A summary of the budget changes effective from 1 July 2014 is below:
• The personal tax rates for the 2014/15 income year are
0 – $18,200
$18,201 – $37,000
$37,001 – $80,000
$80,001 – $180,000
**$180,001 and over
19c for each $1 over $18,200
$3,572 plus 32.5c for each $1 over $37,000
$17,547 plus 37c for each $1 over $80,000
$54,547 plus 47c ** for each $1 over $180,000
* The above tax table does not include medicare levy of 2% (an increase from prior years of 0.5% to fund the NDIS) or account for any low income tax offsets or other medicare levy reductions
** including the announced Temporary Budget Repair Levy of 2%.
• Superannuation Guarantee Charge increases from 9.25% to 9.5%.
• The FBT rates will be adjusted to take into account the higher marginal tax rate change to 49%, however these will not come into effect until the new FBT year commences on 1 April 2015.
• R&D offset rates will be reduced by 1.5%. The refundable R&D offset will now be 43.5% and the non refundable offset 38.5%.
• Deferral of third party reporting and data matching to 1 July 2016.
• From 1 July 2013 any excess superannuation contributions and any related earnings on the excess contributions can now withdrawn (up to 85% of the excess contributions amount and related earnings) and any excess contributions will now be taxed at your marginal rate of income tax rather than the highest rate of 31.5%. An assessment will be issued to the individual and are eligible to receive a tax offset of 15% where contributions tax has been paid on those excess contributions (no tax offset is available for excess non – concessional contributions have been made as no contribution tax is levied on these contributions).
• The loss carry back rules, small business asset write off threshold of $6,500 and first $5,000 instant asset write off for motor vehicles are still law. The original legislation to have these repealed were defeated in the Senate. Whilst taxpayers can apply these rules as of today they should be aware that the Government may amend and backdate the changes, which may require an amendment where a taxpayer has applied these rules and the legislation is subsequently amended, but for now these rules apply.
If you have any questions about the budget and how it impacts you, please contact us here.