Proposed tax changes for 2014

December 10, 2013

The Government plans to abolish a number of tax measures that could have a mixed impact on individuals and businesses.

The Government has recently moved to repeal both the Carbon and Mining Tax. These changes are intended to reduce the cost of living for Australians, help Australia become more competitive globally, reduce red tape for businesses, and reduce Government expenditure associated with administering these taxes.

It is important to be aware of these potential changes as decisions pre and post 1 January 2014 could have serious implications and end up costing both businesses and individuals thousands of dollars.

Below are some of the potential changes, however, take note that these changes are still yet to become law:

Instant asset write-off threshold

Small business (generally those with a turnover of less than $2 million) can currently claim an immediate deduction for depreciating assets costing less than $6,500. From 1 January 2014, this threshold will drop to $1000.

$5000 deduction for motor vehicles

From 1 January 2014, the $5000 immediate deduction for motor vehicles purchased by small businesses will be removed.

If businesses are considering purchasing a motor vehicle they have until 31 December 2013 to be able to claim the deduction.

Loss carry back measures

The loss carry back measures allows companies to offset tax they have paid in the previous years against current year losses.

The repeal of this measure will mean that companies will only be able to use the loss carry back measures for the 2013 income year.

Superannuation guarantee slowed

The proposed measures will slow down the increase of the superannuation guarantee (SG).

The SG was supposed to reach 12 per cent in July 2019; however these new measures will see it happen in June 2021.

These changes have not been passed through Parliament. However, business owners in particular, should bear in mind that these measures will result in some gains and some losses. Some of the changes will be very time specific and many require expenditure in order to take advantage of the changes.


Contact our team today if you would like to discuss this matter further or require any more information.

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