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We Have a New Government – What does it mean for you and your business?

As a result of the recent Federal Election, the Coalition is now in power. What are their main tax proposals and what impact might they have on you and your business?  Following is a summary of their foremost proposals.

Personal Tax

•  abolish the Schoolkids Bonus
• introduce a paid parental leave scheme from 1 July 2015 to provide mothers with 26 weeks of paid parental leave at their actual wage (capped at $150000 per annum)
• restore the full private health insurance rebate

Corporate Tax

• reduce the company tax rate from 1 July 2015 to 28.5%
• apply a levy of 1.5% to larger companies to fund the paid parental leave scheme
• discontinue the new loss carry-back measures that apply from the 2013 income year and permit companies to carry back their losses to previous years

Small Business Tax Changes

• remove the small business immediate asset write-off (currently $6500)
• remove the existing upfront deduction for the first $5000 of the cost of a motor vehicle
• ease the burden on small businesses by allowing them to pay compulsory superannuation contributions on behalf of their employees to the Australian Taxation Office (ATO) at the same time they make payment of PAYG(W); the ATO will then distribute the amounts to the respective individual accounts

Other Proposed Changes

• abolish the Carbon tax but retain most of the household assistance measures
• abolish the Mining tax
• discontinue the low income superannuation co contribution
• delay the increase in the superannuation guarantee to 12% (currently 9.25%) by two years – to 2021
• not to proceed with Labour’s recently announced changes in relation to Fringe Benefits Tax (FBT) on vehicles which involved removing the statutory formula method for determining the value of those benefits

The above provides an overview of the key changes proposed to be implemented by the Coalition in its first term. These are only proposals at this time, and we will update you further as legislation is introduced to parliament.

Please keep these proposals in mind when making important decisions regarding your financial/economic future. The team at McKinley Plowman are always available to discuss how particular changes may impact you and/or your business. Please do not hesitate to contact us.

written by:

McKinley Plowman