Change in government and tax policy changes affecting small businesses.

With a change in government comes change in policies that affects each one of us directly or indirectly. 

 

Below are some of the Coalition's potential tax policy changes that would affect small businesses:

• Removal of the carbon tax. This is likely to ease the pressure of rising costs of businesses
• Cut of 1.5% in the company tax rate to 28.5% from 1 July 2015 - as any tax paid by a company is eventually claimed back as franking credits when the profit is distributed to shareholders as dividends this would just be a timing difference and not affect small businesses in the long run.
• 1.5% levy  on companies with taxable income above $5 Million to fund to its Paid Parental Leave Scheme.
• No increase in GST.
• Removal of Labor’s policy to abolish the statutory formula for calculation of Fringe Benefits Tax  on motor vehicles. This would take things back to way they were and help businesses keep the paperwork down.
• Changes to the $6,500 instant asset write-off  and the accelerated depreciation for motor vehicles. Over the long term it does not affect small businesses as this just slows down the depreciation/write off, the claim would still be the same over the life of the asset.
• Discontinuing the tax-loss carry-back measure.
• Keeping the current 9.25% rate for Superannuation Guarantee until 1 July 2016 when it will increase to 9.5%
• The paymaster requirement for parental leave is due to be removed

By SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 

 

www.taxfirst.com.au

 

 

 

 

 

 

 

 

 

 

 

 

 

4 things businesses can learn from Labor's election defeat

Wise are those who learn from their mistakes but wiser are those who learn from other people's mistakes so they don't have to pay the price for making those mistakes.

 

Here are four things that businesses should learn from Australian Labor Party's defeat in Australian Federal Election yesterday:

1. If you want to succeed; you need to keep your promises. Whether the promises are about quality of product, timeliness of service or anything else, you just can't not deliver and get away with it. The clients/customers would leave you for others who would keep their promises.
2. When you are trying to sell; focus on why people should buy from you and not why they shouldn't buy from someone else. There is no point in trying to shift the focus from your positives to someone else's negatives.
3. The leadership should have one clear direction and you cant keep changing the leadership or the direction of the business every few months. Leadership and direction are about the long term not the short term.
4. The team needs to have the same view as the leader. If the owner wants to take the business in one direction but has people in the staff that don't share the same view then the business is doomed to fail in the long run or have a team that is just not happy.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST - an accounting and business advisory firm.

 

www.taxfirst.com.au

 

 

 

 

 

 

 

 

 

 

Budget 2013-14 snap shot

On 14 May 2013, the Treasurer handed down the 2013-14 Federal Budget. Below are some of the measures of immediate relevance to everyday Australians.

PERSONAL

2015 tax -free threshold increase “deferred” 

The already legislated increase in the tax-free threshold to $19,400 from 1 July 2015 will not proceed and will instead be “deferred.” The already legislated increase in the second marginal tax rate from 32.5% to 33% from 1 July 2015 will still go ahead. 

FTB Part A change to age of eligibility 

The Government announced it will change eligibility for FTB Part A for children aged 16 years and over. FTB Part A  will only be paid until the end of the calendar year in which a child completes school. This change will start from 1 January 2014. 

HEALTH  

Medicare levy increase to 2% confirmed to fund Disability Care 

The Medicare levy will be increased by 0.50% to 2% with effect from 1 July 2014, to help fund the Government's proposed National Disability Insurance Scheme (NDIS), now renamed DisabilityCare Australia. 

Phase-out of medical expense tax offset 

The Government is to phase out the net medical expenses tax offset, with transitional arrangements for those currently claiming the offset. 

Baby Bonus to be abolished and replaced 

The Government announced that it would replace the Baby Bonus from 1 March 2014. Instead, it will increase Family Tax Benefit Part A (FTB Part A) payments by $2,000, to be paid in the year following the birth or adoption of a first child or each child in multiple births, and $1,000 for second or subsequent children. 

EDUCATION 

Confirmation that self-education expenses to be capped 

The Government will introduce a $2,000 cap on tax deduction claims for work-related self-education expenses per person from 1 July 2014. 

HELP discounts to be abolished 

The Government will remove the discounts applying to up-front and voluntary payments made under the Higher Education Loan Program (HELP) from 1 January 2014. 

BUSINESS  

Increased funding for trusts taskforce

The Government will provide $67.9m over 4 years to the Tax Office to undertake compliance activity in relation to trust structures. The taskforce will target the exploitation of trusts to conceal income, mischaracterise transactions, artificially reduce trust income amounts and underpay tax. 

BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 www.taxfirst.com.au

 

 

How much super can you contribute before 30 June 2013?

Whether you are employed or self employed knowing the maximum amount you can contribute to your superannuation funds is important and staying within the caps is vital as exceeding the caps may result in you paying as much as 93% of your superannuation contributions in tax.

The superannuation contribution caps that apply to you for the 2012/13 financial year are as follows:

• Concessional (before-tax) contributions - $25,000. Concessional contributions include compulsory employer contributions, salary sacrifice payments, contributions that are allowed as an income tax deduction, etc.
• Non-concessional (after-tax) contributions - $150,000. If you are under the age of 65, you can bring forward up to the next two years' non-concessional contributions. This means you can contribute up to $450,000 as non-concessional contribution over three years or you are allowed to contribute up to $450,000 non-concessional contributions in one financial year but then you would not be allowed to make any further non-concessional contributions in the next two financial years.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at TAX FIRST (NSW) & TAX FIRST (SA) - accounting and business advisory firms located in Sydney and Adelaide.

 

 www.taxfirst.com.au