Budget Highlights – Not legislation YET!

• Company tax rate cut to 28.5% from 01/07/2015 for small business with a turnover of less than $2 million.
• Sole-trader business income from un-incorporated business with a turnover of less than $2 million will be eligible for a discount of 5% on the income tax payable. This will be capped at $1,000 per individual per financial year and will be provided by means of a tax offset after completing the tax return.

If you would like to change your structure you can now do so without incurring a capital gains tax consequence. From 1 July 2016.  We have had CGT rollover if you were to change to a company but this proposal means other changes as well.

Start-up expenses deductions will be immediately deductible rather than having to deduct over a 5 year period. Currently proposed for the 2016 year only.

There is now a requirement for offshore service providers to charge GST but not in business to business transactions from 1 July 2017.

Cars to a flat rate of 66c per km for up to 5,000kms or log book method (12 weeks) as from 1 July 2015.  A log book can be started at anytime BUT for the first year of use must be WITHIN the tax year, i.e. started after 1 July 2015.  The % established can be used for up to 5 years.

Paid parental leave proposed changes from 01/07/2016 – employees earning minimum wage will still be eligible for $11,500 for 18 weeks of leave, however from the date of implementation only employees whose employer does not provide parental leave entitlements will be eligible for PPL (either full amount or partial “top-up” amount).

Fringe Benefits Tax

FBT rate increase from 47% to 49% from 01/04/2015 to 31/03/2017.

ATO statutory interest rates for FBT loans to 31/03/2016 decreased to 5.65%. FBT exemptions will be brought in for business with less than $2 million turnover for all work related electronic devices from 01/04/2016.

Assets and Depreciation

Asset write-off up to $20,000.  Yes, the asset laws have changed yet again. From 12/05/2015 a business can claim an immediate deduction for each asset at a cost of up to $20,000. This will apply to assets acquired and installed for use between 7.30pm on 12/05/15 and 30/06/17.  From 01/07/17 the depreciation threshold and the value of the small business assets pool will revert to the existing provisions. If the Asset pool balance drops below $20,000 at the end of 30 June 2015, 2016 or 2017 it can be written off.

Superannuation Update

Superannuation rate is 9.5% from 01/07/2014. This rate will remain in place until 30/06/2021.