YOUR SNAP SHOT!
Although spending cuts have attracted much publicity, there are some important tax measures in the Budget
which might impact your situation – have a read of our Top Eight tax and superannuation issues and feel free to
give us a call if you require any further clarification on how these might affect your specific situation.
1.
Company tax rate cut confirmed for incorporated small businesses with an annual turnover under
$2 million, effective 1 July 2015
For clients utilising a company structure, the company tax rate will be dropping from the current 30% to
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28.5% from 1 July 2015. While this leaves us with the old rate for the current 2015 financial year, it also
gives us something to look forward to for 2016!
When contemplating your tax planning for 2015, it is important that we keep this tax rate drop in mind, as
where income can be deferred until early July, a lower tax rate will be payable. This lends itself to some tax
reduction planning possibilities that we need to consider.
Even better, the Government has confirmed that for franked dividends paid, the maximum benchmark
franking percentage will be unchanged, i.e. it is still calculated by reference to the 30% rate. This means that
for those of you who having been ‘’banking credits for future use’’ when paying your company tax, won’t be
disadvantaged.
2.
Small business tax discount for unincorporated business owners with an annual turnover under
$2 million
For those of you who don’t have a company, there is no need to feel left out. Unincorporated businesses,
such as sole traders, partnership or those of you who operate via a trust structure, the Government will be
providing a 5% discount on tax payable on your business income. It should be noted that the maximum
‘’discount’’ available is $1,000 per individual per income year, but this is still a significant way to take the top
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of your tax bill and a welcome initiative. This also kicks in from 1 July 2015.
3.
Small business asset write-offs and asset pool reductions
Small business is the big winner in this year’s Budget.
From Budget night, small businesses with an aggregate turnover of less than $2 million can immediately
deduct most assets acquired and installed which cost less than $20,000. The cut-off date is 30 June 2017.
There are a few things to keep in mind when considering utilising this concession:
This concession is available on a per asset basis, it is not a per year cap. If you have Asset A worth
$18,000 and Asset B worth $15,000 and can’t choose which one to do now and which one later – feel
free to get both in one year (as long as your cash-flow allows for it!)

The concession limit of $20,000 relates to the GST exclusive price of your asset if you are a GST
registered entity.
NB: for potential car purchases – be aware that the limit applies to the on-road cost of your vehicle
(including stamp-duty and registration fees etc.) not just on the ticketed purchase price.
Where we have utilised General Asset Pooling for your depreciation requirements in the past, you will also
be eligible for an immediate deduction of the pool balance once it becomes less than $20,000 (Including
existing pools).
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YOUR SNAP SHOT!
4.
All primary production clients
The Government has provided greater immediate and shorter-term depreciation options for certain primary
production assets such as fences and water tanks. This is great news and may come in very handy for
those of you working the land.
5.
Changes to motor vehicle claim options (for sole traders, partnerships and employees)
Previously, we have always had four methods of claiming your motor vehicle costs:

12% of the cost of your vehicle

1/3 operating costs

Log book

Cents per kilometre
From 1st July 2015, this will be reduced to just the log book method and the cents per kilometre methods. It
should also be noted that the Government will be changing the cents per kilometre rate to $0.66 per kilometre
regardless of your type of car –this will be down from the current $0.77 per kilometre for the majority of cars.
6.
Childcare changes
It’s not strictly tax-related, but child care costs are a major outlay for your working family clients. From 1 July
2017, there will no longer be a:

Child Care Rebate – Covers 50% of out of pocket child care expenses for approved care, up to a
maximum amount per child per year (not means tested)

Child Care Benefit – Means tested and usually paid direct to the provider
Instead, the Government intends to establish new childcare subsidy arrangements.
For clients with young families, put childcare on the agenda for your upcoming 2015 tax time conversation.
7.
Professional fees associated with start-ups deductible immediately from 1 July 2015
Thinking of starting something new? Often this comes with costs involved with establishing a new entity
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structure, obtaining legal advice etc. From 1 July 2015, the Government will be making these immediately
deductible to you, rather than deductible over a five year period as is currently the case.
8.
Did you hear about the changes to Superannuation? Neither did we…..
Despite a lot of pre-budget chatter and concern, the Government says there’ll be no changes in the current
term of office, but the Federal Opposition has already announced its ‘Fairer Super Plan’. This is a fantastic
result and provides some stability for those of you starting to think about your retirement more seriously
(which should be all of you!)
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