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Champion's end of financial year checklist 30 June
The  Abbott Government handed down its second Budget last night.
 
Below is a summary of various aspects of the Budget that are likely to impact you:
INDIVIDUAL TAXATION

Personal Tax Rates (residents)

No changes were announced to the currently legislated personal tax rates, which are summarised below for the 2015-16 income year:
 
Taxable income Tax on this income
0 - $19,400 Nil
$19,401 - $37,000 19c for each $1 over $19,400
$37,001 - $80,000 $3,344 plus 33c for each $1 over $37,000
$80,001 - $180,000 $17,534 plus 37c for each $1 over $80,000
$180,001 and over $54,534 plus 47c for each $1 over $180,000
The above rates do not include the Medicare levy of 2%.

It should be noted that the top marginal rate of tax will continue to be 49% when including the Medicare levy and the 2% Budget deficit levy.

Work Related Car Expenses
The Government has simplified the way individuals can claim a tax deduction for work-related car expenses by introducing a flat deduction rate of 66c per business kilometre travelled. This rate will apply to all motor vehicle types, irrespective of the car’s engine size and will take effect from 1 July 2015.
 
Drivers who believe that their deductible car expenses are greater than the 66 cents average, or who drive more than 5,000 business kilometres per year, will still be able to claim a tax deduction for the full portion of their work-related car expenses by keeping a logbook.

Just contact Champion's if you have any questions... 
SMALL BUSINESS TAX PACKAGE
The Abbott Government announced a small business package designed to stimulate the sector through tax cuts and incentives for owners to invest in their businesses.

For the purpose of the new concessions, a small business is defined as an entity (individual, trust or company) which operates a business with an annual turnover of less than $2,000,000 (when aggregated with the turnovers of its associated entities).
 
 
Tax Cuts
From 1 July 2015, the company tax rate for small businesses will reduce from 30% to 28.5%. The maximum franking credit rate for a dividend declared by a company will however remain unchanged at 30%.

Tax concessions will also extend to individuals who derive business income through unincorporated structures (sole traders, partnerships, trusts), as they will receive a 5% discount on the amount of tax payable (capped at $1,000 per year).

 
Accelerated Depreciation - immediate asset write-off up to $20,000
Small businesses will be able to claim an immediate tax deduction for assets purchased for less than $20,000 from 12 May 2015.  This concession will continue until 30 June 2017.
 
It should be noted that the $20,000 threshold applies on a per asset basis.
 
The immediate write-off will be available for the majority of capital asset types, including cars, machinery and equipment.

 
Immediate Deduction for Professional Costs in Setting up a Business 
An immediate deduction will be available for the professional expenses required to start up a new business, such as accounting and legal fees.

These costs were previously deductible over a 5 year period.
 

 CGT Relief for Changes to Business Structure
From 1 July 2016, small businesses will be able to change their legal structure without attracting a Capital Gains Tax liability.

Just contact Champion's if you have any questions... 
FAMILY AND SOCIAL SECURITY
A number of family and social security measures were announced in the Budget, with the major measures briefly listed below:
  • From 1 January 2017, the Age Pension assets test thresholds will increase and the phase out rate at which pensions are reduced will also increase.
  • From 1 July 2017, a childcare subsidy cap of $10,000 per child per year will be introduced for families earning $185,000 or more.  Families with incomes less than $185,000 will not be capped on their childcare subsidy.
  • From 1 July 2016, those temporarily in Australia on working holiday visas will be treated as non-residents for tax purposes, making them ineligible for the tax-free threshold, low income tax offset and lower tax rates.
  • From 1 July 2016, employees who receive paid parental leave from their employer will be unable to claim parental leave support from the Government (unless the amount received is less than the $11,500 available).
Please feel free to give us a call should you like any further explanation or want specifics on how the budget may affect you.
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Email Champions at: yourteam@champions.com.au
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