Important Tax Changes Pending
As a result of the Treasurer introducing a Bill to Parliament on 13 November 2013 to repeal certain legislation, there are important tax related amendments which may affect your business. Following is a brief summary of the proposals:
- * Repeal company loss-carry back such that companies can only carry losses forward effective 1 July 2013;
- * Revise the capital allowances for small business entities with turnover of less than $2 million effective 1 January 2014. Proposed changes mean:
- - you will be able to claim an outright deduction for the value of a depreciating asset that costs less than $1,000 (rather than the current $6,500) in the income year the asset is first used or installed ready for use;
- - you will be able to allocate depreciating assets that cost less than $1,000 (rather than the current $6,500) or more to their general small business pool and claim a deduction for the depreciation of the assets in the pool;
- * Delay the superannuation guarantee (SG) charge percentage increase by 2 years to 9.5% for the year commencing 1 July 2016, and then gradually increase by half a percentage point each year until it reaches 12% for the year starting on or after 1 July 2021.
The proposals will mean that small businesses will no longer be able to claim the first $5,000 of the cost of a car as an outright tax deduction. So if you were thinking of buying a new car for your business and your turnover is less than $2 million, then act now before it is too late.
Whilst the above are not law it is important that you are aware of the potential changes. For more information and how this applies to you contact your client manager at Sullivan Dewing.