As part of the Federal Government’s abolition of the mining tax, there are also some changes which will affect businesses. These are;
Instant Asset Write off and simplified depreciation
From 1 January 2014, Small Businesses will only be able to claim an immediate deduction for depreciating assets costing less than $1,000. Any claims utilising the more generous write off amount in 2014 tax returns for assets purchased or installed ready for use from 1 January 2014 will need to be amended. Depreciating assets costing $1,000 or more from 1 January 2014 will only be depreciated at 15% in the income year in which the assets are first used or installed ready for use. The assets will then be depreciated at 30% in subsequent income years.
Accelerated deduction for motor vehicles
The $5,000 immediate deduction for motor vehicles acquired by small business entities has been removed from 1 January 2014. SBEs had until 31 December 2013 to qualify for the $5,000 immediate deduction by acquiring and using a motor vehicle over the value of $6,500 by this date.
For taxpayers that have already lodged their tax return and claimed the immediate deduction for a motor vehicle purchased after 1 January 2014, the tax return will need to be amended. No penalties will apply if the amendment is made in a “reasonable time”.
Changes to Superannuation Guarantee
The current superannuation guarantee rate of 9.5% will now be frozen until at least 2020.
If you have any queries please do not hesitate to contact our office on 07 3394 2311.