Perhaps the instant write-off for assets under $6,500 is the biggest assistance businesses will receive for the carbon tax.
From July this year, any SME with under $2 million in turnover will be able to write off any asset worth less than $6,500 immediately. Right now, the threshold is just $1,500.
The government will start testing the private health insurance rebate and the Medicare levy surcharge against income, in three different thresholds. High income earners will receive less of the private health insurance rebate, and the surcharge may increase.
The thresholds are a bit complex, but here’s the table straight from the ATO.
From July 1, businesses will be able to register for and claim the new research and development tax incentive. The incentive has two key components.
Firstly, a 45% refundable tax offset for research and development entities with turnover less than $20 million per year, and secondly, a 40% non-refundable tax offset for any other companies with turnover above that amount. Unused offset amounts may be carried forward in some circumstances.
If a business has a standard income year starting from July 2011, you can start to register and claim the incentive from next month.
But to do so, you need to first establish that you’re an eligible entity, that you meet the requirements of the R&D incentive and that you’ve registered your R&D activities with AusIndustry.
You’ll need to justify your R&D activity under the new incentive, and you’ll need to identify which activities are “core”, or “supporting” activities. You can check out the definition of both of those here, but essentially, core activity is an activity whose outcome cannot be known or determined in advance on the basis of current knowledge.
The business records you keep must be sufficient to verify the amount of money you spend on R&D, and you’ll need to satisfy a few tests as well.
In short, there’s a lot to get in order. To get all the details about how you can access the R&D incentive, you should head over to the AusIndustry site here, which will give you all the details.
There will be a few changes made to employment termination payments next month. From July 1, the offset is limited so it only applies where it takes up the person’s total annual taxable income to no more than $180,000.
Any amount above this will be taxed at marginal rates. Any existing arrangements will remain in place for genuine redundancies, or for compensation due to death or an employment-related dispute.
The movement charges will change next month. The passenger movement charge will increase to $55 – although it won’t be indexed –and there’ll be an increase in visa label charges from $60 to $70.
Last year, the government announced the entrepreneurs’ tax offset would be scrapped in order to help fund the $5,000 deduction for any vehicle purchase – that will take effect from next month.
The offset provided businesses an offset equal to 25% of the income tax payable on business income. While the move is a disappointing one for small business, it was only available for entrepreneurs earning less than $75,000 a year.
On the upside, businesses will now be able to access an immediate $5,000 deduction for all vehicle purchases from next month.
Andrew Sadauskas is a former journalist at SmartCompany and a former editor of TechCompany.
