- Temporary Budget Repair Levy. Adds 2% to the tax rate for every dollar of a taxpayer’s annual taxable income over $180,000
- Increase in the Medicare Levy from 1.5% to 2%
- Superannuation Guarantee charge increases from 9.25% to 9.5%.
- Aged care reforms introduce new assets tests for resident’s accommodation and care fees
- Changes to the way the Private Health Insurance (PHI) rebate is calculated requires extra information from individuals for their 2013/14 tax returns, which should be included on their PHI annual statement. There will be two different rebate periods – one from 1 July 2013 to 31 March 2014 and the other from 1 April to 30 June 2014.
- New ATO tax tables The ATO is releasing its new 2014/2015 tax rates, updated to reflect the increase inMedicare levy from 1.5 to 2% and the Temporary Budget Repair Levy for employees earning greater than $3,461 per week (i.e. $180,000 per year).
- No TFN or ABN. If the employee has not provided a TFN or a supplier business has not provided their ABN, the employer should withhold 49% of any payment made.
- Increase in the Superannuation Guarantee rate. The SG rate will increase from 9.25% to 9.5% from 1 July 2014. The government has announced that it would slow the previously announced increases to 12%, (leaving the 9.5% SG rate in place until 30 June 2018) however no legislation regarding this has been introduced.
- SuperStream. Employers can opt-in to use SuperStream from 1 July 2014. Large and medium employers must complete their implementation by no later than 30 June 2015. Smaller employers (19 or fewer employees) are not required to start using SuperStream until 1 July 2015, and must complete their implementation by no later than 30 June 2016.
- Living away from home allowance (LAFHA) transitional period ended on 30 June 2014. Now, the main condition to be satisfied is that the employee must have a normal place of residence in Australia that is maintained for their “personal use and enjoyment” (i.e. still available to them, not rented out) while they are living and working in another location. In most cases, LAFHAs will also be time limited to 12 months. Employees who qualified for the transitional rules will not be entitled to another 12 month period from 1 July 2014 unless there is a change in the job location. However, if the employee is working on a fly-in- fly-out or drive-in drive-out basis the LAFHA concessions are not subject to the 12 month limit.
- Paper activity statements. From 1 July, once an activity statement is lodged electronically, the ATO will no longer issue paper activity statements.
- Company loss carry-back repeal. The government has announced that it intends to repeal the carry back tax offset for the 2013/14 and later tax years. Legislation covering this has been reintroduced, but this is not yet law.
- Simplified depreciation rules. The government also announced that it would repeal the provision allowing small businesses an accelerated initial deduction for motor vehicles. Legislation covering this has been reintroduced, but this is not yet law.
Self-Managed Super Funds
- New SMSF trustee penalties. From 1 July 2014 the ATO has greater powers to enforce the superannuation rules by levying financial penalties directly on trustees.
- Concessional contribution cap changes. From 1 July 2014, the concessional (deductible) contribution cap for taxpayers up to the age of 50 is $30,000. And for those 50 and above, the cap is $35,000.
- Non-concessional cap changes. The non-concessional contributions cap from 1 July 2014 is $180,000 or $540,000 over 3 years (up from $150,000 per year).
- Insurance inside an SMSF. From 1 July 2014, new insurance policies within a SMSF must be consistent with the death, terminal illness, and permanent and temporary incapacity conditions of release in the Superannuation Industry (Supervision) Act.