed in 2015 tax return.

o   Dependent spouse tax offset to be abolished – In the 2014-15 federal Budget, the government announced that it will abolish the dependent spouse tax offset.

o   Notice of assessment and tax receipt delivery for myGov account holders –No delivery in paper form. ATO will send notice of assessment, tax receipt and other mail direct to myGov inbox.

o   Changes to work related car expenses - From 1 July 2015 work-related car expenses to be simplified. Out of 4 methods 2 methods (12% of original value method and one-third of actual expenses method) will be discontinued.  The cents per km method is amended to replace the current rates based on engine size with only one flat rate of 66cents per km. Logbook method remains same.

o   Changes to Higher Education Loan Programme for Australians residing overseas to repay their HELP debts  – From 1 July 2016 the Government will introduce arrangements to ensure a fairer HELP by requiring Australians residing overseas to repay their HELP debts. Only those graduates living overseas and earning income above the minimum HELP repayment threshold (AUD $53,345 in 2014/15) will be required to make repayments.

o   Immediate deduction for professional services in small business start-ups  – From 1 July 2016 small businesses to immediately deduct a range of professional expenses associated with starting a new business, such as legal and accounting service establishing a company, trust or partnership.

o   The Age Pension age will increase to 67.5 from 1 July 2025. It will then continue to rise by six months every two years, until the pension age reaches 70 by 1 July 2035 - People born before 1 July 1958 will not be affected by this change. Currently, the Age Pension age is due to increase from 65 starting on 1 July 2017, and gradually reach 67 by 1 July 2023.

Age Pension eligibility age by birth date

People born between

Eligible for Age Pension at age

1 July 1952 and 31 December 1953

65.5

1 January 1954 and 30 June 1955

66

1 July 1955 and 31 December 1956

66.5

1 January 1957 and 30 June 1958

67

1 July 1958 and 31 December 1959

67.5

1 January 1960 and 30 June 1961

68

1 July 1961 and 31 December 1962

68.5

1 January 1963 and 30 June 1964

69

1 July 1964 and 31 December 1965

69.5

1 January 1966 and later

70

 

o   $20,000 tax break - Make sure that your business don’t over commit. Your company has to spend $1 to get 30 cents back (or 28.5 cents after 1 July 2015). You have to make sure those capital purchases fits your overall business plan.

o   Working holiday tax change  – From 1 July 2016, the tax residency rules will change to treat most people who are in Australia temporarily for a working holiday as non-residents for tax purposes, regardless of how long they are here.  This means that those on working holidays lose access to the tax-free threshold, low income tax offset and lower tax rates.  Instead, they will pay 32.5% tax on every dollar they earn.



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JH Business Services & Taxation
Accounting | Business Advisory | Tax Services
Specialist in small to medium business 
& personal tax services


Norwest Office


 Suite 205
29-31 Lexington Drive
Bella Vista
NSW 2153

 

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